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18 Melb. J. Int'l L. 407 (2017)
Chinese Investment in Australia: A Critical Analysis of the China-Australia Free Trade Agreement

handle is hein.journals/meljil18 and id is 429 raw text is: 








             CHINESE INVESTMENT IN AUSTRALIA:
 A  CRITICAL ANALYSIS OF THE CHINA-A USTRALIA FREE
                          TRADE AGREEMENT

                                WEIHUAN   ZHOU  *


The China-Australia Free Trade Agreement ('ChAFTA') reflects the latest development of trade
and investment rules in regional economic integration and is of significance to the future
development of the international economic legal order. Through a critical analysis of the major
ChAFTA   rules on investment protection and liberalisation, this article argues that the positive
impact of these rules on Chinese investment in Australia has been overstated. These rules, as
they currently stand, may not create sufficient incentives for or boost the confidence of Chinese
investors. Chinese investment in Australia will continue to be influenced by the investment
policies and needs of China as a capital exporter and Australia as a capital importer. However,
the recent agreement of the two governments to commence the review of these rules in 2017
shows their commitment to further developing these rules to achieve a higher level of investment
protection and liberalisation.

                                   CONTENTS

I    Introduction..................           .......................    ..... 407
II   Chinese Investment in Australia: An Overview   .................. ..... 409
III  ChAFTA  Negotiations on Investment     .................................. 414
IV   Investment Protection and Liberalisation under the ChAFTA ......... ....... 417
       A    Non-Discrimination        ..............................  ...... 417
       B    FIRB Approval           ..................................   ...... 420
       C    ISDS             .......................................... ..... 426
       D    Investment Facilitation and Movement of Temporary Workers .............. 429
V    Concluding Remarks: The Outlook for Chinese Investment in Australia ............ 432

                              I     INTRODUCTION

   This article explores the regulation of investment under the China-Australia
Free  Trade Agreement   ('ChAFTA'),I  which  entered into force on 20  December
2015.  It offers a critical analysis of the major rules on investment protection and
liberalisation that impact  on  Chinese  investment   in Australia. It takes  the
position that the ultimate goal of these rules is to induce two-way investment and
an  analysis of  the rules as  such  would  not  be  sufficient to determine  the
effectiveness and impact  of the rules in that regard. Therefore, while the article
discusses the approaches that the ChAFTA   takes to regulating and liberalising the
bilateral investment, it focuses on studying whether the ChAFTA   would  actually

    Senior Lecturer and Member of China International Business and Economic Law ('CIBEL')
    Initiative, Faculty of Law, UNSW Sydney. Email: weihuan.zhou@unsw.edu.au. The author
    is grateful to Professor Wenhua Shan for valuable comments and Ms Huiqin Jiang for
    research assistance. Any errors or oversights are my own. All websites cited are current as
    of 15 September 2017.
  1 For a comprehensive volume on the ChAFTA and its regulation of some of the most cutting
    edge issues such as trade in services, investment and digital trade, see Colin Picker, Heng
    Wang  and Weihuan Zhou (eds), The China Australia Free Trade Agreement: A 21st Century
    Model   (Hart,  2017).  A   brief overview  of   the  book   is  available at:
    <www.bloomsbury.com/au/the-china-australia-free-trade-agreement-9781509915385/>,
    archived at <https://perma.cc/6VQL-W6ZK>.


407

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