By Gareth Vaughan
As China moves into net investor mode, New Zealanders should understand Chinese eyeing investment opportunities here are doing so because they see good opportunities and believe they can perhaps do a better job than locals, rather than wanting to take over the country.
This is what Professor Siah Hwee Ang, the BNZ Chair in Business in Asia at Victoria University, told interest.co.nz in a Double Shot interview.
"They are here not because they want to take over the country. They are here because they really see a good investment opportunity, or they believe that they can do a better job than some of our local players," Ang said. "So they believe there's an opportunity, 'we should go there because we have run out of space in China in terms of growing those kinds of good products,' for example."
"So New Zealand is a good place to do it. Unfortunately if some of our local players are not doing it, the Chinese players will start thinking maybe they should be the one to try to take the initiative. So in some ways it's an opportunity for them in terms of the capitalist way, rather than saying 'I want to come and conquer your country'," added Ang.
Ang, who originally hails from Singapore, said the Chinese see New Zealand as a very good place for farming that's under utilised.
"We know because of soil issues in China, pollution issues, there is so much land space in China that you can't use for farming. So they want to be here because we have the best environment for those kinds of activities, but (in their view) we are not maximising it and they see that as an opportunity," said Ang.
Other than areas such as the dairy industry, food and wine, Ang also expects to see more Chinese investment in tourism in New Zealand.
'NZ not over dependent on China'
In a speech earlier this week Minister of Trade Tim Groser raised, and countered, the question of whether New Zealand's in danger of having too much trade dependence on China. Annual two way trade topped $20 billion in the May year, with annual exports to China up 53% to $11.6 billion and imports from China rising 9% to $8.5 billion. China also overtook Australia as New Zealand's biggest trade partner. In the 12 months to May China took 38.2%, or $5.9 billion, of New Zealand's total $15.5 billion worth of milk powder, butter and cheese exports.
Credit rating agency Fitch, which this week affirmed New Zealand's long-term AA foreign currency credit rating and raised the outlook on it to positive from stable, did note the New Zealand economy's large, growing and connected "twin concentrations" in dairy exports and in exports to China.
"China overtook Australia to become New Zealand's biggest export market in the fourth quarter of 2013. New Zealand is vulnerable to a shock to its terms of trade in the event of a sharp slowdown in China, although such a slowdown is not Fitch's base case," said Fitch.
For his part, Ang doesn't see over dependence on China.
"I don't think if we actually look at the size of New Zealand we are actually overly dependent on China. We think we are relying on China a lot, but if you look at the trade we are doing with China, it's just a small bin in China's portfolio. And bear in mind with a lot of the products, even if we don't trade with China, there will be other countries that will trade the same products from us," said Ang.
"So it's not as if we have an issue about oversupply when there's no demand. There's always going to be a lot more demand than what we can actually produce as a country."
In terms of other Asian countries offering New Zealand good export opportunities, Ang cited the Association of Southeast Asian Nations (ASEAN) and India.
"The countries of ASEAN, there's one big market there, 600 million people. They are very, very tough markets to enter of course, but then bear in mind that whilst we are having good relationships with the Chinese, the Chinese are also starting to build a lot more relationships with ASEAN. And ASEAN is going to have its ASEAN economic community in 2015, (so) there will hopefully be a bit more integration there," Ang said.
"The next one up is probably going to be India, but that might be a few years down the road."
17 Comments
"China has run out of room..." -- Even if they are planning to take over NZ if asked they arn't going to say yeah actually that is our plan
"We think we are relying on China a lot, but if you look at the trade we are doing with China, it's just a small bin in China's portfolio." -- So we are not over dependant on China because China isn't over dependant on us ?!?!
No. I would like to see NZ land in NZ owners hands. How many foreigners own Chinese land?
thing is OIO is supposed to ensure that EVERY NZ land purchase is a strategic advantage for NZ (not just cash or jobs, actually strategic advantage not "beads and blankets").
Yet once a company (or individual like Cameron) have purchased, the OIO seem to be too busy counting their salaries to do see their tasks are properly achieved.
If one sees China as a ruthless conqueror, there is then only one type of Weapon of Mass Destruction that China can and probably will use to achieve unintentionally.
Cultural influence.
Picture a world where you eat Chinese food, celebrate Spring Festival, speak a bit of mandarin, shop on Tmall, find your business partner on Alibaba, chat on WeiChat, have a partner/a colleague that is somehow related to China, read some philosophy of Confucius and agree to it. Is it not happening already?
Alibaba now claim that their net value will be around $US 130 billion when they IPO later this year , making them the largest tech IPO in history ...
... last year they handled more transactions than eBay and Amazon combined ... and they accounted for 80 % of mainland China's online retail transactions ...
We can choose to get snarky and sneer at them , or we can join in the fun and the profits .... each individual's choice to make ...
We are a Global Society and land is no longer a boundary. All Kiwis were foreigners at some stage, why do the Chinese not have the right to invest if they see the benefits, beauty and opportunity our country can provide them. We were happy to ship them over when we needed them to mine our gold, and happy to kick them back out when we no longer required them. I have seen very little agression from China compared to other NZ "allies" that have started invasions and seen very little positive results.
Do you really think that China is training all nationals to be preparing an investment based invasion and that it's some big conspiracy? Everyone is looking after number 1, and if they are buying here its out of their own pocket for their own personal ambitions, whatever that may be (residential anyway).
National selling us out? Mate, I don't see any Party forcing you to sell your home. Greedy kiwis who like selling for Capital Gains would be the only people encourcing speculation in the property market. I'm of European ethnicity but I have not seen many negative cultural influences from China, I have good Chinese mates and enjoy the odd dumpling out. Variety is the spice of life mate get out a little bit.
i dont disagree ive got nothing against them. but i do not like the thought that there are millions of their new wealthy wanting to get their money out of china before its ghost cities and environment goes kaput and they are coming here and pricing out all the local kiwis.
yes all kiwis came here at some stage but that doesnt mean we cant make up rules now.
you go and try some land in china, i think we should look after our own instead of getting overpopulated by them here like they have in china
They have the right to invest what they like in their own country. we do have boundaries, that's why Kiwi's who live here call it "home", not "investment portfolio".
And that's why they don't have a right to invest in the country I'm looking after for my children.
And no, others might want them to mine their gold and build their houses and pay their wage slavery - I and many Kiwi's like me don't want them. We love a few immigrants, but this is our land, and if those chosen few come, then they join our family of Kiwi's, that's the condition for joining and living as part of OUR Kiwi community.
If you love it so much, go buy a house in China and live there.
As for the aggression, pick up a history book once in a while. Free Tibet while you're at it - which other "aggressive allies" have seized a neighbouring country recently?
There is never going to be any proper debate on what is good for NZ and for NZ citizens in regards to off-shore investors investing here. There will be a threshold point to what off-shore investment can be in NZ similar to that of Government spending...... there is only so much that can be transferred into the hands of foreign owners that the taxation system can withstand....and no one has identified the tipping point.
I find it rather perplexing that NZ farmers are meant to be some of the best in the world but Ang sees NZ farmers as not maximising the land as well as what Chinese can. Where are the financials to back up these statements?
Do Chinese Investors into NZ farming receive agriculture subsidies back in China on their NZ farming production? This is a very significant point and journalists here do not bother to ask these questions.
There's good debate.. thing is it's hard to debate a strong "for" argument when there is no decent reasoning to support that side of the debate.
Anyone who thinks the New Zealand.... my homeland... is for sale, can ... "go away"
If the think, as mentioned by a previous poster, that others should be entitled to purchase what they want... then I want to purchase _their_living_room_ in their _home_.
I will then decide if I want to rent it back to them, or demolish it, or just move someone else into it. If you don't want to sell _your_ home, then don't for a second think that I'm willing to sell me home land. .... just ask a East Coast Maori person what they think of it. They got screwed over last time, so you think so folks would learn!
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