By Jenée Tibshraeny
An Asian business expert says New Zealand businesses are missing opportunities to capitalise on the Asian dollars flooding into the country through migrants and tourists.
The BNZ Chair in Business in Asia at Victoria University, Professor Siah Hwee Ang, says kiwi business owners haven’t cottoned on to the pace at which the composition of our market is changing.
A quarter of the 3.173 million visitors who came to New Zealand over the last year were from an Asian country – 26% more than the previous year.
Rather than New Zealanders, Ang says it’s the Asian business owners catering to the demands, tastes and spending patterns of those visiting or migrating here from Asia. He says a wander through the souvenir shops around Queen Street is good evidence of this.
“The first thing they [new migrants] want is to find something they’re familiar with. And I think the market is well exploited by Asian entrepreneurs here, but less so of New Zealand organisations,” he says.
Ang says it’s a wasted opportunity, especially given Asian tourists don’t spend nearly as much in New Zealand as they do in the US and Canada.
“They literally don’t spend enough money here,” he says.
He maintains New Zealand should be capturing more of these Asian dollars, rather than letting them filter back overseas through Asian business owners here.
Asian graduates: an under-utilised resource
He suggests business owners employ more Asians who have graduated from New Zealand universities.
While the number of international students in New Zealand is soaring, Ang believes many of them are struggling to find jobs once they graduate.
He notes they’re essentially a free resource, in the sense they can teach business owners about the demands of fellow migrants and tourists, without firms having to spend money going overseas to do the market research themselves.
“I’m not promoting that we should let them all stay, but I think there are certain kinds of bonds and linkages that can be made before they actually eventually leave the country,” Ang says.
He recognises kiwis may be of the mind that these graduates don’t share the same culture – yet he says it’s their differences that are so valuable.
Furthermore he adds, “I suspect we still have enough Kiwi youngsters who have some exposure to Asian cultures. If they are Asian savvy, they are actually good for that business.”
Ang recognises a number of the big corporates and financial institutions in New Zealand are already tapping into the migrant market, with teams of staff dedicated to marketing their products to Asians through speaking the same language and using Chinese social media platforms for example.
“There’s only so many restrictions they can impose”
Talking specifically about Chinese migrants and tourists, Ang doesn’t see the Chinese government going much further in its efforts to put further legislation in place to prevent people from taking their money out of China.
“There’s only so many restrictions they can impose,” he says.
If China wants to assert itself as the global economic power, he says it can’t completely prevent people from taking their money out of the country.
Accordingly, we can assume China’s capital controls won’t prevent the Chinese from buying property in New Zealand, any more than they currently are.
Ang admits China’s regulations are confusing and it will take some time for the bumps in the way they’re implemented to be ironed out.
“Some of these kinds of investments will be looked at on a case-by-case basis, and over time when you have enough cases, then you can have a better system I hope,” he says.
Mum and dad savers, not big corporates, the target of Chinese capital controls
Taking things back a step, Ang explains there are two groups of Chinese keen to take their money overseas – savers with money to spend and organisations that want to investment abroad.
He says the government’s cracking down on the savers, as it wants them to unleash the US$28 trillion they’re hoarding in banks in China – not overseas.
China is moving from a manufacturing to a consumption based economy. Yet a consumption based economy only exists on the assumption people will spend.
Ang says most of China’s savings are residing with the older generation – the kinds of people looking to invest in property for their children overseas.
On the contrary, he says the Chinese government is encouraging organisations to take their money out of China, if it means they’re extending China’s reach throughout the world.
“A lot of them, who are actually overseas, are actually well supported by the government, and they are government related or government linked companies,” he says.
He says foreign acquisitions and investments are “highly encouraged in China, because as China tries to push itself to the global stage, what it actually needs is a global presence.
“It’s a way for China to build its image globally.”
Ang says the Chinese government is even happy to lend to these “Chinese multinationals”.
“That’s why you see bigger and bigger foreign acquisitions world-wide.”
Ang refers to China’s state-owned company, ChemChina, last month making a US$43 billion cash bid to acquire the Swiss seeds and pesticides group, Syngenta.