Australian businesses operating in the services sectors can expect an FTA with Beijing to ease regulatory restrictions and make it easier to operate in and target the huge Chinese market.
The free trade deal with Beijing is widely expected to be signed-off on next Monday, with The Australian reporting it will add at least $18bn to the Australian economy over the next decade.
Alan Oxley, Australia’s top trade envoy in the 1980s, told Dynamic Business the trend among Asian economies was to slowly open up their services sectors to boost economic growth. Mr Oxley, a principal at leading trade consultancy ITS Global, said this would present new opportunities for Australian businesses, if they were prepared to do the hard work in targeting the Chinese market.
“Most Asian economies still only denote a small share of their share to GDP to services,” he said. “In all developing countries, they do need to get their services sectors more competitive if they are to have growth.”
The service sectors are typically subject to higher restrictions. In the event of a deal, an FTA with China is likely to see an easing of regulatory restrictions across a range of fields, including the transport, logistics, construction, legal, education, health services and business services sectors.
Mr Oxley said it was not clear whether there would be major breakthroughs in the two big areas of telecommunications and finance. However, he said any deal would represent further progress for small and medium sized Australian businesses looking to target the Chinese market.
“What it means is that it draws their attention to the fact the Chinese market is open and it should encourage them to go up and have a look themselves. There are business opportunities there,” he said. “What people should do is go and visit, and they should talk to other businesses that have been successful. They’ll tell you what the problems are.”
Restrictions that are likely to be eased may include visa restrictions, work permits, property ownership rules, hiring restrictions and trading license restrictions. Trade Minister Andrew Robb says the deal will mean Australia will secure greater access to the Chinese services sector than any other country.
Mr Oxley said the opening up of services sectors in Asia would continue for the next twenty years as Asian economies sought to bolster their economic growth. He warned that cracking the Chinese market would still be a hard slog and that a clear plan was needed on the part of those business owners wishing to expand their horizons.
“Doing business in China is not easy. It’s a significant challenge for small businesses,” he said. “It will depend on how they go about it an organised way. The market is huge.”
The FTA is also thought to phase out tariffs for Australian mineral and energy exports while food producers are expected to benefit from an increase in horticultural exports.
Foreign Minister Julie Bishop has also fanned expectations that the deal is on the verge of being finalised, with final sticking points to be ironed out in time to facilitate a signing during Chinese President Xi Jinping’s imminent visit for the G20 summit.
