Imagine running your business at peak performance, with maximum efficiency and considerable profit, and then finding an entirely new country in which to duplicate your success. Such will be the impact of the China-Australian Free Trade Act (ChAFTA) on Australia’s tourism industry. In the historic agreement, which entered into force on December 20, 2015, China agreed to provide an unprecedented opportunity to Australia’s tourism operators by allowing wholly-Australian owned tourism services to establish facilities within its borders.
Foreign or Domestic Visitors Welcome
For the first time, Australian tourism companies are now able to build new or renovate existing Chinese buildings from which to operate their businesses. The entities can be 100% Australian-owned, so profits from the new venture will be included as part of Australia’s GDP. Both lodging and services companies are invited to participate, and all Australian tourism industry entities can serve both Chinese and international patrons.
The Chinese Market is Huge
China’s economy is shifting from its former reliance on manufacturing and mining to a new reliance on consumer spending by its newly-flush middle-class. Over the past ten years, while its manufacturing boom was on-going, China wasn’t focused developing a services sector to supply its growing middle class. China’s workers 1 have been earning more money than ever before., and now find themselves with an abundance of discretionary cash and no place to spend it. ChAFTA is helping the country to remedy that lapse by bringing established Australian service companies onto its shores. Because their business practices are already proven effective, the Chinese-based operations will waste little time getting up and running, and can thereby provide the highly demanded services the moment they open their doors.
In addition to opening new tourism-related businesses, ChAFTA also allows Australian companies to contract with Chinese tourism operators, such as existing hoteliers and transport companies, as well as provide traveler cheque cashing services to their patrons.
ChAFTA Also Addresses Human Resources Challenges
Expanding proprietary services into a foreign coountry requires skilled and knowledgeable staff. CHAFTA anticipates that Australian companies will need their homeland people to operate their China-based enterprise. Accordingly, China now offers guaranteed access to jobs based in China to these classes of occupations:
- Direct employees such as executives, specialists and managers are guaranteed up to three years residency;
- Service sector suppliers who are committed to an existing contract can stay a year, or longer if the contract includes that term;
- Installation and maintenance staff are guaranteed residency for up to six months (180 days), and
- Corporate visitors (consultants, trainers, etc) can also stay up to six months.
ChAFTA’s human resources responses don’t end there, however. For the first time in any of China’s free trade acts, spouses and dependents of Australian employees or contractors are also granted entry and stay opportunities when their Australian worker will be in the country for more than 12 months.
Chinese Workers in Australia
There has been an ebb and flow of Chinese workers to Australia over the past 200+ years. Through ChAFTA, Australia’s reciprocal invitation to Chinese tourism workers also deepens the connection between the two nations. ChAFTA now welcomes Chinese professionals in tourism-specific occupations to bring their talents to Australian consumers. For as long as four years, Chinese chefs, martial arts coaches, Traditional Chinese Medicine practitioners and Mandarin language tutors can ply their trade to the Australian population. In other tourism-related industries, Chinese enterprises working with Australian businesses can also bring their executives, managers and specialists into the country for as long as four years. Chinese installers and maintenance employees are welcome for up to three months, and business visitors are also welcome for 90 days, or six months if they are doing business with services sellers. Like Australians in China, Chinese workers in Australia can bring their spouses and dependents with them when they stay for a year or more.
ChAFTA Wastes No Time
To speed development of the tourism services industries in both countries, both parties to ChAFTA promise transparent visa and immigration processes, with timely responses to applications. If you’re considering opening your next office in China’s tourism services sector, contact me today to discuss potential risks and possible solutions to that adventure.
If you are interested in knowing more about China, download the first free chapters of my book here.