WASHINGTON (REUTERS) - The United States (US) and China should aim to complete a planned investment treaty this year, the US-China Business Council (USCBC) said on Monday.

The world's two biggest economies agreed in July to restart stalled negotiations on an investment treaty, with Beijing dropping previous efforts to protect certain sectors of its economy from the start.

"It's very important for us to grasp this opportunity to try to move forward and see how serious they are," USCBC President John Frisbie said in unveiling the council's annual priorities statement.

Previously, Beijing had agreed to talks only if certain Chinese industries, especially in its service sector, were exempt. But it agreed to drop blanket restrictions for the current talks.

Frisbie said China had to start dismantling restrictions on foreign investment in sectors including automotive, financial services, agriculture and health to help overcome United States (US) domestic resistance to greater ties with China.

Any pact would need to be ratified by the US Senate and Frisbie said new US ambassador to China and retiring Senator Max Baucus would be well-placed to stress the need to open up to more investment.

"He could certainly talk about a bilateral investment treaty and what it's going to take to get it through the Senate," Mr Frisbie said.

"He will be very good at articulating that in a way that will help China understand the importance of having some meaningful reductions in the ownership restrictions and how that's going to be critical to that treaty moving forward."

After talks with Beijing in December, US Trade Representative Michael Froman said he could not give a timetable for concluding the talks.

The US has a massive trade deficit with China, which maintains a tight grip on state-owned businesses.