NZ approves sale of dairy farms to Chinese
Source: Agencies |
January 28, 2012, Saturday
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Print Edition
Print Edition
CHINESE investors are buying New Zealand farmland for the first time as economic ties with the Asian powerhouse grow ever deeper.
New Zealand's government yesterday approved the sale of 16 dairy farms to a company controlled by Shanghai Pengxin Group, run by wealthy property developer Jiang Zhaobai. Pengxin hasn't revealed how much it is paying but says its total investment will be more than 200 million New Zealand dollars (US$164 million).
New Zealand Prime Minister John Key has defended the sale, pointing out that less than 1 percent of the country's farmland has been sold to foreign investors. The central North Island farms bought by Pengxin came up for sale after a bankruptcy and total about 7,900 hectares.
But nationalist voices have lined up against the sale, saying it will open the floodgates to foreign ownership. A consortium of local farmers and businessmen led by merchant banker Sir Michael Fay are taking legal action to try and stop or reverse the sale, which is due to close next week, in hopes they can buy the land themselves at a cheaper price. "Our New Zealand farmers will never be able to compete with the overseas guys with deep pockets," said consortium spokesman Alan McDonald. "The government has just declared open season on our farms."
Some commentators have suggested there is an element of xenophobia at play, after previous sales of New Zealand farmland to investors from the US and Germany went ahead without much debate.
However, the prospects for New Zealand's economy and the prosperity of its 4.4 million people are increasingly tied to China. In 2008, the two countries signed a free-trade agreement, the first such agreement China signed with a developed nation. China has overtaken the US to become New Zealand's second-largest export market, behind only Australia, and by far its largest buyer of dairy products -- a commodity that makes up a fifth of New Zealand's export earnings. More Chinese tourists are also visiting New Zealand.
In New Zealand, rural land can be sold to overseas investors only with approval from a government agency which attempts to determine whether those investors are of good character and that their investment will benefit New Zealanders.
Pengxin had agreed to certain conditions, such as having its milk products processed by a New Zealand-owned company. Pengxin spokesman Cedric Allan said some Chinese are wary of consuming their own dairy products after the 2008 melamine scandal.
New Zealand's government yesterday approved the sale of 16 dairy farms to a company controlled by Shanghai Pengxin Group, run by wealthy property developer Jiang Zhaobai. Pengxin hasn't revealed how much it is paying but says its total investment will be more than 200 million New Zealand dollars (US$164 million).
New Zealand Prime Minister John Key has defended the sale, pointing out that less than 1 percent of the country's farmland has been sold to foreign investors. The central North Island farms bought by Pengxin came up for sale after a bankruptcy and total about 7,900 hectares.
But nationalist voices have lined up against the sale, saying it will open the floodgates to foreign ownership. A consortium of local farmers and businessmen led by merchant banker Sir Michael Fay are taking legal action to try and stop or reverse the sale, which is due to close next week, in hopes they can buy the land themselves at a cheaper price. "Our New Zealand farmers will never be able to compete with the overseas guys with deep pockets," said consortium spokesman Alan McDonald. "The government has just declared open season on our farms."
Some commentators have suggested there is an element of xenophobia at play, after previous sales of New Zealand farmland to investors from the US and Germany went ahead without much debate.
However, the prospects for New Zealand's economy and the prosperity of its 4.4 million people are increasingly tied to China. In 2008, the two countries signed a free-trade agreement, the first such agreement China signed with a developed nation. China has overtaken the US to become New Zealand's second-largest export market, behind only Australia, and by far its largest buyer of dairy products -- a commodity that makes up a fifth of New Zealand's export earnings. More Chinese tourists are also visiting New Zealand.
In New Zealand, rural land can be sold to overseas investors only with approval from a government agency which attempts to determine whether those investors are of good character and that their investment will benefit New Zealanders.
Pengxin had agreed to certain conditions, such as having its milk products processed by a New Zealand-owned company. Pengxin spokesman Cedric Allan said some Chinese are wary of consuming their own dairy products after the 2008 melamine scandal.
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