Investment
The NZ-China FTA contains measures to encourage and promote the flow of investment between New Zealand and China. The parties will also work together to increase the security of investments in each country.
Both countries have agreed to treat investors and investments of the other country at least as well as they treat their own investors ('national treatment'). The obligation is subject to an exception for existing non-conforming measures (existing laws and regulations that are not in conformance with the FTA), although it includes a 'ratchet' mechanism under which any improvement in such measures is automatically locked-in for Chinese investors. The scope of the obligation is also limited to the best treatment contained in existing bilateral investment agreements with Hong Kong SAR and China.
Both countries have also agreed to give Most Favoured Nation treatment to investors and investors of the other country, except in respect of fisheries and maritime matters. This means that any better investment treatment that New Zealand extends to third countries must also be extended to China. The obligation does not extend to the treatment that New Zealand gives to its existing FTA partners (Australia, Thailand, Brunei, Chile, Singapore and the Pacific Islands).
As in the case of services, the obligations on investment do not apply in respect of subsidies or government procurement.
The FTA contains additional protections for investments, including:
- International law standards of fair and equitable treatment.
- Compensation for losses arising from war, armed conflict or similar situations.
- Protection from the funds of an investor being arbitrarily expropriated or nationalised.
These protections are in line with New Zealand's existing regulations and practice.
The FTA also provides a framework for the settlement of disputes between foreign investors and the government of the country in which the investment is made. This framework includes opportunities for consultation and negotiations. If no settlement is reached, the dispute can be heard in the domestic court system of the country concerned or can be taken to international arbitration.
- Page last updated: 03 December 2008
