BEIJING, July 9 -- Chinese Vice Premier Wang Yang said on Wednesday China and the United States had made substantial progress on key issues of economy and trade.

Wang, who co-heads the Chinese delegation to the annual Strategic and Economic Dialogue (S&ED), held a meeting with U.S. Secretary of Commerce Penny Pritzker and Trade Representative Michael Froman in Beijing.

The two sides carried out "frank" exchanges on the Sino-US Joint Commission on Commerce and Trade mechanism, intellectual property protection, extending the Information Technology Agreement(ITA) and trade in agricultural products.

Wang said at the meeting that the progress on trade issues was achieved through joint efforts. He hoped that the two sides would continue to communicate in a "pragmatic and flexible" manner to achieve balanced results.

China and the United States are likely to conclude the first phase of their Bilateral Investment Treaty (BIT) talks and start substantive negotiations on the negative list, Chinese Assistant Trade Minister Zhang Xiangchen said after an SE&D session on Wednesday.

"The BIT talks consist of two phases, the first is text and the other is the negative list. We are going to start the second phase," Zhang told a press briefing.

The two biggest economies in the world first initiated BIT talks in 2008, but is was not until last year's S&ED meeting that serious steps forward were made.

Negotiations over the past year have removed the main hurdles. China wants the United States to narrow national security reviews on Chinese investment, while the U.S. side would like to see China keep its "negative list" of sectors barred to U.S. investment as short as possible.

"China believes that BIT negotiations on the basis of pre-establishment national treatment (PENT) with a negative list approach are in accord with the direction of China's economic restructuring," Vice Finance Minister Zhu Guangyao said at a press briefing earlier this week.

PENT means that foreign investors and their investments will be accorded national treatment in the pre-establishment phase of their businesses.

A conclusion of the BIT talks would be historic, Zhu said, significantly helping the bilateral economic relationship and the world economy.