Foreign direct investment in New Zealand now exceeds $100 bln, but as a share of all business investment is now only 5.9%, its lowest in at least six years

Foreign direct investment in New Zealand now exceeds $100 bln, but as a share of all business investment is now only 5.9%, its lowest in at least six years

As the election debates heat up, some attention will be paid to the old chestnut of foreign ownership.

This review is intended to update the issue with the basic background facts.

The OECD has recently released updated details of foreign direct investment flows for 2016 and the resulting foreign direct investment positions. New Zealand data is included in that review.

The OECD data is all in USD terms, but can be restated in NZD terms using RBNZ-published average exchange rates.

This is what it shows:

Basically, foreign direct investment in New Zealand continues to grow in absolute terms and in 2016 exceeded NZ$100 bln for the first time.

(In USD terms, the 2016 values rose, but were still below the 2012 levels.)

As a percent of the national balance sheet, these levels are still very low.

We sourced the total business enterprise asset levels from the annual national balance sheets prepared by Statistics NZ, although we have had to estimate the 2016 data because it is not yet released. The same data source gives the total national balance sheet asset levels, including businesses, households and government.

Recent strong growth in both overall business enterprise assets, and the national economy reveals that foreign direct investment actually holds a lower share now than in the recent past.

Jingoistic views that "we are selling off New Zealand" and losing control of our economic base to foreigners seems wide of the mark.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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7 Comments

More evidence of New Zealand's fundamentally flawed business model designed to run a current account deficit. The good people of New Zealand are the shareholders in NZ Inc and yet our dear leaders choose to run the country like a junior miner, with yearly capital raisings that dilute shareholder equity. Why do we not run a surplus instead, we have the products and the customers to do so easily?

The cost of which will rise according to independent others. Read more

It is interesting, but Stephen Joyce is presumably able to understand this. There comes a time when a startup ceases to be a dependent teenager spending its shareholders money and becomes an independent adult earning its own way in the world. NZ seems to have got stuck at 19.

Despite official denials of complicity, this goes to show that you can get as much depreciation of your currency – internal and external – as you are willing to pay for and that, so far, the PBOC has indeed been all too willing. Read more

Is NZ any different?

“One bank that holds no dollars gets another bank that holds no dollars to guarantee everyone has dollars.” Read more

Don't just think the NZ govt is delusional Take a look at the UK the USA and if ever there was a lack of clarity China
Then look at Italy Portugal Spain and tell me any of these countries governments have grown up and faced the reality
they all are never going to be able to pay back debt.
NZ will always be the child not even a teenager

I like when DC does the numbers. But this one is like the Nats telling us that only 4-% of NZ house purchases are foreign. Which is also what NZ tells the authors of this report.

So I am Jingoistic. LOL. Perhaps DC better go read the definition of Jingo. I have never said we should crank up the aging hercules, to do a world tour dropping barrel bombs on world financial capitals.