Australia FTA to lower market thresholds

Expected to benefit Chinese firms in agriculture sector

China's private enterprises will enjoy the same treatment as New Zealand and Japanese firms after the free trade agreement (FTA) between China and Australia comes into effect, Frances Adamson, the Australian Ambassador to China, said Tuesday in Beijing at a press conference.

The Australian government welcome China's capital by relaxing the market access thresholds for Chinese investment especially from private enterprises in the China-Australia FTA, which will help to accelerate the growth of investment from China to Australia, Adamson said.

China and Australia announced on November 17 that the two countries had completed negotiations on an FTA.

Under the FTA the threshold for Chinese private firms' investment in Australia's non-sensitive sectors that needs to be approved by the Australian government is expected to be raised from nearly A$250 million ($216 million) to about A$1 billion, signifying that most investment from Chinese private firms will be exempt from having to obtain approval.

The FTA is expected to come into effect next year according to media reports.

Adamson said the launch of the China-Australia FTA has attracted investment interest from Chinese private firms.

From December 1 to December 5, a delegation of more than 20 Chinese entrepreneurs including Zhu Xinli, chairman of China Huiyuan Juice Group, will visit Canberra, Sydney and Melbourne to seek investment opportunities.

The entrepreneurs' companies are in the agriculture, software, real estate and culture industries.

The most promising industry under the new China-Australia FTA is agriculture, which accounted for only 1 percent of the total volume of overseas investment from China to Australia in 2013, and the share may increase rapidly in the next five years but remain in single digits, Zhou Hao, an economist at Australia and New Zealand Banking Group, told the Global Times on Tuesday.

According to Zhou, the top three industries in Australia that attracted Chinese capital in 2013 were electricity, mining and energy.

Huiyuan's Zhu said at the press conference that his company has a strong intention of investing in Australia and he values the breeding and processing business, but he didn't give any investment details.

Zhu said his company used to import cattle from Australia and it would be better to establish a breeding base in Australia with the relaxation of market access thresholds.

The trend of direct investment in Australia's agriculture industry instead of the previous business model of import will be accelerated under the launch of the China-Australia FTA, Zhou said.