A Beijing-based economist with 30 years of experience doing business in Asia says New Zealand needs to ban corporate donations to political parties to avoid interference from foreign companies.

Rodney Jones of Wigram Capital Advisors made a submission to Parliament's justice committee today as part of its inquiry into the 2017 election.

The inquiry is a regular event after general elections but the focus of this one is the issue of foreign interference.

Jones gave the example of Chinese tech company Huawei.


"If you look at the way Huawei has been acting in New Zealand society in the last couple of months, in my view that is tipping over into interference. Running active campaigns that are not related so much to commercial objectives such as selling mobile phones ... but about establishing a political position," he told the committee.

"Huawei is a shadow. It's a ghost in commercial terms, looking as a financial analyst. There's no other company like Huawei, it's unique. We can call it a party-controlled enterprise."

"There's no detailed financial information. They have an annual report, very limited data. If we want to look at Ali Baba, if we want to look at Tencent, we can look at their annual reports, we can look at their reporting to the New York Stock Exchange, the Hong Kong Stock Exchange. With Huawei we have nothing.

"Sure, it sells a lot of phones, but it has this extra role. That's an example of the challenge we face," Jones said.

Foreign companies were able to set up companies in New Zealand, special purpose vehicles, which could donate up to $45,000 each election cycle without disclosure. New Zealand legislation was inadequate to cope with such challenges, he said.

To avoid such influence from foreign companies, corporate donations should be banned.

"Companies have always donated but this is a clear vulnerability by allowing corporates to participate in the political system via donations."

Jones said it was no coincidence that the rise of "money politics" occurred at the same time as increased policy timidity and there was a "marked reluctance" by either of New Zealand's major political parties to confront the long-term challenges.


"The challenge of a rising China is the selection of MPs based on their ability to raise funds from minority communities. The real issue is, the Chinese population is underrepresented in Cabinet, certainly underrepresented in Parliament.

"The Members from the Chinese community the party's chosen, are chosen for their fundraising capability and their connections back in Beijing. This is something that needs to change and by attacking the role of money in our political system, we will start to get Members from minority communities representing their communities," Jones said.

Huawei New Zealand Deputy Managing Director Andrew Bowater said Huawei has never made donations to any New Zealand political parties, and nor will it ever.

"So I'm perplexed as to why Huawei is supposedly an example of why foreign companies shouldn't be able to make political donations.

"Contrary to what Rodney Jones thinks, our New Zealand business is far greater than just selling phones, and we have a commercial imperative to help New Zealanders understand why Huawei should be included in the roll out of 5G in this country."

He said Huawei was unapologetic about opening itself up for questions and giving people the opportunity to get to know the company – "will continue to do this".

"Also it's worth noting that Huawei is a privately owned cooperative, owned by the staff of Huawei. So reference to Huawei being a 'party-controlled enterprise' are incorrect."