NZ row 'could put off Chinese'
Source: Agencies |
February 22, 2012, Wednesday
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Print Edition
Print Edition
CHINESE companies will be put off investing in New Zealand if a Shanghai-based investment group is not allowed to buy farms there after a court ordered that official approval of the sale should be reconsidered, the bidder said yesterday.
The investment group, Shanghai Pengxin, is the preferred bidder to buy 16 farms being sold by administrators for around NZ$200 million (US$166 million).
The sale was stymied after a court ruled last week that government ministers, who rubber-stamped a departmental recommendation, did not interpret rules about economic benefit of the deal correctly and should reconsider their decision.
The sale of rural and coastal land to foreign interests is a sensitive issue in New Zealand, where agriculture dominates the economy.
Shanghai Pengxin said other potential Chinese investors were watching the way the case was being treated.
"They will also be disappointed to see the level of anti-Chinese sentiment expressed in the recent months and the lengthy, expensive and uncertain approval process will be discouraging," spokesman Cedric Allan said in a statement.
A rival New Zealand consortium, whose lower bid was rejected, has said it still wants to buy the farms and keep them in New Zealand hands. The rejection of its bid initiated the legal challenge.
Market in China
Allan said that, in addition to buying and upgrading the farms, and training New Zealanders to work on them, the company would invest in a New Zealand processing plant and provide money to market the products in China.
The New Zealand government has said it will reconsider the economic benefits of the sale to the Chinese group, which means it could possibly reverse its approval.
"We are confident that they will rely on their own skills in evaluating the many economic and other benefits of the Pengxin bid, rather than the sweeping assertions offered by a phantom bidder," Allan said.
The farms have been on the market for two years after the original owner failed to repay bank loans.
A new recommendation from officials could be sent to ministers some time this week, but a final government decision may be some weeks away.
New Zealand is the only Western nation to have a free trade agreement with China, which is the country's second-biggest export customer behind Australia.
Foreign investors are free to invest in New Zealand urban property but need official approval for purchases of anything but small parcels of rural land.
The biggest buyers of New Zealand rural land in the past two years have been from the United States, Britain, Europe and Australia.
The investment group, Shanghai Pengxin, is the preferred bidder to buy 16 farms being sold by administrators for around NZ$200 million (US$166 million).
The sale was stymied after a court ruled last week that government ministers, who rubber-stamped a departmental recommendation, did not interpret rules about economic benefit of the deal correctly and should reconsider their decision.
The sale of rural and coastal land to foreign interests is a sensitive issue in New Zealand, where agriculture dominates the economy.
Shanghai Pengxin said other potential Chinese investors were watching the way the case was being treated.
"They will also be disappointed to see the level of anti-Chinese sentiment expressed in the recent months and the lengthy, expensive and uncertain approval process will be discouraging," spokesman Cedric Allan said in a statement.
A rival New Zealand consortium, whose lower bid was rejected, has said it still wants to buy the farms and keep them in New Zealand hands. The rejection of its bid initiated the legal challenge.
Market in China
Allan said that, in addition to buying and upgrading the farms, and training New Zealanders to work on them, the company would invest in a New Zealand processing plant and provide money to market the products in China.
The New Zealand government has said it will reconsider the economic benefits of the sale to the Chinese group, which means it could possibly reverse its approval.
"We are confident that they will rely on their own skills in evaluating the many economic and other benefits of the Pengxin bid, rather than the sweeping assertions offered by a phantom bidder," Allan said.
The farms have been on the market for two years after the original owner failed to repay bank loans.
A new recommendation from officials could be sent to ministers some time this week, but a final government decision may be some weeks away.
New Zealand is the only Western nation to have a free trade agreement with China, which is the country's second-biggest export customer behind Australia.
Foreign investors are free to invest in New Zealand urban property but need official approval for purchases of anything but small parcels of rural land.
The biggest buyers of New Zealand rural land in the past two years have been from the United States, Britain, Europe and Australia.
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