It's election year and once again the issue of foreign direct investment has been raised by various politicians. The focus of attention is unquestionably on investment by Chinese investors.
There are New Zealanders concerned about the impact of significant investment by Chinese in New Zealand. Should they be? In my view, they should not.
New Zealand has long had foreign investment. In the early days it was from Britain. At different times we have had significant investment from Europe, the United States, Japan, and of course Australia.
The level of investment has tended to follow the relative strengths of different countries' global economic power at different times, and their connection to New Zealand. So it is no surprise that as China's global economic power rises - as does the level of trade between our two countries - more Chinese enterprises have sought to invest here.
In my view, the current regulatory framework for foreign investment adequately protects New Zealanders from inappropriate foreign investment.
The Overseas Investment Office requires that any overseas persons behind an investment needing its consent are of good character. So we should not fear an invasion of those with doubtful links.
Investments by overseas persons in land-based transactions requiring approval must meet additional criteria; in particular, they must show that their investment can add to the New Zealand economy, over and above that which a New Zealand investor can show - there needs to be a real benefit to New Zealand from the investment.
We should be cautious about changing our regulatory environment in relation to foreign investment - particularly where that change is politically driven. In attracting international investment generally it is important to be seen as a country with transparent, clear rules.
Changing the rules on international investors can be damaging reputationally for us and have long lasting effects. Most international investors have choices about where they apply their capital. There are countries other than New Zealand wishing to attract foreign capital to grow their productive base.
It is a detriment to investment if a country is seen as fickle in its approach to foreign investment - especially if that fickleness is seen as politically based. New Zealand generally has a reputation for being transparent, its government agencies free from political interference and not racist. Changing foreign investment rules to make it more difficult for Chinese enterprises to invest here would be a backward step in New Zealand's standing in the international investment community.
That would be the case however we dress it up - if a change to the rules is seen as a response to limiting investment by Chinese investors (even if it is written in neutral language), we run the risk of being seen as racist.
We should also reflect on the fact that making it harder for Chinese enterprises to invest in New Zealand may well impact negatively on New Zealanders seeking to obtain the best price for the business they have grown or property they own.
Here is a question to think about - would it really be fair to say to an ordinary hardworking Kiwi that you cannot sell your business or property to Mr or Ms X from China who offers you $1 million more than someone else because of the country of origin of the buyer? But it would be fine if they came from England or Europe?
New Zealanders should not panic about the level of Chinese investment here. In the year ending March 31 2013, total investment from China (including Hong Kong) only represented 2 per cent of all investment in New Zealand for that year.
If we look just at foreign direct investment from China, including recently announced projects that are still undergoing regulatory approvals, the total of Chinese investment would still be less than 5 per cent. That does not suggest a flood of Chinese investors buying up New Zealand businesses and property.
China is New Zealand's largest trading partner and has just become our largest export market. That reflects the desire by China for the products New Zealand excels at producing. As the Chinese economy grows and the wealth of its people rises this should increase demand for New Zealand products and services. Encouraging investment in additional production capacity in New Zealand by Chinese investors can be a win-win.
The Bright Dairy investment in Synlait Milk during the global financial crisis is a good example of this. Synlait Milk needed additional capital to continue to grow and Bright Dairy provided it. As a result Synlait Milk was able to execute on its plans. This then assisted Synlait Milk in achieving a successful listing on NZX and providing the opportunity for more New Zealanders to invest in a fast growing company.
Given the integrity of New Zealand's regulatory framework and the opportunity China represents to New Zealand I do not think New Zealanders have anything to fear from further investment by Chinese enterprises in New Zealand.
• Cathy Quinn is the Chair of Minter Ellison Rudd Watts and a senior corporate and commercial lawyer who leads the firm's China team.