WASHINGTON (Reuters) - Bilateral investment talks between the United States and China "continue to be productive," the U.S. Trade Representative's office said on Friday after the two sides exchanged new offers.

A USTR spokeswoman said U.S. and Chinese negotiators exchanged revised "negative lists" of sectors that would stay off-limits from foreign investment as they try to reach a bilateral investment treaty.

"China will need to demonstrate the substantial liberalization of its investment market, ensure that U.S. firms can compete on a level playing field, and address other key priorities to facilitate the progress and successful conclusion of a mutually beneficial and high standard BIT," the USTR spokeswoman said in a statement.

(Reporting by David Lawder; Writing by Eric Walsh; Editing by Eric Beech)