australia-china free trade agreement conference brian pilbeam, pr
australia-china free trade agreement conference brian pilbeam, pr
australia-china free trade agreement conference brian pilbeam, pr
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
7We have looked at quite a number of ventures, but in the end have not invested for a variety ofreasons.In one case it was impossible to determine whether a series of ventures were legal, and therewas no clear path to increase our stake in them over time. In another <strong>pr</strong>oposed venture inShanghai, the business would have had to be set up as an entity under China’s ForeignInvested Telecommunication Enter<strong>pr</strong>ise Regulations and obtain a licence. This, again, is arequirement specific to telecommunications and would have delayed start-up by a year ormore. In this case, time to market was a critical factor in the business case.Additionally, the rules for foreign investment in Chinese carriers <strong>pr</strong>oviding basic services will bepermitted only from December this year, and only up to 25%, and only within the geographicalboundaries of Beijing, Shanghai and Guangzhou. The geographical restrictions are to beremoved by the end of 2007, but even then the maximum foreign equity stake will be capped at49%. In effect, China’s regulations permit participation with only a very limited set of potentialpartners, and these potential partners aren’t in any way required to embrace foreign jointventures.These limitations on our opportunity to invest in China are in stark contrast to the almostcomplete <strong>free</strong>dom available to foreign investors in Australian telecommunications services.There’s also a considerable element of risk that constrains investment in value added servicesin China, with the anachronistic fax services being one of the few things that we know with anyconfidence that we are ex<strong>pr</strong>essly allowed to do.I should emphasise in this context that any commitment on Telstra’s part would have to meetour investment criteria. We have a clear set of criteria for ap<strong>pr</strong>aising whether an investmentoption is suitable.One of these concerns is the regulatory environment. In respect of China, we need to besatisfied that its regulatory regime gives sufficient clarity and consistency for us to be confidentabout investing. The fact that, to date, - we have chosen - not to make significant investmentsis telling. Neither we, nor any credible international operators, are willing to play in grey areas.