Will the China FTA open doors for Australian architects?

On 17 November, Australian Prime Minister Tony Abbott and Chinese President Xi Jinping announced that a China-Australia Free Trade Agreement (CHAFTA) had finally been reached after more than a decade of negotiations. While most Australian media attention was focused on domestic produce, the CHAFTA also contains two provisions that affect Australian architects, which have been met with cautious optimism.

The first provision was the more controversial: “a framework to advance mutual recognition of services qualifications, and to support mutual recognition initiatives by professional bodies in Australia and China.”

This provision would include mutual recognition of architectural qualifications and put China on par with New Zealand as the only other country that Australia has such an arrangement with, according to David Parken from the RAIA.

However, Professor Xing Ruan, Director of Architecture Discipline at the University of New South Wales, points out that Australian qualifications are already recognised in China, and this goes some way to explaining why the CHAFTA made few ripples in Australian architecture circles.

Professor Ruan also notes that “the supply of cheap drafting and design service [from China] may have a negative impact” within Australia, but he is keen to downplay any alarm.

China has over 36,000 registered architects to Australia's 11,000, but to be registered as an architect in Australia one must possess suitable qualifications, local experience, and pass the Architectural Practice Examination (APE). The author can attest that this is no mean feat.

While all FTAs naturally involve some degree of negation, the Australia-China FTA is unlikely to have a major impact upon the movement of Chinese architects to Australia. Furthermore, the effect of this provision can be monitored through APE enrolments and the Architect Accreditation Council of Australia, the national body responsible for regulating the registration of architects.

The second CHAFTA provision affecting Australian architects provides more of a silver lining: “China will take into account Australian experience in assessing applications for higher-level qualifications, allowing Australian architectural and urban planning firms established in China, to obtain more expansive business licences to undertake higher-value projects in China.”

This provision is a first for China in trade negotiations and is likely to be closely monitored by both Chinese authorities and other countries seeking an FTA with China.

Currently foreign architecture firms working in China must submit their construction drawings to a Local Design Institute (LDI) to authorise their plans in a cascading system of licences that depends on the complexity of the building. As a project moves from design development to construction documentation, this has often led to foreign firms ‘handballing' the project onto an LDI, with little collaboration on the design intent of the details. Put simplistically, the foreign firm will often design what will be built, and then an LDI designs how it will be built.

Most observers have interpreted the new CHAFTA provision as enabling Australian architectural firms to operate in China without LDI oversight. This change will certainly appeal to architects who would like more control and influence on the construction detailing of their buildings. However, this does not necessarily mean that market access or working in China will become any easier.

Ed Lippmann, Director of Lippmann Associates, a multi-discipline Australian architectural firm based in Sydney, is optimistic about the CHAFTA but like many with experience in the industry has some reservations.

After working on a successful project in China between 2008-2009, Lippmann found working in Australia easier, and has not been back since. He says, “I'm considering going back in 2015 as there are phenomenal opportunities, but it is a challenging work environment.”

The barriers to market entry in China are still very high. A shopping list of administrative niggles including capital transfer, taxation, intellectual property rights, payment security, procurement transparency, fixed currency complications, and a lack of Client Architect Agreements standards are all unaddressed in the CHAFTA.

Nor does this list include significant barriers outside the scope of an FTA: language, culture, local building and construction standards, and proximity to construction sites. These all mean that mutual market entry between Australia and China will remain muted for many years to come.

The lure of China, with its enormous scale and increasing appetite for construction, will continue to whet the professional appetites of Australian architects, but there are broader strategic changes in China that are likely to have greater impact on bilateral barriers than the CHAFTA.

Most notably, the Chinese architectural office is changing. David Holm, a director at Cox Richardson, an architecture and planning firm, has witnessed this change first-hand through working across China and Asia over the last two decades, collaborating on some of the region's most prominent projects. He says, “There is no doubt that China now has world class architectural institutions.”

With Chinese architectural offices maturing rapidly and many of the upcoming cohort of Chinese architects having studied and worked overseas, a new generation of highly sophisticated and globally minded Chinese architectural offices is emerging. This workforce will have greater capability to confront international barriers outside the scope of any FTA.

This need for ‘soft' business skills explains the emphasis by the Minister for Communications, Malcolm Turnbull MP, in a speech recorded for the 2014 Australia-China Youth Dialogue, on greater cross-cultural empathy being critical to developing the next generation of bilateral leaders. Design firms already established as collaborative and culturally integrated operations are the ones likely to best capitalise on the CHAFTA.

Amongst the almost unimaginable scale of development in China, the CHAFTA represents modest steps to promote mutual respect on both sides, which is surely a positive platform for future collaboration.

Scott Flett is a registered architect in New South Wales and was a delegate to the 2014 Australia-China Youth Dialogue in Beijing.