Fear of outsiders is apparently a natural response.
But New Zealanders have been tolerant of foreign investment here for a long time. It came when we were a colony, and the benefits have long been obvious.
Most people seem to understand we could not have our standard of living and local services without it.
We need outside capital to build our base infrastructure. We need the skills, technology, and funding to build an economy that can compete in a globalised world.
One quick look at closed economies around the world is an instant validation for accepting foreign investment.
But that does not ease the fears. They are under the radar (except for a vocal strident minority) unless the foreigners bring their resources and ownership with a 'foreign culture', and then they bubble more vigorously. We even have a political party that trades on these fears.
Since 2001 when our total capital stock was NZ$326 bln and foreigners owned NZ$172 bln, foreign investment in New Zealand has surged by +$214 bln to an impressive $386 bln.
The absolute dollar amount of this high growth, by itself, is a worry for some. And it is a growth from when it represented 52.9% of all the country's assets.
Since then we have seen the rise of China and their aggressive acquisitiveness. They are 'buying up everything', or so it might seem.
But it is really true? All this needs to be put in the context of the overall growth of our economy and our overall capital stock.
The facts are far less worrisome.
Here is the data:
|$ bln||$ bln|
|the increase 2001 to 2016||+213,881||+398,795|
This data is drawn from Statistics NZ National Accounts series. See SNE055AA and IIP085AA. They are published for all years ended March, and will be updated next in June this year for the year to March 2017.
This table can also be used to see the relative changes, like this:
|$ bln||%||$ bln|
It reached its peak in 2009 at 53.4%.
The variances are not great, ranging +/-2% over a 15 year period, with the peak in the middle.
But there is more to this than just foreign investment in New Zealand; our investors are also active offshore. And the same data shows a steady rise.
New Zealand investment offshore is now at its highest level ever, as a proportion of our total local capital stock, at 31.4%.
At 31.4%, this is no doubt boosted and growing because of KiwiSaver. Our savings can't find marketable securities or funds locally. Our bond market is not rising fast enough to satisfy demand and our equity markets similarly cannot support the demands of funds managers. Buying companies outright, a strategy of overseas corporates, does not fit the mandates of fund managers, and does not have the marketable liquidity they need.
The bottom lines are these:
1. foreign ownership of New Zealand's economic resources is not growing; it is stable and has been at this level for at least 15 years, and probably a lot longer.
2. New Zealand ownership of offshore assets are at record levels.
Those who have a conclusion and are looking for 'evidence' to support that won't find it in the data. They will need to rely on selective anecdotes, and will find them in the churn. It is election year after all so the hunt is on for anecdotes to build the necessary anxiety of like-minded voters.
We will get an update of this data on June 14, and we will update this review after that.
And if we are going to debate 'foreign ownership' we should start knowing that the current levels have been stable for at least 15 years. There is no growth (except by us).