New Zealand changes tack in wooing affluent Chinese investors
New Zealand is rolling out the welcome mat for deep-pocketed investors from the mainland and Hong Kong - but there's a catch.
Instead of buying up farms - a popular but controversial investment target - Prime Minster John Key wants investors to pour their cash into buying factories that make fridges, ovens and washing machines, food processing plants or building hotels.
The move comes as Canada restricts its migrant visa scheme amid perceptions that the programme was oversubscribed by mainlanders wanting to gain citizenship.
"Our view is that [China] has been an important part of the growth story for New Zealand but we are not shy about saying where we would prefer that investment being undertaken," Key said in Hong Kong yesterday. "The purchase of land is a much more politically sensitive issue than the purchase and construction of a new hotel or a milk processing plant or a white goods manufacture," the leader of the centre-right National Party said, wrapping up a week-long visit to the mainland and Hong Kong.
He said New Zealand welcomed the Chinese - the largest source of overseas money - but it had to be funnelled to the right places following discontent among locals that assets, such as farms, were being snapped up.
He downplayed the country's over-reliance on China, saying it had growing ties with Korea, Indonesia and the US but the mainland was New Zealand's top market for commodity exports. "We've always been a country that's been reliant on foreign capital," he said. "Second, we actually welcome foreign investment; the question is where do we want it. We are well and truly aware that we don't want all our eggs in the Chinese basket."
Key hosted an investors' lunch in Hong Kong yesterday with "some of the biggest names with the largest amount of capital" such as Sino Group and Cheung Kong.
"We are quite direct with [investors]," he said. "We say, 'Look, with purchases of land, we're not necessarily going to stop you but we don't want to see every farm in New Zealand sold overseas'. Shouldn't is a harsh word but we don't actively encourage them to do that."
On Wednesday, Key met President Xi Jinping for the second time in 12 months and set a new target for two-way trade of NZ$30 billion (HK$199 billion) by 2020. It is currently NZ$18.3 billion. "There's really been exponential growth with mainland China [and] it's not just the volume but the value of what we're selling," Key said. "We are moving up the value curve, selling a lot more infant formula which is probably five times as valuable as dried milk powder."
Accompanied by his ministers for trade and food safety, Key's trip has been viewed by many as a way to repair relations after New Zealand dairy giant Fonterra was hit by a botulism scare last August that sparked a global recall of infant formula. It turned out to be a false alarm.
Key was confident New Zealand's reputation as a clean country with quality products remained untainted. "If you're someone living in downtown Beijing and have this image of New Zealand as this pristine beautiful country with friendly people, I think it enriches the consumer experience," he said.