Chinese investment in Australia has grown strongly in recent years. Increasing numbers of Australian businesses are also entering the Chinese market with great success.
The China-Australia Free Trade Agreement (ChAFTA) improves opportunities for investors in both countries. Moreover, China’s commitments on investment in ChAFTA protect the competitive position of Australian businesses in China into the future.
Chinese investment in Australia
The total stock of Chinese investment in Australia increased by 12.7 per cent by the end of 2015, reaching $74.9 billion. This means China currently accounts for 2.5 per cent of the stock of total foreign investment in Australia.
ChAFTA promotes further growth of Chinese investment into Australia, in particular by liberalising the screening threshold at which private Chinese investments in non-sensitive sectors are considered by the Foreign Investment Review Board (FIRB), increasing it from $252 million to $1,094 million.
Under ChAFTA, the Government will continue to screen Chinese investments at lower thresholds for agricultural land and agribusiness, and in sensitive sectors including media, telecommunications and defence-related industries.
FIRB also continues to screen all direct investments, new business proposals and acquisitions of interests in land (including agricultural land), by Chinese state-owned enterprises, regardless of transaction size. ChAFTA does not change these arrangements in any way, consistent with the Government’s practice in other FTAs.
Australian investment in China
Australia’s stock of investment in China totaled $70.2 billion at the end of 2015.
A range of China’s services commitments in the FTA allow for the delivery of services in China through the establishment of a commercial presence. These include the sectors of health, aged care, shipping, architecture and urban planning, legal and mining services, as well as financial services including banking, insurance and funds management sectors. This represents a significant improvement in the investment environment for Australian services firms. See our Factsheets on Trade in Services and Financial Services for more details.
The Investment Chapter of ChAFTA provides a basis to deepen and diversify the bilateral investment relationship. Under ChAFTA, Australia and China have committed to commence negotiations for further investment protections and increased market access in the future.
Under most-favoured nation treatment (MFN) provisions, China has committed to extend to Australia any more favourable treatment it provides to other countries under future investment arrangements. These provisions protect Australia’s competitive position in China into the future.
Fact sheet last update: 5.01.2016