Finance Minister Bill English says his Chinese counterparts have expressed concern to him about New Zealand's debate on foreign-owned housing, saying that the tone was more "hard-edged" than in other countries.
His comments follow intense criticism in Chinese media of Labour's release of data on overseas buyers in the Auckland market, which showed a large proportion of Auckland homes were being bought by people with Chinese surnames.
Mr English has just returned from a trip to Beijing and Xining, where he was encouraging trade and research links between New Zealand and China.
He said Chinese officials were "too polite" to raise any formal concerns about the heated discussion taking in New Zealand. "It wasn't raised with me in formal meetings. But there was a bit of background comment - not so much about whether it's an issue, because all around the world there's issues about the rising prices of housing in the big cities, and in a number of places the discussion about the role of Chinese buyers in that, so that's not new.
"There were a few comments about the tone, that it seemed more hard-edged than in most places."
The minister would not say who expressed concerns, only saying that it was "Chinese people who knew about New Zealand". He said he did not need to do "damage control" on behalf of the Government.
"We welcome investment that's going to lift our economy, but I certainly wasn't there marketing our real estate as an investment opportunity," he said.
However, Labour leader Andrew Little did not believe the party was damaging New Zealand's reputation, saying: "Information is information, and we thought very carefully before we released it. But the information told a story that was in direct contradiction to what the Government has been saying for the last couple of years, which is that the impact of the non-resident foreign buyers on the Auckland housing market is barely noticeable."
Associate Professor Henry Chung, of Massey University's School of Communication, Journalism and Marketing, says much of the coverage in Chinese media on the issue suggested people with Chinese surnames were not welcome in New Zealand and would not be "treated fairly".
The reports had the potential make some Chinese students and tourists have second thoughts about coming to this country, he added.
Chung said Baidu - China's most popular internet search engine - was currently registering 150 to 200 Chinese language articles about Labour's release of leaked real estate figures, which showed 39.5 per cent of Auckland houses sold from February to April went to people with Chinese surnames, despite people of Chinese ethnicity making up only 9 per cent of the city's population.
The state-run Xinhua news agency, widely regarded as a mouthpiece of China's Government, was the first Chinese media outlet to report the story, he said.
It appears to have set the tone of much of the coverage that followed.
According to a translation by Chung, Xinhua said it disagreed with Labour's data because it was not possible "to confirm the real originality of the buyers".
Xinhua also said it agreed with a report by the Asia New Zealand foundation that said migration from Asian countries had made Auckland more liveable and interesting.
Chung, who emigrated to New Zealand from Taiwan more than 20 years ago, said Labour's findings had also been reported by China's CCTV news network, as well as regional media.
And the Auckland-based Chinese Herald had described Labour's data as a "deep water bomb to New Zealand society and especially the Chinese community", he said.
Responding to critics who have labelled Labour "racist", housing spokesman Phil Twyford has said if they disliked the party's findings they should reveal their own research and data on the issue.
But no other such comprehensive and up-to-date studies have been carried out to measure the number of people in China who are buying Auckland residential property, Twyford said.
Chung said many Chinese residents in New Zealand were traditionally supportive of Labour, but were now reconsidering their allegiance to the party.
"They like a lot of what the party stands for, however a lot of people feel let down and wish the Labour Party had communicated with the Chinese community before going to the media," he said.
New Zealand China Council executive director Pat English has said Labour's figures had done "immeasurable" damage to links between this country and China.
"Very quickly, it went to race and if you look at the blogs and web sites, you will see some pretty hurt angry people," English told the Business Herald last week. "I just don't know [if] using names and an ethnic profile is the way to go about it."
Little China visit
Mr Little said he was travelling to China later this year and he would test Government's claim that Labour's release of real estate data had raised concerns amongst Chinese.
"We cannot be constrained about putting important information into the public arena ... because people don't want to upset the Chinese Government," he said.
"That's not the basis on which we conduct debates in New Zealand."
Mr Little became combative when TV3 political editor Patrick Gower suggested Labour had "cooked up" the statistics for political gain.
"Let's get the language right. I'm not going to stand here and have a desperate TV3 reporter use inflammatory language on this.
He added: "This is how the debate gets out of control. You get a TV3 journalist who wants to make a name for himself obviously, running that sort of line.
"We can't have professional, political gallery journalists turning up here using language like 'cooked-up figures'."
The Labour leader said that the party knew there was a potential for a xenophobic response if the data was released.
But the figures on purchases of Auckland homes by people with Chinese surnames were too significant for Labour to be afraid to release the information, he said.
"Sometimes in this job you've got to do stuff that is tough, that is uncomfortable, but you do it because there is an important nub of an issue there."
In the same month where a political firestorm erupted over Chinese property buyers on Auckland's overheated property market, the stats suggested Indians, Australians and the British outnumbered Chinese migrants.
Statistics NZ said New Zealand recorded net gains of migrants from most other countries in the past 12 months.
The biggest increases were from India, China, the Philippines and the UK.
Of migrant arrivals in the June 2015 year:-- 24,100 were from Australia, with two-thirds being New Zealand citizens-- 13,500 were from the United Kingdom, with most having work visas or New Zealand citizenship-- 13,300 were from India, with three-quarters having student visas-- 10,300 were from China, with about half having student visas.Indians and Chinese made up the majority of student visa arrivals.
All regions experienced a migration gain in the year to June 30.
There were enormously more net arrivals to Auckland than to Canterbury and Waikato, the next biggest recipients of immigrants.
In fact, with 26,800 net arrivals, Auckland was responsible for 46 per cent of the entire country's migration surplus.