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News : China FTA to Open Up Opportunities for Local ICT Firms
Dec 1, 2014 -- Australia's free-trade agreement with China and the potential Indian deal have been welcomed as major opportunities for local ICT to expand its reach.
The Australian Information Industry Association said the China agreement offered opportunities for local ICT firms not only to service the Chinese market but also other Australian firms operating there under other parts of the deal.
The China FTA, to begin next year, will let Australian firms run wholly owned subsidiaries in China in software implementation and research and development.
"Those Australian ICT subsidiaries can specifically support other industry players", AIIA chief executive Suzanne Campbell said. These included education and health services, all of which were underpinned by ICT.
She welcomed China’s guarantee of access for Australian firms investing in value-added telecommunications services in the Shanghai Free Trade Zone and to supply Chinese domestic communications including call-centre services.
She said Australian firms were more likely to provide the platform for call centre services in China, not the labour supply.
The agreement lets Chinese companies building projects in Australia worth more than $150 million to bring in foreign workers on 457 visas.
Ms Campbell said she did not see the FTA opening the floodgates to 457 visas: "We currently have some skill shortages, the agreement may bring some additional relief in those areas."
She welcomed assurances covering respect for copyright and intellectual property which would address a "negative perception" about its abuse, rather than current reality.
The Australian Computer Society said there was a risk of more underskilled overseas professionals working in the Australian ICT market. "Based on our experience with 457 visas, we’d be very concerned that we don’t end up with a situation that operates in China today," president Brenda Aynsley said.
Ms Aynsley said Australian ICT firms in China faced an "ultra competitive" market: "I can’t see us competing except on the higher order service delivery: enterprise architecture, high-level project management, integration of services, that’s the only space we’ll have an opportunity at."
A spokesman for Trade Minister Andrew Robb said the FTA would give Australian firms providing services guaranteed access to China. Software implementation services, data processing services, services incidental to mining and manufacturing, environmental services, and scientific testing and consultancy services would be able to establish commercial presences in China.
Australian tariffs would be eliminated on incoming Chinese electronics goods while tariffs on about 80 per cent of Australia’s goods exports (by value) to China would be eliminated on day one, Mr Robb’s spokesman said.
China currently applied high tariffs of up to 47 per cent on some manufactured products. Most of these tariffs will be eliminated either immediately or within four years, the spokesman said.
Harvey Norman executive director David Ackery said the FTA would have a "minimal effect" on the price of Chinese technology goods on the Australian consumer market. "They (prices) are more susceptible to exchange rates more than any other type of influence," Mr Ackery said.
Posted by Veronica Silva Cusi, news correspondent
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Published: Tuesday, December 2, 2014