an end to the saga?

April 21st, 2012

Could it be? Has the Shanghai Pengxin/Crafar Farms saga finally come to an end?

Netease has a report so balanced and fair it’s boring reporting the NZ government’s approval of the sale of the Crafar farms to Shanghai Pengxin. No mention of any kerfuffle or controversy. No mention of Michael Fay and his nonsense, nor of the blatantly sinophobic kneejerk of the Greens, nor the populist-spiced-with-xenophobia ranting of Labour or New Zealand First. Simply, the government approved the sale to Shanghai Pengxin and the conditions of the sale.

Then the NZ Herald has a piece by Claire Trevett with what seems to be a rather silly headline. Papers show Crafar pressure. Oh, really? Because it seems to me the only evidence of such pressure offered is:

Mr McCully also provided Mr Williamson with a NZ Trade and Enterprise paper from March which advised the Government China was watching the case with “great interest” and it was affecting Chinese perceptions of the attractiveness of investing in New Zealand.

It said the Chinese Minister of Commerce had raised that point with Trade Minister Tim Groser on a visit to China.

It urged ministers to use high-level engagements with the Chinese to emphasise that New Zealand was open to investment.

Um… so… pressure? Where? It is the job of the Chinese government to, among other things, ensure, so far as possible, that Chinese companies get a fair go overseas. China and New Zealand have a Free Trade Agreement under which both parties made certain promises to each other. It is only natural for China to keep an eye on Chinese investment in New Zealand and ensure that the terms of the FTA are being adhered to and that Chinese companies investing in New Zealand are treated fairly and equally according to New Zealand law and are not susceptible to the whims of politicians and activists. One would hope that Tim Groser made similar noises about the treatment of New Zealand investors in China when he was here – but we wouldn’t know, would we? Because it seems the only people who noticed his visit and that he had anything to say, let alone reported on it, were in the Chinese-language media, and they have different priorities from the NZ media. And the Chinese media have noticed the Shanghai Pengxin/Crafar Farms saga and the controversy it aroused, and they have also noticed that Groser was very welcoming and encouraging of Chinese investment in New Zealand.

I suppose one could counter that foreign investors in China face a fair bit of less than fair or equal treatment or find themselves buffetted by unpredictable political winds, but so what? Rendering New Zealand’s FDI regime unfair, capricious and opaque, especially when it comes to Chinese investment, will not help to improve things in China. Quite the opposite. What goes around comes around. If New Zealand starts screwing around in its trade with China, then Kiwis in China can expect to be screwed around.

The rest of what Trevett reports seems perfectly reasonable to me, so much so that I find myself wondering if she is actually writing about New Zealand politicians. New Zealand does need foreign investment. To attract FDI, potential investors do need to be confident that the FDI regime is fair and transparent.

Then John Armstrong says Maurice Williamson was right to release documents regarding the sale, but again talks about pressure where all I can see is people being reasonable. China needs to ensure Chinese companies get a fair go, New Zealand needs to attract foreign investment.

And not for the first time in this long, drawn-out affair I find myself agreeing with Fran O’Sullivan. New Zealand’s foreign investment regime needs a thorough going over and sorting out. After all, as O’Sullivan writes:

Inside word is that some investors – including Hong Kong business magnate Li Ka-shing, who walked away from a multimillion-dollar bid for Powerco rather than jump through the OIO’s absurd hoops – now view New Zealand as “too hard”.

This is not the kind of reputation such a capital-starved country needs.

Li’s “no-confidence vote” will not surprise any of the Kiwi lawyers, accountants or bankers who have been tearing their hair out trying to explain to overseas investors why New Zealand’s foreign investment regime is now decidedly opaque.

Trying to convince clients to dress up their bids to meet the new OIO test set by Justice Miller’s judgment on the Crafar farms decision has proved difficult. The problem is major business assets on “sensitive land” are also caught by the Miller ruling, not just farmland.

Pity about the weak and silly pun she concludes with, though. But she’s right, the system is broke, and further messed up by Justice Miller, and it clearly needs some serious fixing.

And in other China-New Zealand news: the New Zealand immigration minister Nathan Guy is in Guangzhou visiting Liang Weifa, head of Public Security in Guangdong, and National Party president Peter Goodfellow is also in Guangzhou, but meeting Wang Yang, Guangdong provincial Party secretary. There’s not much remarkable about either article that I can see, the usual happy words about friendship, cooperation, and developing closer relationships. But all of this has me wondering: Could I be seeing the government leading New Zealand in a new direction before ordinary people have gotten on board? People generally fear change, and New Zealand does have a history of anti-Asian and specifically anti-Chinese sentiment, and there was that Cold War, whose clammy legacy still lingers, and perhaps the government is taking things a bit further than a lot of ordinary Kiwis are quite ready for? I dunno, just a thot….


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