By Gareth Vaughan
China Construction Bank, one of China's big four government controlled banks, is looking for staff to help it launch in New Zealand.
Interest.co.nz understands a recruiter has been sounding out potential New Zealand staff on behalf of the bank. And Companies Office records show China Construction New Zealand Ltd as an approved reserved name.
According to the recruiter China Construction Bank is due to set up operations in New Zealand soon, with an initial capital injection of US$50 million. The focus will be on providing commercial banking services to multinational subsidiaries and firms with trade links to China. The bank is also looking to fund Christchurch rebuild projects, and longer term establish retail banking along similar lines to what it has done in Australia.
To become a New Zealand bank, China Construction Bank needs to obtain banking registration from the Reserve Bank. Asked whether the Chinese bank has applied for this, a Reserve Bank spokesman would only say the Reserve Bank doesn’t confirm, deny, comment on or discuss licence applications.
China Construction Bank's board includes Murray Horn, the former ANZ New Zealand managing director and ex-secretary to the Treasury. He succeeded former Prime Minister Jenny Shipley who was on the board from 2007 until 2013.
'Clear intention' to open in NZ
Horn told interest.co.nz there's a "clear intention" to open a branch in New Zealand.
"While we have to comply with all the regulatory requirements, we'd like to be able to open sooner rather than later," Horn said.
In terms of seeking banking registration from the Reserve Bank he said; "If they're not talking about it we can't."
In March last year China Construction Bank's board unanimously voted in favour of establishing a subsidiary bank in New Zealand.
"It was resolved that the establishment of a subsidiary bank in Auckland City, New Zealand with an original capital injection of US$50 million be approved," a resolution from a board of directors' meeting says.
Total assets of about NZ$3 trillion
China Construction Bank recently posted a 10.4% rise in first quarter net profit to 65.9 billion renminbi (about NZ$12.2 billion). The bank also reported annualised return on average assets and annualised return on average equity, respectively, of 1.67% and 23.89%. Its net interest margin stood at 2.81%. China Construction Bank has total assets equivalent to about NZ$3 trillion having grown assets 5% in the March quarter.
The Reserve Bank confirmed Industrial and Commercial Bank of China (ICBC), another of China's big four banks, as a New Zealand registered bank last November. ICBC NZ is chaired by ex-Reserve Bank Governor and former National Party leader Don Brash, and has a branch at the bottom of Auckland's Queen Street.
China Construction Bank was approved as a foreign authorised deposit taking institution by the Australian Prudential and Regulation Authority in 2010. Here's its Australian website. It describes itself as a leading commercial bank in China with three principal business segments being corporate banking, personal banking, and treasury operations. The bank says it's among the market leaders in China in infrastructure loans, residential mortgages and bank cards.
Agricultural Bank of China was the most recent Chinese bank to open shop in Australia following in the footsteps of Bank of China, China Construction Bank, and ICBC.
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20 Comments
so what is Rabobank playing at?
Rabobank's senior dairy and beverages analyst, Sandy Chen is visiting New Zealand to speak on key developments in the Chinese dairy sector and the implications for New Zealand dairy farmers.
Mr Chen who's based in Shanghai, said 90 percent of China's milk powder imports came from New Zealand last year and China took about 40 percent of this country's dairy exports.
He said China would like to reduce that level of dependence on a single country and New Zealand needs to be aware of that.
http://www.radionz.co.nz/news/rural/244308/dairy-warned-on-china-dependency
one never gives up/walks away from a hard won export market....
it would also seem to cut across
Indeed, another of the reassuring aspects of the visit has been John Key's continued access to President Xi Jinping and Premier Li Keqiang. For a country of New Zealand's size, this can never be taken for granted.
It confirms that the advantage bestowed when New Zealand became China's first partner in a free trade agreement in 2008 remains intact. This was re-emphasised when President Xi confirmed that he planned to accept an invitation to visit this country shortly before or after the G20 in Brisbane in November.
There is, obviously, huge potential for New Zealand in the new trade goal. Historically, it has run a deficit with China, but last year it sold almost $2 billion more to China than it imported. The respective populations of the two countries suggest that gap should increase much further in New Zealand's favour over the next few years. China will have to, as Mr Key suggested, "drink a lot more milk, and they're up for that".
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11223281
and
Could one of the www.interest.co.nz lads give Ben
CEO Ben Russell told interest.co.nz the biggest factor was strong farmer cashflows.
"We certainly haven't reduced our (lending) appetite in any way," Russell said. "It's really a record year for the dairy industry." http://www.interest.co.nz/rural-news/69867/rise-about-60-customers-quarterly-fonterra-payouts-sees-rabobank-lending-book-shrin
a call ask for comment.
and a second call to Fonterra given
if Sandy is right.... then maybe he rather than Ben would be worth a chat for next time, before he heads home..
We are being Colonised all over again.
I was told yesterday that this company now owns %20 of our vineyards.
http://www.stuff.co.nz/business/industries/10041533/South-Island-vineya…
Aj we lost the vineyard ownership battle some time ago:
The biggest acquisition so far, the purchase of the New Zealand Wine Fund by California firm Foley Family Wines, pushed the level of foreign ownership in the industry to more than 45 percent, according to figures from New Zealand Winegrowers
There have been more acquisitions, such as the one you refer to, since this report.
http://www.destinybaywine.com/documents/IstheNewZealandwineindustrydest…
Co, huge Savi Balnc harvest this year, prices down as low as $500 a tonne in HB.
So it will be big bladders in containers heading for UK supermarkets again. Thay left some great reds on the vines as the wineries were full of Savi blanc, thats tells us a lot about the industry.
Thanks fot the Link CO, he saw the future.
The likelihood that in fifteen years New Zealand will be exporting 250 million litres of wine for next to nothing is remote. Years before such an economic Armageddon takes place the industry will downsize and restructure. All but a few of the small and medium producers will collapse. Vineyards will be torn out or top grafted with other varieties of fruit. Distressed sales of wine stocks and land will cause property values to tumble, attracting foreign investors who will snap up valuable land and wine making assets for clearance prices. New Zealand wine will be sold unbranded in bulk or become a fractional blending component for other shrewd marketers who know what they are doing. Those premium brand producers who manage to survive will be marketing themselves not as New Zealand wine, but as Gimblett Gravels, Waiheke Island, Hawkes Bay, or other appellation specific regions. And the once proud, vibrant and growing New Zealand wine industry will be a mere shadow of its former self.
We are seeing it everywhere and for those who disagree [ gratuitous insults deleted. Refer Comment policy. Ed] but they will eventually by which time it is too late to voice opposition.
Example of how our current open door policy laws are affecting house prices and kiwis who want to buy a home:
Blockhouse bay road, single property purchased and developed into four brand new homes.
Each sold for around $800,000. Developer, hard working taxi driver, owns 1 of them and the other 3 sold immediately at the first auctions to you-know-who [ racial epithets deleted. Don't do it. Ed]
Several months later I have noticed that only one of the three are being lived in, which is the guy who developed them.
So there it is, foreign or non-residents buy without the intention in living in them, with seemingly unlimited cash/funds, outbidding local kiwis who are then forced to rent of the same people who probably own their rental.
As a bonus peice of info:
I work in a PostShop and let me tell you, at rates payment time there is no other race of people that I see coming in to pay their rates on at least 10 properties at once and it is not limited to just one or 2 people there are dozens and this is at just one postshop.
The phrase "tenants in our own country" is becoming more and more a reality each passing day that nothing os allowed to be done about this.
Henry, I heard Sandy speak - very good speaker. Pleased Rabo brought Sandy out to explain situation to the grassroots rather than corporates.
What I find more interesting is that I hear Fonterra is more than a little concerned about Danone buying up Gardians milk processing facility. Room for a second dryer was planned for in the initial plans......
Agreed, our French friends do seem to leave the romance at home sales and marketing wise.
China-wise we had heard they were more concerned price -wise rather than volume wherefrom. Or is the volume wherefrom their first step in pulling in the price you think? We dosn't see them pulling back cost structure from their mega/quality farm raw milk production.
Did Sandy show you the slides his boss, the Ozz NYC based head of analysis is showing in US?
Some of the slides were the same. Focus was slightly different due to different audience.
A US farmer friend said that in his area they don't expect production there to increase much, if at all, due to high cost of feed. They have been building their land holdings to become more self sufficient in feed supply, rather than increase production - as your link suggests.
Interesting link - thanks.
we are just caught by the Chen message of you are selling too much to China, when other Rabo folk are egging on the/that same opportunity of China sales to any who can/they see as could.
1. the USA (we understand they say, well the your neighbour has already shipped the feed you are looking for you to China).
see page 10 and 11 (esp the cost structure/debt bar graphic top right page 11) for their unguarded/frank analysis of south island dairy...
we understand that as bankers, they are touting the china market to other milk producers (USA/CAL & TAS) looking to see development/expansion that means new credit funds in, seems they are thinking that NZ debt levels not likely to increase as much again. and as a bank their life depends on making more new loans - so if off to find fresh lending pastures....
but the softening us up by saying well you sell enough or too much already does not sit well.
http://www.farmingshow.com/audio/376529252-sandy-chen--rabobank
mutual concentration risk, some level of diversification by both sides. - he says (we think this is something read/repeated from an MBA text book).
Thinking just of WMP. Whilst we have WMP to sell, we need see China takes as much as it can at as high a price as it can. Stepping back, selling at lower price to LDC's to have USA or TAS take higher priced sales is v poor. (imagine, JKey etc mentions to china, thanks but no thanks, we feel you buy too much).....
The other markets would not thank us, they buy on price and cannot afford much (to the point their people go without in years like this), gee even the branded products are acting like commodity markets - look at the Oz supermarkets and their treatment of mainland cheese etc....
You would think, though my belief is that most of the foreigners buying up NZ houses are doing it completely cashed up, as what bank worth its salt would lend on something so much more than its valuation?
And my understanding is that the Chinese govt is looking for ways to stem the outflow of money from the country, so doubt very, very much that they would turn around and provide loans for it.
My thoughts are more toward the sort of thing they have done in China, all this huge building of cities that no-one wants.
In Hamilton here there is a whole development gone bust, google Hart Rd Tamahere and you will be about to find out about it. What is the council now to do about all these enormous houses, built without consent, now sitting there on all this valuable land? We absolutely must not fall into the trap of allowing things like this to happen and to make it plain, I think we need to go in with the wrecking ball.
We are being manipulated and we need to drop the whole being afraid of being labelled xenophobes and decide what WE as NZers want for OUR country
Oh haha believe that and you will believe ANYTHING of course they were to be student accommodation and operate as boarding houses - a commercial activity. It may be that this has been circumvented but a wise eye will be kept on them, believe you me.
Two other houses, less flashy but very obviously the same sort of thing have popped up on Gordonton Rd as well. That land may well have some commercial zoning and will of course, be attached to a proper sewage system, whereas the one in Tamahere will be relying on septic tanks and you need a LOT of land to cope with those sorts of numbers of people where treatment is concerned. THAT is probably the biggest problem.
I did not know where these houses were the other day until I happened to have to drive out there and spotted these houses and the first thought that crossed my mind was that the Hart Rd houses bore a lot of similarity to the ones on Gordonton Rd so I went and had a look. They look, essentially like 2 houses jammed together. All rooms have ensuites and all rooms have external access. These WERE intended as boarding houses, no doubt about it.
People MUST stay within zoning restrictions.
In just two years,from 2011 to 2012, China produced more cement than the US did in the entire 20th century,
Article from the Financial Times, posted on TAE. http://www.theautomaticearth.com/debt-rattle-may-14-2014-china-will-dra…
Guess that explains the big shift to diversify away from the outrageous Chinese property market.
From 2013 to 2020, we expect the sales volume of the country’s property market to shrink by 36%. They can keep on building but no one will buy“, and you’re painting an absolute horror scenario. Think about all the countries in the world who have been making billions on delivery of construction materials. Think about the millions of Chinese construction workers. And the millions of property owners who will see their homes drop in value. Plus the government, which receives 39% of total revenues from land sales and property taxes. You’re looking at, at the very least, a severe depression in China. Against the backdrop of a world that has a very hard time keeping up the pretense of recovery. The fall in property sales almost doubled from the previous month. And these numbers come from Beijing itself, known for its love of rosy glasses. And don’t forget that the entire industry is leveraged up to and beyond its ears, much has been built on the basis of 10% down as collateral, so a 10% drop may be enough to wipe out most collateral.
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