US and China bilateral investment treaty talks are to be resumed following China's agreement to include all sectors and stages of the investment for the first time and another country.

In this round of talks, Beijing agreed to drop blanket restrictions changing its previous stance where it had asked for certain industries to be exempt, particularly the service sector, showing an open attitude to foreign competition in more sectors.

The move to resume negotiations at Washington's annual Strategic and Economic Dialogue is a sign of positive change and "a significant breakthrough", said US Treasury Secretary Jack Lew, in light of the "disappointment" over China's failure to hand fugitive intelligence analyst Edward Snowden when he sought sanctuary and hid in Hong Kong.

The reopening of talks has been hailed as a realisation by China that the US economy is resilient and reversing economic slowdown which China now faces, said Mr Lew.

However Chinese Vice Finance Minister Zhu Guangyao said the move was due to its need for protection of its US$20 billion in direct investment and $1.2 trillion in US treasury bills.

"Business leaders from China and the United States have a strong desire to invest in the market of the other," Mr Zhu added. "They both want an open and more transparent market."

Inking an agreement between the US and China will be tough given China's previous stance in barriers to ownership which is estimated at about 90-Chinese sectors. This reticence jars with China readily seeking investment in the US. It will also take time for a bilateral investment treaty to be passed by Congress.

A true breakthrough would be China's ability to not only protect its investments abut also to improve US investors' access to Chinese market, said Rock Creek Global Advisors consultancy, set up by two veteran US advisers to Bush White House.

China's handling of the Snowden case, where he was allowed to leave Hong Kong to Moscow without facing US justice has damaged trust between the two countries, said US Deputy Secretary of State William Burns when it is essential "to manage difficult issues" particularly in regard to the "rules of the road" in cyber space over theft of intellectual property.

However, China has stood by Hong Kong SAR government's handling of the case which answers to Beijing on matters of foreign policy but has an extradition treaty with the US.

"The Hong Kong government handled the Snowden case in accordance with law, and its approach is beyond reproach," said Chinese State Councilor Yang Jiechi on the decision to not detain Snowden.

The side-stepping of China on the cyber theft of trade secrets, intellectual property and confidential business information "makes it impossible for any countries to make concessions to the United States for the time being, because we look like big cyber offenders," said Douglas Paal, of the Carnegie Endowment for International Peace

Since China generates its own intellectual property it is hoped the first official meeting of a US-China bilateral working group on cyber crime will go some way to addressing the US concerns.