A New Zealand Sectors Report 2014, published by MBIE, said "New Zealand is less connected with the global economy than other similarly developed countries." It cited inward direct investment per capita of US$18,533 compared with an OECD small nation average of US$40,509 and Australia of US$26,638. Most of that foreign investment came from Australia (63 per cent). China featured 6th on the list with only 0.4 per cent of foreign direct investment into New Zealand.
As China turns its gaze our way, that connectedness may be growing.
Chinese tourism into New Zealand has flourished, and the sector is poised for further investment. Tourism NZ says China is our second largest tourism market. Consequently, a number of four or five star hotels are in development: Shanghai-based New Development Group's NDG centre in Auckland's CBD; Fu Wah's Hotel in Auckland's Wynyard Quarter. Jiang Zhaobai of Shanghai Pengxin Group bought the Hilton Hotel in Queenstown last year.
Three of China's four state-owned banks are now registered in New Zealand.. That alone signals investment will grow.
The education sector is benefiting. China is the single largest source of international students, with ENZ reporting New Zealand had made "the top five preferred overseas study destinations for China's wealthy".
As far as investment in New Zealand farming land goes, there has been growth.
But controversy has been fuelled without full justification. As Colin Taylor reported in the Herald's 2014 Agribusiness Report, well down the list of investment in farms was China.
It's relatively difficult for offshore investors to buy productive farm land here. New Zealand's Overseas Investment Act has in-built protections and restrictions.
China's investment in agricultural land reveals a strategy for vertical integration in investment in the dairy sector - farms as well as manufacturing plants. This brings us more jobs in manufacturing. It also contributes to products produced in New Zealand being tailor-made for the Chinese market.
With regards to Chinese investment in residential property: there is a growing Chinese population in Auckland, now with 171,000 Chinese in our city. Let's not forget that migration has resulted in economic growth in the city.
Investment has not all been one way. Fonterra's investment in Chinese dairy enterprises is increasing. New Zealand's presence in China is also growing.
All in all, then, this information reveals a constructive picture of China in New Zealand: plenty of room for more investment, and a positive outcome for New Zealand's relationship with China.
Where's the bad news in that?
• Martin Thomson is a partner at DLA Piper New Zealand and chairman of the NZ China Trade Association.
HSBC China Business Awards
The number of Chinese tourists visiting Whale Watch Kaikoura has soared by more than 200 per cent in four years, and the operation is forecasting numbers to double again within the next five years.
General Manager Kauahi Ngapora says while overall tourist numbers from China are surging, attracting high quality independent tourists has taken a huge amount of planning and investment. "In 2010 we put a five year plan in place which involved spending time in China to build relationships, employing Chinese speaking staff, and engaging with Chinese social media.
"The plan worked so well we exceeded our target early and independent travellers are now our greatest driver of growth."
Whale Watch Kaikoura has been named as a finalist in the 2015 HSBC NZ China Business Awards for its success in leveraging the Chinese tourism market.
David Wishart from the HSBC NZCTA China Business Awards says Whale Watch Kaikoura is a standout example for other tourism organisations keen to tap into the Chinese tourism market.
The 2105 winners will be announced at a Grand Gala Dinner on Thursday, 7 May.
The finalists are:
• Mainfreight Award for excellence in Export or Import: Synlait Milk, New Zealand Focus and Glacier Investments.
• Auckland International Airport Award for Excellence in Tourism: Ngai Tahu Tourism , Whale Watch Kaikoura and Youth Hostels Association of New Zealand.
• DLA Piper Award for Inward or Outward Investment with China: Fisher & Paykel Appliances, Milk New Zealand Holdings, Oceania Dairy and Yashili New Zealand.
• HSBC Award for Supply Chain Innovation: Comvita NZ, Milk New Zealand, and Synlait Milk.
• Cathay Pacific Award for Outstanding Contribution: Chinese New Settlers Services Trust, Natural History NZ and Waikato Institute of Technology (Wintec).
• HKNZBA Award for Hong Kong Business: Comvita NZ and New Zealand Focus
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