Liam Dann: NZ blip on China investment radar

Hollywood director James Cameron has accounted for more Overseas Investment Office applications in the past year than all of China's 1.3 billion people. Photo / Supplied

Special report: OIO figures show movie director, and some countries, more active in NZ market than Chinese

You might think, if you read all the coverage about the Crafar farms sale, that New Zealand was in the grip of some great Chinese buy-up; that we were facing a wave of wealthy Chinese investors with their sights set on New Zealand's food producing capacity.

We're really not though, as a quick look at the Overseas Investment Office website shows. In fact, Canadian film director James Cameron accounted for more applications to the office in the past 12 months than all of China's 1.3 billion people. He made seven applications compared to just five by Chinese companies.

Clicking through every application the office has dealt with in the past 12 months and tallying the international league tables might not be scientific but it provides a pretty good snapshot of foreign investment patterns.

The office looks at all potential acquisitions by foreigners valued over $100 million or deemed to be on sensitive land (and those involving fishing quotas).

So it is the big stuff or the stuff we care about because the land has some cultural or historic value above and beyond its economic value.

It will come as no surprise to most people that Australia is still the biggest investor in these categories. In the past 12 months, Australian companies were involved in at least 40 of the 110 applications that the OIO processed. US companies were named in 33.

After that you have to work your way through the UK, Germany, Switzerland, Japan and Canada before you get to China.

Applications by firms from the Asian super power included the Crafar farms purchase and the Synlait dairy company, both of which got plenty of publicity. And the Gulf Harbour luxury golf course and residential development.

The remaining two were much smaller - a Hong Kong-based company bought land for a wind farm and another Chinese firm bought a residential development which was worth just $4 million but deemed to be on sensitive land.

So while the debate about foreign investment is entirely legitimate - especially with regards to land - we need to be extremely careful to debate the facts and not find ourselves unwittingly lured into a xenophobic bias. If you really want to get wound up about the great New Zealand sell-off then our old friends Australia and the US are the investing nations that warrant the most attention.

The reality is that New Zealand remains very much a blip on the Chinese investment radar - even more than five years into the high-profile free trade agreement between the two countries.

Staring at the raw stats it's hard not to come to the conclusion that China is woefully under-represented as an investor in New Zealand.

Taking into account its status as the world's second-largest economy, and one of the fastest growing, given its strategic interest in agricultural, energy resources and our special free trade relationship, you'd think the OIO would be run off its feet with applications from Chinese companies.

But Swiss investors have kept the bureaucrats busier in the past 12 months. In a list of potential foreign investors that also includes Denmark, Belgium, the Netherlands, Ireland, Norway and South Africa, China is punching well below its weight.

No doubt China has the economic capacity to leapfrog Australia and the US in its New Zealand investment activity if enough of its business people are interested.

Perhaps it is that potential that drives the concern about Chinese investment. But if it is simply fear of the potential then that's the same concern that's been bothering New Zealanders since the 1890s when Prime Minister Dick Seddon used the threat of "Yellow Peril" to drum up votes and introduced a poll tax on Chinese immigrants.

The difference is that we need to do business with China now - we don't have the guaranteed market access to the UK and Europe that we once had.

Culturally and economically we are increasingly turning towards Asia. Immigration is bringing to our cities a vibrant mix of Asian cultures. But we need to get smarter in our distinctions around the variety of Asian cultures and also the distinction between business entities owned or controlled by the Chinese state and private companies.

China itself can hardly be viewed as one country in a business sense.

And it isn't by the most savvy of the local exporters. Fonterra has been doing business up in China for decades, going back to the days of the NZ Dairy Board.

Its investment in the country, on any kind of per capita or GDP, is far greater than any Chinese firms here.

It is true that Fonterra can't buy land in China outright, but it is heavily embedded in the dairy industry. It has four offices with 400 staff and is a joint venture owner of five farms, which will soon have 15,000 cows producing 150 million litres of milk a year.

Which brings us back to just how remarkably small the number of investment applications has been from China in the past year.

Perhaps it is going to accelerate. In fact, you'd have to assume it will.

New Zealand is a premier food producer in a world where good quality food production gets ever more valuable. So we should be having a serious national debate about how much foreign investment we want or need. We should be prepared for increasing levels of interest from all over the world.

But whatever we decide, we should aim for a fair and consistent policy that doesn't deter quality long-term investors from providing the kind of capital we'll need to develop our ideas and technology.

And we should keep the fear of Chinese investment in perspective.