Making the Most Out of Chinese Investment in New Zealand: What are the New Trends? Is Lochinver the New Norm? Does Perception Matter?
Fran O’Sullivan (Moderator)
- Terry Lee, Director Pengxin International
- Quentin Quin, GM Capital, NZTE
- Martin Thomson, Chair, NZCTA
- Jeremy Gardiner, CEO, NZ Premium Whitebait Ltd
- Liam Dann, Business Editor, NZ Herald
Having heard earlier from John Key regarding the Lochinver decision, Session 3 of the China Business Summit saw the panel tackle the subject of Chinese investment in New Zealand, with a particular emphasis on how the recent OIO controversy has changed the appetite for investment in New Zealand.
Quentin Quin reminded us that China has choices. They can place their capital anywhere around the world. New Zealand needs to open its heart more, and improve the ease of flow for global capital into New Zealand.
Jeremy Gardiner raised the point that in the end land can’t go anywhere. There are significant opportunities available to co-invest with Maori through leasing land. With the right level of capital investment Gardiner believes such opportunities could exceed the potential of the proposed Lochinver acquisition.
Pengxin International Director Terry Lee outlined his company’s stance on the Lochinver decision., Lee provided a clear outline of Pengxin’s reasons for seeking a judicial review, identifying:
- A genuine lack of clarity in the decision;
- The need to test the law in this area;
- Clarification on the Overseas Investment Act and how it should be interpreted; and
- The need to rebuild confidence and reputation for overseas investment management in New Zealand.
Lee criticised the speed of New Zealand authorities compared to Australia, and called for “clarity, consistency and speed. However, Lee still believes that cooperation and joint ventures are vital and create an invaluable mutual benefit.
That belief was illustrated by their persistence in pursuing the Judicial Review despite the decision by Cabinet Ministers to veto their application. Lee announced that Pengxin has have made a “back-up” offer for Lochinver station. This would allow the company to renegotiate a deal with Stevenson Group should the recently announced Rimanui Farms sale not eventuate.
Martin Thomson spoke of how the government is mindful of delays in the OIO process, and is seeking submissions from organisations involved in the process. The panel agreed that in most cases, companies would be prepared to pay more for a quicker, more certain process with the OIO.
Questions for our readers:
- Would investors pay higher fees to accelerate the approval of applications from the Overseas Investment Office?
- Should there be a mandatory, much shorter, time period for approval (or indication), of sale by the OIO?
- Should the OIO provide additional guidance to applicants on complex issues such as the counterfactual test?
- If the OIO continues to reject offers of the Lochinver nature, will this harm NZ’s own economic prospects?