KEY POINTS:
Vector's $785 million deal to sell its Wellington network to Asian "superman" Li Ka-shing's Hong Kong holding company has brought fear-mongering xenophobes out in droves.
Finance Minister Michael Cullen seems confident the sale will proceed. But if the political antagonism to the deal continues to build, Cullen might
- as with the Auckland International Airport sale - yet find himself under pressure from coalition allies to come up with another tawdry excuse to block the sale.
His reluctance to take a myth-busting approach to fears raised by Labour's political allies - and others - is astounding. Among the allegations in the past 48 hours are:
* Li Ka-shing (a businessman with connections to the Chinese military) is really a stool pigeon for the expansionary ambitions of China's communist Government.
* Selling the power network to Li Ka-shing will open the door for him to bring lots of Chinese workers into New Zealand to work for the company thus displacing Kiwi workers.
* Li Ka-shing will ratchet up lines rentals for captive Wellington consumers to get a top-notch return on his $785 million purchase price.
* Cullen should block this deal or find himself guilty as charged of political hypocrisy.
The reality is that Li was well on the way to the top of the heap in Hong Kong when former Chinese Premier Deng Xiaoping began opening up China's doors to foreign investment.
It's a moot point that communist China was the focus of Li's own expansionary ambitions rather than the reverse.
His connections to the Chinese leadership are first-class. He sits on the boards of several top Chinese Government-owned companies (as does former NZ Prime Minister Jenny Shipley with her seat on the board of a major construction bank).
The United States Government did block his bid to buy America's Global Crossing telco because of his connections and politically orchestrated concerns the sale would pose a threat to national security.
But it's instructive that US President George W. Bush ultimately allowed a port security company owned by Li to inspect cargo coming though Bahama ports controlled by the Hong Kong magnate in order to detect nuclear, biological and chemical weapons.
This doesn't mean the Overseas Investment Office - and ultimately Cullen - shouldn't carefully scrutinise Li's Cheung Kong Infrastructure Holdings when it assesses whether the company is of sufficiently good character to enjoy the privilege of owning NZ assets.
If the OIO comes under pressure, it could seek assurances from Cheung Kong that it will not run fibre optic networks - which could conceivably eavesdrop on the heart of the capital's political, security and defence establishment - in parallel with the lines network. But that surely is at the farthest end of the spectrum of concerns that could be raised.
The reality is that Cheung Kong is a major infrastructure investor with investments in energy, transport and water in many countries including Australia.
What has not yet been spelled out in crystal-clear terms is that Cheung Kong is not a Chinese company but a Hong Kong-based multinational.
Its headquarters are not in Beijing or Shanghai. It is not a beneficiary of the China free trade deal in any respect. The investment protocols under that deal - which include potential liability for compensation for any losses suffered on investments in New Zealand through the introduction of adverse Government policies - do not apply to Li's company.
Those coming up with some of the far-fetched allegations, such as Green MP Sue Kedgley and New Zealand First MP Doug Woolerton, have, it seems, failed to do their homework before bursting into opposition.
Kedgley claims the new owner will ratchet up Wellington power prices to pay for its purchase.
New Zealand-based Vector arguably did that - but was slapped down by the Commerce Commission. Vector chief executive Simon Mackenzie notes the regulators will continue to exert strong pricing controls after the acquisition.
He will not directly say which other companies were in the bidding. But he says Cheung Kong came up with the cleanest deal.
Woolerton has speculated that selling the network to Li Ka-shing's company will clear the way for Chinese workers to come here under the China free trade agreement. That is frank ignorance.
If Woolerton had bothered to check with the Ministry of Foreign Affairs and Trade he would have found that the Chinese FTA applies to China's custom territories - not Hong Kong.
There is no way Cheung Kong could cite the China FTA as an avenue to bring its own workers here.
Even if China's State Grid had won the bidding war it is inconceivable that it would have been able to import mainland Chinese to take New Zealanders' jobs. The sector is not stipulated under the skilled labour provisions in the FTA.
But facts don't suit the fear mongers.
Let's remember here that both politicians are arguably themselves beneficiaries of globalisation.
Kedgley earned her stripes as a United Nations official in New York while Woolerton comes from an NZ dairy industry which has made plenty of bucks from investing overseas.
Cullen is correct to say that the acquisition will not have to be assessed against the new foreign investment criteria he brought in to block the Canada Pension Plan's bid for Auckland airport.
This requires the OIO - and Cabinet ministers - to assess if a change of ownership involving important strategic infrastructure on highly sensitive land assists NZ control. Taken at face value the rules would imply that no foreigner could grab control of any important New Zealand infrastructure.
But Cullen has deliberately kept the rules murky to ensure political flexibility is maintained.
Unfortunately for him that decision may yet backfire.
NZ Shareholders' Association chairman Bruce Sheppard has told his team to examine a class action against the Government for losses suffered by Auckland Airport shareholders as a result of the jettisoned Canada Pension Plan bid.
He concedes a class action would be hard to mount. But for a shareholding public - angered by the Government's decision to put its political interests above that of a fair market regime - the temptation to try and whack the Government will be appealing.
