It is generally believed that the bilateral trade between China and Australia are booming under ChAFTA. In 2016, more than 85% of the bilateral goods trade has benefited from tariff reductions under ChAFTA.
However, in the other hand, we believe that there is still much room for further promotion of bilateral investment between the two countries.
For instance, apart from the SH FTZ, China has approved 10 other free trade zones (i.e., the relevant free trade zones in Guangdong, Tianjin, Fujian, Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan and Shaanxi) during 2015-2016. The benefits offered to Australian investment in the SH FTZ should be further extended to the other free trade zones of China.
It also remains to be seen as to when will China issue the “negative list of service sectors for Australian investment” and whether there will be any amendments to ChAFTA following bilateral negotiation and review of ChAFTA.
The Australian business community should be aware of the aforementioned benefits under ChAFTA for Australian investment in certain sectors or regions of China. For instance, ChAFTA offers a great opportunity for Australian medical service providers to set up hospitals in 7 regions of China in the form of WFOEs. This may be of interest to Australian medical service providers wanting to enter the China market or Chinese investors wanting to acquire Australian hospitals and “return” to China to provide high end medical services.