The revelation that a Chinese company plans to buy the Lochinver Station in the central North Island is manna to Winston Peters. As the election campaign warms up, it offers ammunition for his claim that foreigners are gobbling up the country's best and most productive land. New Zealand First, he says, "will put a stop to sales of land and houses to non-residents". That all-inclusive ban may be intended to convey the idea that he is not being racist; that all foreign investors are in his sights. Either way, it represents the oddest of policies for a politician in a country whose economy has always been driven by foreign investment.
There is a particular dissonance with the current state of affairs. As much as critics of the proposed sale deny it, the China factor undoubtedly plays a role. The opponents are preoccupied with a vague fear of Chinese domination.
But this pays no heed to the relation between Shanghai Pengxin's activities here and those of New Zealand companies in China.
Fonterra, for example, has been buying farms there as part of an ambitious plan to build hubs that produce up to 1 billion litres of high-quality milk every year by 2020.
China has welcomed this investment and called on New Zealand to provide an environment to facilitate Chinese investment here "so as to scale up two-way investment and achieve all-round and balanced growth in our business ties". It is in this context that the purchase of Lochinver should be viewed. Shanghai Pengxin made the best offer for the 13,800ha station in a tender process that began late last year. New Zealand buyers had every opportunity to buy the property, which is valued at $70.6 million.
Clearly, the Chinese company saw the greatest potential in the station which, notably, is devoted not primarily to dairying but to sheep and beef cattle. Any political intervention now to stop it being sold to Shanghai Pengxin would not only distort the market but send precisely the wrong message to potential overseas investors. So, too, does Mr Peters' statement that he would reacquire the property.
The Prime Minister says he is happy for a Chinese company to buy Lochinver as long as the correct process is followed. That is as it should be. Shanghai Pengxin will have to meet the "substantial and identifiable benefit" test incorporated into the overseas investment regime in 2010. It is a significant hurdle, requiring the potential buyer to provide a benefit to the local and national economy over and above making a farm operate better.
Other investors might think twice before trying to jump it. It has probably been to this country's benefit that Shanghai Pengxin had a good deal of experience with the Overseas Investment Office when buying the Crafar farms for $200 million in 2012. John Key has noted that those farms have flourished since, underpinning New Zealand jobs in the process.
The importance of this country's growing commercial relationship with China provides Shanghai Pengxin with a strong foundation to meet the economic benefits test. And, as in the case of the Crafar farms, the OIO can impose conditions to ensure that, for example, there are opportunities for local involvement and jobs.
There has hardly been a flood of overseas investment in this country's farms over the past couple of years. Only the wildest flight of fancy could see a further sale of land to Shanghai Pengxin as, in the words of New Zealand First and the Conservatives, a "tragedy" and "madness".
Rather, it represents a welcome expression of interest in a country that should be as receptive as possible to overseas capital.
Debate on this article is now closed.