SEATTLE, Sept 23 (Reuters) - Seeking to warm bilateral ties and project a sunny climate for U.S. business, Chinese President Xi Jinping vowed on Wednesday to cut restrictions on foreign investment, while his chief Internet regulator appeared to lay the groundwork for a basic agreement later this week on cyber warfare.
Xi's busy stop on the West Coast is the first leg of a week-long trip to the United States and offers him a chance to highlight China's cooperation with U.S. companies before he heads to Washington, where he will contend with the full spectrum of irritants in relations, from tension in the South China Sea to human rights.
The Chinese leader started the day by publicly assuring U.S. business leaders that he is making it easier to invest in China, and he was later quizzed in a private session about intellectual property protection, common standards and clear, transparent regulations, according to the Paulson Institute, which hosted the event.
"We are working to create a new open economic system, push forward reform of foreign investment management and greatly reduce the restrictions on foreign investment," Xi told the gathering of executives in Seattle, including Apple Inc Chief Executive Tim Cook and Berkshire Hathaway's Warren Buffett.
"GM and Ford can increase their investment in China," Xi said.
A few hours after, Boeing Co announced plans for an aircraft finishing center in China, its first outside the United States.
To the east of Seattle, at Microsoft's campus in Redmond, China's top Internet regulator told U.S. tech executives that both countries must work together on cyber security issues, including crime and espionage, addressing one of their most pressing concerns.
"We are on the same boat," said Lu Wei, at the eighth annual meeting of the U.S.-China Internet Industry Forum. "The only choice we have is to cooperate."
In a closed-door session afterwards, Lu gave the impression that China and the United States were set to reach some kind of agreement on cyber warfare, banning attacks on infrastructure in peacetime, according to one person present, who asked not to be named given the privacy of the meeting.
BOEING TO BUILD PLANT IN CHINA
The world's biggest plane maker's long-expected move into low-cost China followed its news of a big order for some 300 planes from China, valued at about $38 billion at list prices.
But the finishing center plan has not been popular with labor unions and also attracted the ire of leading Republican presidential hopeful Donald Trump, who said it would take jobs away from the United States.
Xi toured the Everett, Washington, factory where Boeing its largest aircraft, and was shown a demonstration on board a 787 Dreamliner, which is popular with Chinese airlines.
The plant would showcase the new spirit of cooperation touted by Xi, but several Boeing workers protested outside the Everett plant.
"We don't have a problem with China. We have a problem that this could equate to machinists losing jobs," said Joel Hetland, 57, a structures mechanic on the 787, while waving a sign.
"They (Boeing) don't have to worry about the EPA (Environmental Protection Agency) there, they don't have to worry about human rights, they don't have to worry about the 40-hour work week."
Boeing said the China facility would not reduce employment on 737 production in Washington state.
INVESTMENT RULES
Xi's comments on foreign investment were designed to please U.S. business. China has repeatedly pledged to loosen restrictions on foreign investment as it tries to improve inefficient state-owned firms and adopt market-friendly policies to stave off slowing growth, but foreign business groups say that so far action has not kept pace with promises.
U.S. investors would like a bilateral investment treaty that would give them increased access to state-dominated industries such as telecommunications and financial services.
Xi said a key part of China's reforms would be to reduce the scope of the current "negative list" of industries in which foreigners could not invest. He added: Our positive list will be bigger, a longer list. We will continue to build an open and law-based environment."
Chinese regulators issued a negative list of prohibited and restricted industries for foreign investors in March, though business lobbies have complained that the government has been reluctant to cede too much control over sectors it deems central to national interests. (Additional reporting by Alwyn Scott, Joseph Menn and David Brunnstrom; Writing by Bill Rigby; Editing by Frances Kerry and Ken Wills)
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