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New Zealand's investment network to lure more Chinese investors

English.news.cn   2012-11-26 15:41:00            

WELLINGTON, Nov. 26 (Xinhua) -- "Build trust," that's the simple message from New Zealand's first Chinese angel investment network as it ends its first year by trying to attract more Chinese investors into New Zealand.

The Chinese Ice Angels, which was formed under Auckland University's Icehouse business incubator at the beginning of this year, has already attracted about 20 Chinese investors in new businesses in the country.

But while the deals might seem slow in coming, organizers say building trust and familiarity is essential in any successful investment.

"We have three or four New Zealand companies that have got growth aspirations, preferably with Chinese export aspirations as well," Chinese Ice Angels project manager Brent Ogilvie told Xinhua in a phone interview. "There's a lot of investment capital and market potential."

Aside from New Zealand's major industries such as food and beverage and agriculture, Chinese investors are also interested in new industries, including software, health technologies, electronics and clean technologies.

"We've been very keen to work with the Chinese in New Zealand not only to leverage the investment that we're making but also to access their connections in China," Ogilvie said.

The network has also secured sponsorship from a major bank, the BNZ, and the country's biggest city with support from the Auckland Council on Tourism, Events and Economic Development, which is keen to see its increasing Chinese population play a greater role in the city's economic life.

However, the network's first year has also seen national debate over the sale of productive assets to foreigners as exemplified by the long and bitter court battle over a bid by China's Shanghai Pengxin Group to buy 16 North Island dairy farms.

The national debate was renewed with Chinese white-ware giant Haier's takeover of New Zealand's iconic Fisher & Paykel Appliances earlier this month.

The New Zealand government has expressed frustration at the slow pace of investment between the two countries despite New Zealand being the first developed nation to sign a free trade agreement with China in 2008 and the launching in February this year of a China trade strategy to double two-way trade from 10 billion to 20 billion NZ dollars (8.23 billion to 16.46 billion U. S. dollars) by 2015.

In August, Deputy Prime Minister Bill English told a conference co-hosted in Wellington by Victoria University and Peking University's School of Government that fears of foreign ownership were frequently overstated, adding that New Zealand had one of the most restrictive overseas investment regimes in the Organization for Economic Cooperation and Development (OECD).

Investments between New Zealand and China remained small even after the two countries marked their 40 years of diplomatic ties this year.

"New Zealand's future growth depends on access to capital, knowledge and skills, and China's size and its enormous growth potential means it will be the largest--and likely the fastest growing--market for New Zealand exports," English said.

China was New Zealand's 11th largest investor, with investments totaling 1.8 billion NZ dollars (1.48 billion U.S. dollars) in 2011, and foreign direct investments (FDIs) from China was about half that figure, he said.

By comparison, New Zealand had 52 billion New Zealand dollars of FDI from Australia and 11 billion NZ dollars from the United States.

Prime Minister John Key raised the same concerns a month later at an event marking the 40th anniversary of diplomatic relations between the two countries, noting that China was also investing in New Zealand government bonds, contributing to record low borrowing rates in New Zealand.

Given the controversies surrounding its investments in the past year, many Chinese investors are now keeping a low profile, investment facilitator and Chinese Ice Angels volunteer Kenneth Leong told Xinhua.

He had three pieces of advice for Chinese investors in New Zealand: build trust first, understand New Zealand's "rules of engagement" in business, and rely on advisors with experience in the market.

Likewise, New Zealand businessmen should learn at least "a little bit of Mandarin" and something about Chinese culture to demonstrate "that you're trying hard and you're genuine."

"It takes time to build trust and to actually have understanding both ways understanding what each side wants," Leong said. "I would envisage that it would take a while for there to be traction."

Leong said that what is lacking is a more formal network so investors can look at specific businesses wanting to raise money. "Chinese investors don't necessarily know where to go to find those opportunities," Leong added.

But beyond the business benefits, Leong and Ogilvie see far- reaching social and international effects from Chinese investment in New Zealand.

Ogilvie said the concept of Chinese Ice Angels was formed when he failed to see Asian faces in the business community and this is obvious on Auckland streets.

"If you look around the investment meetings, it's almost a totally Caucasian crowd," said Ogilvie, adding that Chinese investors often see business as an entry into the wider community.

Leong agrees: "Chinese investment is good for the country and good for social cohesion. The Chinese in New Zealand want to get involved, but often they don't know how."

Editor: znz
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