By Pattrick Smellie
Chinese investment in New Zealand is tiny compared to Australia and needs to grow “to levels that reflect the growing commercial relationship with China,” the government says in its NZ Inc strategy for engagement with the world’s fastest-growing superpower.
Investment into China by New Zealand firms is also minuscule, at $541 million, compared with $36 billion of Australian investments in China, partly because of New Zealand’s wider track record of exporting commodities for others to process rather than investing in its own high-value production.
Part of the problem, the strategy says, is that “Chinese investors are unaware of New Zealand opportunities”, with resources to improve two-way understanding of commercial opportunities to be beefed up by, among other moves, establishment of a high-level New Zealand China Council.
The relatively small size of investment opportunities in New Zealand was also a factor in limited Chinese inward investment, as well as the strict controls that apply to Chinese companies seeking to invest outside the Chinese mainland.
New Zealand firms’ inexperience of Chinese markets was a major reason there was not more investment flowing from this country into China.
While China invested approximately US$60 billion globally in 2010/11, Chinese-owned assets in New Zealand amount to only NZ$1.87 billion in total, compared with $100 billion invested by China in Australia.
The strategy says “New Zealand would benefit from increased foreign direct investment from China and outward direct investment into China”, but avoids overt comment on farmland sales or other politically contentious issues that are understood to have delayed the strategy’s release by anything up to a year.
On the trade front, the strategy seeks to build on the 152 percent growth in New Zealand exports to China since the free trade agreement negotiated in 2008 kicked in.
The strategy sets a new three year goal of doubling two-way trade in goods with China from $12.7 billion at present to more than $20 billion by 2015, with government targeting of 50 fast-growing, profitable New Zealand companies in China, priority for sectors with high growth potential, and by growing the base of “China-ready exporters.”
While the strategy promotes more New Zealanders learning the Chinese language, Prime Minister John Key indicated after the launch that this was not so far a priority of government education policy.
Also targeted is 20 percent growth in the booming market for Chinese students to study in New Zealand, and a 60 percent increase in tourism by 2015. Other service industries with potential were identified as architecture, consulting, IT, environment, and food safety services.
The education target will be assisted by investigating mutual recognition of professional qualifications and extending the number of New Zealand private training enterprises listed by the Chinese Ministry of Educations “Study Abroad” website.
A further leg of the strategy targets greater collaboration in scientific research and development.
One of the strategy’s main recommendations is that New Zealand needs unified branding in China, where belief in the country’s safety, beauty, and purity was widespread, but individual firms were unknown.
“What we can and should do is market NZ Inc as an umbrella brand…for all New Zealand products and services in the first instance and then individual brands to be covered by this big umbrella,” Michael Gan, chairman of Sino-Kiwi firm Richina told some 200 invited guests at the strategy launch on Auckland’s waterfront.
A Uniliver board member, Gan said the multi-national company had adopted this single brand approach to good effect in China “because of unique challenges and opportunities China demanded.”
“The results are spectacular. New Zealand should do the same thing.”
The strategy document says work is under way now to create unified NZ Inc branding that preserves value in other existing country and firm-level branding.
The strategy also targets opportunities for Maori business, with a push on to establish a beach-head for such opportunities in the south-western Chinese province of Guizhou.
(BusinessDesk)
Updated with the sub headline corrected from $20 million to $20 billion
12 Comments
Meanwhile in Court the Crafar deal looks sicker by the brief....it was always a case of making sure the banks got back all of the credit they created....to inflate the rural bubble...
The problem with Chinese investment is the Beijing baggage that comes with it and the absolute certainty that the profits will depart for China...minimal taxes will be paid...a bit like the ongoing parasitic activity of the aussie banks and other overseas banks allowed, indeed encouraged to create and sell credit into the nz economy.
I have no doubt Key and English will charge ahead wallowing in their belief that all things capital regardless of origin can only be good for ....good for what?......oh good for making sure the inflated rural land prices remain in bubble format...Nothing else matters...rural schools will be closed....building activity killed off with stupid GST theft...families told to go to Auckland....or bugger off to aus.
The voting public are waking up to the reasons why National were tossed out back at the end of the last century...the bums are back to behaving as they did in the 90s.
Shearer is now looking a certainty for 014.
I think you are right.....I'd like to see the full story, ie behind the scenes, but I/we never will......pity I bet it would be a fasinating read/view.
In a way I cant blame the Govn for worrying about the bubble in ALL property....you can see the carnage in the US....even the UK looks unwell.....
Givn the banks leverage ratio any decent % loss means a real risk of insovency and bankruptcy.....and you and I will pick up the bill.
The chinese must be laughing....
I dont think JK and BE think its good myself......they must see the risk it now poses to NZ and their govn.....
The GST hike was purely incompetent and they knew thast Im sure.....it was a tax break for the rich.....nothing less....nothing more.
regards
Sherer will be one to watch, he appears to be able to see or at least admit the issues and by '14 they should be very obvious......I think Goff was in denial...the Q is, IF he can survive......so many vested interests in the party wolly....both against what needs to be done and those wanting focus elsewhere.....
Green's % will I suspect drop.....back to 7~8% I think.....
regards
NZ whores itself out to the world, seeking a quick buck, so it can run off to the crack dealer for another hit of extend and pretend. Little realising that youth and good looks are fleeting, who will want us when we are older sagging and full of Coorporate STD's? Reality will only set in once we are destitute, and unwanted, but that is a problem for the next generation.
"The Government is building a new embassy in Beijing to house a major boost to New Zealand's representation in the Chinese capital." herald
It will be funded by selling govt bonds...to a bank in Europe receiving an ECB 1% handout of freshly created credit...backed up by Timmy the Rat and Ben the printer in Washinton...The Building will be errected by Chinese labour and include the latest Chinese listening devices inside the walls floors ceilings toilets basins fittings wiring glass and steel structure...
When a bunch of people from the government/ authority earn $ 300’000.- plus - they don’t feel or experience something is changed in their daily life’s and therefore make these megalomaniac decisions – wasting billions for a long time “thriving” the country into insolvency.
They only wake up: “Ohh - this is another world out there” – when angry protestors hit them with a stick.
and a 60 percent increase in tourism by 2015
...........
Chinese drivers diving Chinese in Chinese owned busses: note the bus parks out side the Steamer Wharf at Queenstown around 6 ocklock. Drivers employed as subcontractors not having to register for gst untill (if) they earn $35,000.
Oh Goody!
Harcourts International continues with its expansion throughout China
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