North shown way to China

Whangarei leaders who gathered this week to ask consultants about doing business with China, particularly around the proposed Marsden City, were given a direct message.

In bullet-point summary, Lilly Shi (born in China, educated in China, Hong Kong and New Zealand, degrees in finance, accounting and law, already recognised by the Beijing Government as a young high-flier to keep an eye on) and Matt Hanna (Master of Laws in intellectual property in agriculture, partner in Cambridge-based law firm Lewis, which acts for Chinese property developers) said:

It's almost not possible to do too much homework. You are dealing with people who do their homework to the nth degree. Always respect that. Never think you can pull the wool over the eyes of prospective investors.

Identify Whangarei's competitive strengths and be imaginative. Part of this is building a deep knowledge of what potential investors might be looking for - for themselves; their children; their futures; their holidays; the leisure activities which we take for granted but which are out of reach for most Chinese; the technology some of their developing industries need that we can supply.

Work co-operatively. Chinese people are good at working in a co-operative way in their society and place great emphasis on building and maintaining relationships, and building trust with contacts in all areas of life, including business associates. Time and patience were allowed to develop the concept, called guan-xi (which translates as gate-linkage). Chinese were prepared to take the long view on investments if the road map was well-prepared.

Even with preparatory work completed, penetrating the Chinese market will be difficult if not impossible without the right "buffer" (intermediary). The buffer will want to get a comprehensive understanding of your business/project at all levels and a feel for what your personality is like, and will expect the relationship to be long-term, close and trusting. Without a buffer, it is easy to get on the wrong track.

Projects being introduced to China had to match the country's five-year plans. Proposals had to be submitted to the Chinese Government. If they didn't match the five-year plans it could take a long time for a project to be introduced. Among criteria were increasing productivity and adherence to quality.

Countries with good schools were a big attraction. With one-child families the norm, parents were looking for the best for the child and were prepared to settle and invest in an integrated, stable, dynamic economy while the children were being educated and beyond that time when they were finding their ways into jobs, but the idea was usually for people to bring back the skills they had acquired overseas to raise the skill level of everyone.

Some areas of southern China were looking for marine-industry expertise, an area in which Northland could well build a niche market if the sector worked co-operatively and planned well. Agriculture was another possibility, with millions of people in cities looking to have access to better food. An area such as Northland had to be promoted as an entity, with all businesses working in support of each other in preparing the pitch. Small businesses working alone would not attract investment.

It has been said: "Most people in China strive to be better and do better every day." This is worth keeping in mind.

New Zealand has a pristine environment. The real question is how to translate this into a competitive advantage. Stiff competition exists from economies on the eastern seaboard of Australia and the growing Indonesian economy. But Northland's close proximity to natural resources could be translated into experiences that most Chinese had no access to, possibly quite simple experiences but totally novel to people who did not live out in their environment as New Zealanders did. Think picking fruit, catching fish, farm stays (already popular) - basic stuff.

Possible strategies for Marsden City - low interest zones, rate relief, tax relief, rent-free land use for a time.

New Zealand doesn't have cheap labour but we do have something unique, namely a free trade agreement with China, which means our dairy products go into China free of tariffs. This is a huge advantage.

A great opportunity existed to turn the Marsden City site into "something special".

Xenophobia (fear of things strange, different and foreign), seen in New Zealand in some quarters in relation to Chinese investment, is misplaced. If you, as a New Zealander, wanted to buy land in China, and everyone got behind a court case to stop the process, you wouldn't feel at all comfortable there. How do you think Chinese feel? Some events in New Zealand have had very negative impact.