By Bill Bennett
Pengxin International director Terry Lee says revisiting the government veto of his company’s attempt to buy Lochinver is critical. Lee maintains the process is unbalanced and flawed. “We need clarity, consistency and speed. We need to reduce risks for investors. In our case we came up against tailor-made conditions.”
Lee is referring to the way government ministers chose to veto the acquisition despite the Overseas Investment Office recommending the deal be approved.
New Zealand China Trade Association chairman Martin Thomson says: “It’s important to New Zealand that we can attract capital in a world that is competing for Chinese capital”. He says since the Crafer Farms deal the process changed: “Buyers and sellers of land face uncertainty and delay. It’s now a complex and uncertain process. It’s time consuming and expensive.”
Thomson says the government is aware of the problem but is unable to act because it lacks political support. He supports the proposal – outlined by Prime Minister John Key to the China Business Summit – to charge buyers more to go through the OIO process and use that money to streamline and speed applications.
Earlier at the Summit, Key said his party cannot get parliamentary support to fix the Overseas Investment legislation. The issue has become politicised.
That politicisation is complex. NZ Herald business editor Liam Dann said while there is noise around Chinese land investment, this is not reflected in political opinion polls. However, the government decision reflects public opinion.
He says that going by Herald’s experience of looking at how readers click on stories, the interest is because the issue sits at the place where two hot button subjects meet. “Land and property are hot stories in New Zealand right now. China and Chinese business are also hot topics. That makes it a hot button. I wouldn’t rule out racism. Irish, German and Australian investors are not getting the same reaction”.
Dann says he wants to see more focus on where investment goes and less on where it is coming from. He says: “We need to turn the debate towards where we want the investment to go.”
Quentin Quin, general manager, Capital, New Zealand Trade & Enterprise echoes the point about China having alternative investment scenarios. Quin says: “We have to open our hearts more. We’re seeing significant opportunities open up around the enterprise play. There are growth companies looking for capital. For example, New Zealand could benefit from direct investment in building hotels.”
Quin gave the example of a $35 million investment in a defunct dairy factory in Ngatea which is packaging infant milk formula for export only and creating 130 full-time jobs.
“The land issue is over-cooked”, says Jeremy Gardiner, chief executive, New Zealand Premium Whitebait. “We need to find the right ownership models. What do Chinese companies want? The key is security of supply. Solve that and the political issues go away”. Gardiner says there are opportunities for Chinese investment in Maori land where ownership issues make investment unattractive to traditional sources of finance such as banks.