The China-Australia Free Trade Agreement and the Growing Acceptance of Chinese State Capital Investment

Abstract

This article maps the rising influence of state capital as an increasingly valuable source of liquidity in global capital markets and foreign direct investment. In particular, this article considers how this rising influence is changing the perceptions of investee nations towards foreign state capital investments. Using the example of the Australian-Chinese Free Trade Agreement finalised in November 2014, this article contends that although, prima facie, Australia has maintained a hardline policy stance towards Chinese inward state capital, closer examination reveals an increasing acceptability of Chinese state capital over time in Australia. Such a long-term policy recalibration has the potential to be repeated in other jurisdictions in the Asia-Pacific region.

Keywords: state capital, foreign direct investment, policy influence, free trade agreements