Chinese President's visit highlights NZ investment opportunities

Chinese President Xi Jinping's visit to New Zealand last year has piqued Chinese investor interest in the country, particularly in the tourism sector, according to the new chief of the New Zealand China Trade Association (NZCTA).

Xi, accompanied by major media coverage, arrived for a short visit in November and signed a number of agreements on bilateral trade and investment, said newly elected NZCTA chairman Martin Thomson.

"His visit was hugely important to relationships, investment and reputation for New Zealand," said Thomson in an e-mail interview with Xinhua.

"It threw a light onto the country and highlighted opportunities. President Xi's speeches also emphasized these."

The arrival of Chinese tourists had undoubtedly also fueled investment into the sector, said Thomson, a partner of commercial law firm DLA Phillips Fox and head of its China practice.

"There are a number of four or five star hotels currently in development by Chinese organizations. As Chinese tourist growth continues, it is expected to see more such investments. New Zealand is welcoming these," said Thomson.

President Xi, during his visit, had unveiled the model of one new five-star hotel planned by a Beijing-based developer for Auckland.

Thomson also cited a major Auckland hotel and retail development proposed by Shanghai-based New Development Group as well as Shanghai Pengxin's purchase of the Hilton Hotel in the South Island ski resort of Queenstown.

Since the signing of the New Zealand-China Free Trade Agreement in 2008, China had risen to become New Zealand's top trading partner, and Xi and New Zealand Prime Minister John Key had agreed in November to set a goal to lift the value of two-way trade to 30 billion NZ dollars (22.3 billion U.S. dollars) by 2020.

The prospects of greater overall Chinese investment had also grown with the registration in New Zealand of three of China's four big state-owned banks since November 2013.

"Over 2015 and beyond, that investment in New Zealand is likely to increase," said Thomson.

"Furthermore, the more trade there is, the more investment there will be. China is a major trading partner of New Zealand, so you could expect investment to grow considerably."

Historically, Chinese investment into New Zealand had been wide across sectors, he said, giving the examples of Haier's purchase of iconic New Zealand whiteware maker Fisher & Paykel and telecoms giant Huawei's entry into the market.

Bright Dairy & Food Company, Yashili, Yili and Shanghai Pengxin had made major investments in New Zealand's pillar dairy sector, while Chinese firms were also investing in the meat processing industry and forestry.

There was also significant interest in the rebuilding of earthquake-battered Christchurch.

Thomson quoted a New Zealand government report last year that said New Zealand was "less connected with the rest of the world than other similarly developed countries."

It cited per capita inward direct investment as 18,533 U.S. dollars compared with the OECD (Organization for Economic Co- operation and Development) small-nation average of 40,509 U.S. dollars, and 26,638 U.S. dollars in neighboring Australia.

While some of the bigger Chinese investments had sparked political controversy over foreign ownership of productive assets, ultimately New Zealanders were fair minded and understood the reciprocity of investment between the two nations, he said.

New Zealand was also generally in a good economic position, despite headwinds caused by the high New Zealand dollar and global uncertainties.

"Chinese investors can still find in New Zealand a willing seller and trader. There is considerable room for foreign direct investment," said Thomson.