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Debate this week has centred on whether China's Shangahi Pengxin should be allowed to buy Lochinver Station, or not.
AUT Professor of Public Policy Ian Shirley says it's time to for the government to take a leaf out of China's book and consider a third option: allowing foreign investors to lease land, but not buy it.
The academic also notes that the Chinese system puts a focus on land with strategic value, but says our Overseas Investment Office (OIO) does not have the policy expertise to make decisions about retaining strategic assets.
Suggesting that Chinese investment in New Zealand is essentially the same as New Zealand investment in China assumes that buying and owning land is the same as investing in or leasing land, Prof Shirley says.
Commenting on the proposed sale of Lochinver Station to the Chinese company Shanghai Pengxin, Professor Shirley says there has been a lot of heated political debate and a considerable amount of misleading information.
Responding to the New Zealand Herald editorial “We should welcome Chinese investment” he says recent research he has conducted in collaboration with the Chinese in Shanghai illustrated a radically different approach to overseas investment.
“The Chinese do not sell land to overseas interests – they lease land and they encourage overseas investment but only in strategic industries or areas of economic development that they nominate or control.
“In Shanghai for example Chinese colleagues were proud of the fact that the only land in Shanghai owned by overseas interests was the small block of land on which the Soviet Embassy stood. The Chinese do not sell strategic assets or land.”
Professor Shirley says that to suggest therefore that Fonterra “has been buying farms” in China assumes that the ownership and leasing of land is the same thing.
“You may be able to sell that line to some New Zealanders but for those of us who were raised on farms it represents a major distortion of the facts.”
Professor Shirley says the public debate suggests that the decision on the sale of strategic assets such as land should not be left to the Overseas Investment Office.
“As opinion polls over recent months have indicated a significant majority of New Zealanders do not agree with the sale of public assets. While the Prime Minister may “be happy for a Chinese company to buy Lochinver”, there is clearly a large number of New Zealand citizens who would oppose the sale.
“The Overseas Investment Office does not have the ability or the expertise to address policy decisions such as the retention of strategic assets or the sale of land to overseas investors despite changes to the overseas investment regime in 2010.
“China has ensured that it will retain its strategic assets including the domestic ownership of land. It encourages overseas investment in areas that it wants to develop rather than selling its assets to the highest bidder. Perhaps it is time to consider similar policies in New Zealand.”
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