And there is legitimate expectation, both in China and among the Australian business community, that the FTA with China will ease access to Chinese investors (both SOEs and private investors) in a way that reflects the treatment of other partner investors under similar FTA arrangements in return for major concessions from China on agricultural and services trade access as well as investment treatment.
In our lead this week, Paul Hubbard and Patrick Williams point out that the first step in understanding Chinese investment is the distinction that we need to make between the giant, central SOEs dominating strategic industries from Beijing and the tens of thousands of provincially and locally owned SOEs. ‘China’s largest companies are almost all central SOEs and state-owned banks.
Australia still has the potential to remain one of China’s largest foreign investment outlets and, as global sources of foreign investment have shrunk since the global financial crisis, China is a large and promising source of new investment for Australia and other countries.
But there being no country of origin specifications, these guidelines were introduced explicitly after China opened the door to large scale SOE investment abroad and after there was a huge surge of interest by Chinese firms in investment in the Australian resources sector at the height of the minerals boom.
Read more here: Business Spectator