ODT on xenophobia

October 24th, 2012 at 10:00 am by David Farrar

An excellent editorial:

Recently, control of Fisher & Paykel Appliances, the company which maintains a presence in Dunedin, passed quickly and almost quietly into the hands of the Chinese-owned Haier Group. Haier already owned 20% of FPA after effectively rescuing the company in 2009, when it acquired the holding as part of a capital raising that let FPA refinance its debt. FPA got distribution into China as a result of the deal and the ability to further licence its technology.

David Parker has said he wants Ministers to decide on private owners selling their shares to other private owners. What this may mean is companies going bankrupt, as F&P may have gone under if Haier hadn’t rescued them in 2009. We saw this under the last Labour Govt when they refused Singapore Air buying Air NZ, leading to the airline facing bankruptcy.

While the semantics would suggest that 52% ownership means the company is still in Kiwi hands, the reality is that a controlling interest is just that: controlling. (Haier’s offer is still subject to Overseas Investment Office approval, but it seems a formality.)Compare then the ease with which Haier took control of a long-established New Zealand company with the prolonged struggle by Chinese company Shanghai Pengxin to buy 16 central North Island Crafar farms. It now hopes to settle the purchase of the farms after the Supreme Court last week removed the last obstacle to the deal, an appeal by Maori trusts.

While it would be easy for Haier, a global whiteware group, to shift FPA to China, it is impossible for Shanghai Pengxin to shift 16 dairy farms anywhere. It seems ruled in the farm debate. Why should the Chinese be allowed to buy New Zealand farms, the critics howled?

Exactly – you can’t move a farm or land. I’d point out that companies can move their manufacturing offshore also, regardless of who owns them.

And compare that reaction with the welcoming of recent news that Canadian film-maker James Cameron continues to expand his south Wairarapa property portfolio.

Incidentally, Mr Cameron’s neighbour, American billionaire Bill Foley, has won permission from the Overseas Investment Office to expand his Kiwi-based wine operation.

However, just like Haier, it is likely both Mr Cameron and Mr Foley paid market rates for their purchases. If the Maori trusts, and their benefactor Sir Michael Fay, had been truly serious about buying the Crafar farms, all they had to do was offer a higher price than that being offered by Shanghai Pengxin.

Xenophobia is not the determining factor in such sales: shareholders make their own decisions based on price and their own circumstances.

Not if Labour gets in. Their policy seems to be that Ministers will approve all sales that are not purely domestic. Decisions will be based on Ministerial opinion, not what is good for shareholders and investors.

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24 Responses to “ODT on xenophobia”

  1. Mighty_Kites (77 comments) says:

    I believe it was Cunliffe, not Parker

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  2. davidp (3,329 comments) says:

    We need to bring back the poll tax on Chinese people. That would stop them buying NZ land or NZ companies, or opening restaurants on Dominion Road.

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  3. kowtow (6,734 comments) says:

    Actually there is no xenophobia.

    Correctly it should be sinophobia,and specifically Commie Chinese we have a problem with,why the surprise or outrage. The People’s Republic is not a free open economy so we should be wary, indeed fearful.

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  4. Rich Prick (1,324 comments) says:

    I’m sure there was an element of xenophobia involved, but I think there is a bigger issue with politicians thinking they have carte blanche with private property rights.

    Government has no place in the sale and purchase of private property. If Labour wants a say in what I choose to do with my business, it can commit capital first and then have a say. Otherwise the Labour Party can just bugger off.

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  5. Redbaiter (6,483 comments) says:

    This xenophobia thing is a transparent artifice that will backfire. Same old left wing argument by ad hominem.

    Like the terms homophobia, sexism and racism it is designed to delegitimise those who have opposing views.

    “David Parker has said he wants Ministers to decide on private owners selling their shares to other private owners.”

    This would normally be valid criticism of Parker except that the buyers are not “private owners”, they are emissaries of the Chinese government, a government that is run by the Generals of the Chinese Army, is totalitarian not democratic, and keeps power by way of indoctrination and terror.

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  6. Agent BS (10 comments) says:

    Would have thought Redbaiter would be all for a ruling military junta. Go figure.

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  7. peterwn (2,941 comments) says:

    This is an aspect of ‘sovereign risk’ which business decisionmakers (including investors) have to take in account. A blunt example is ACC. Even if National wants to partially privatise it, insurance companies would be too scared stiff to participate since Labour would threaten to grab it off them if Labour returns to power. Commerce Commission tried to screw Vector’s profits down to a level unacceptable to investors, so Vector had to slash its capital works programme meaning less reliability and ultimately the inability to connect customers. So the more David Parker makes threats of this nature, the less inclined will investors to invest in New Zealand. Investment in NZ is necessary for job creation. I thought Labour wanted job creation.

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  8. emmess (1,334 comments) says:

    The People’s Republic is not a free open economy so we should be wary, indeed fearful.

    If that is the case, why would we want to copy them and also become a non free open economy?

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  9. hj (5,720 comments) says:

    Rich Prck says:

    Government has no place in the sale and purchase of private property. If Labour wants a say in what I choose to do with my business, it can commit capital first and then have a say. Otherwise the Labour Party can just bugger off.
    ….
    bullshit there is an economic value in being the member of a nation. If we are one big world community that is eroded.

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  10. lastmanstanding (1,154 comments) says:

    Dont forget the evil twins KLark and Kullen stole mine and other Auckland Airport shareholders property rights when they stopped us selling our shares.

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  11. hj (5,720 comments) says:

    David Farrar is banging the xenophobia drum again. The basic argument is that all ships rise through globalisation; the reality is that capital moves to where the supply of labour tends towards infinity.
    Note on your last post comments are 4 to 1 in favour of Shearer.
    http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10842053

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  12. Rich Prick (1,324 comments) says:

    Bugger off hj. If the Government want’s a say in my business it can commit capital like those that do have a say. Otherwise it can just bugger off. Take your “community” bullshit and shove it. That’s just code for rent-seekers to put their fingers in.

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  13. Redbaiter (6,483 comments) says:

    For those struggling with the different political concepts involved in this argument, I recommend this article by Denis Prager-

    Big business is not Conservative

    http://www.wnd.com/2012/10/big-business-is-not-conservative/

    For once I am with the Libertarians, and in particular, as it applies here, the Rand philosophy expressed so emphatically in the book “Atlas Shrugged” that evil is abroad when “businessmen” get into bed with big government.

    (Even though the true source of the ideas expressed in Atlas Shrugged is early American small government Conservatism. Something Rand did not fully understand due to her own Russian origins.)

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  14. hj (5,720 comments) says:

    Rich Prick

    I had land in mind Rich Prick. Nobody made land and yet “90% [of Rich Pricks] make their money from realestate.

    “Creating wealth, security and financial freedom is often an investor’s ultimate goal. 90% of millionaires get there by investing in real-estate
    New Zealand has strong population growth due to its progressive immigration policy and birth rates. Many parts of the country are experiencing housing shortages translating into strong tenant demand and price growth. This trend is expected to continue with recent population projections by the New Zealand Department of Statistics forecasting up to 64% growth over the next 17 years. Auckland city is predicted to almost double its population in the next 40 years. For property investors, this represents outstanding potential growth in demand and return on investment. New Zealand’s property prices are also relatively undervalued compared to its closest neighbour Australia.
    http://www.nzps.com/

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  15. Sam Buchanan (499 comments) says:

    “Like the terms homophobia, sexism and racism it is designed to delegitimise those who have opposing views.”

    Amazingly, I think I agree with Redbaiter.

    Seems to me that in recent years capitalists have taken on one of the worst characteristics of left social democrats -the tendency to try and turn political debate into attacks on one’s opponents’ psychology. If you are against free trade you get accused of ‘racism’, against foreign ownership you’re ‘xenophobic’, bothered about economic inequality and you’re accused of ‘envy’ etc.

    This is a deliberate policy of avoiding political debate by pretending issues aren’t political, just a matter of character defects.

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  16. kowtow (6,734 comments) says:

    sam buchanan

    I think it goes beyond “a deliberate policy of avoiding political debate by pretending issue’s aren’t political…..”

    There is a definite policy among “progressives” to literally shut down debate by criminalising it!This is done through various legal mechanisms but it has become a feature of the political scene and must be reversed.

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  17. backster (2,000 comments) says:

    David P. ” W e need to bring back the poll tax on Chinese people. That would stop them buying NZ land or NZ companies, or opening restaurants on Dominion Road.”

    But it might cause them to start digging ditches for gold again down South.

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  18. vto (1,128 comments) says:

    rich prick takes the prize for ignorant comment of the day

    “If [government] wants a say in what I choose to do with my business, it can commit capital first and then have a say.”

    sheesh

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  19. Pauleastbay (5,030 comments) says:

    Well said ‘ Rich Prick”.

    very similar to -if they want to tell me what to eat and drink – pay for my groceries

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  20. Paulus (2,304 comments) says:

    Labour and Greenpeace New Zealand Branch can say whatever they like in the hope that when throwing shit around some of it sticks.
    They do not have to actually justify anything they say (or do).

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  21. vto (1,128 comments) says:

    No, I have to amend my last comment above.

    Prize for ignorant comment of the day is shared equally between rich prick and pauleastbay…

    “very similar to -if they want to tell me what to eat and drink – pay for my groceries”

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  22. Pauleastbay (5,030 comments) says:

    Thanks VTO, its been a while since I won anything

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  23. wat dabney (3,472 comments) says:

    Speaking of xenophobia, the recent TSB adverts have been disgusting. “Not owned by Australians.”

    Fuck you TSB.

    Why not say “Not owned by Jews” as well? Or “Not owned by blacks.”

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  24. Jack5 (4,231 comments) says:

    The Otago Daily Times speaking as a free-marketer?

    Where was the newspaper when Otago local bodies shelled out millions in “incentives” to Fisher & Paykel to keep and enlarge their then manufacturing plant at Mosgiel?

    That led to nothing.

    On the same day, DPF posts from a Vietnam river boat about Chinese lifejackets being crap. What a reminder of the days when Fisher & Paykel was a world leader in whiteware technology, led by engineers. China’s low wages and low-interest loans that could only be provided by a totalitarian state have torpedoed whiteware manufacturing nearly everywhere outside Germany and the USA and a few corners such as Turkey. Sadly, when the China economic “miracle” stutters, it will be hard for other countries to rebuild their whiteware industries.

    DPF and those of similar opinions on China investment, folk like Maurice William-Sung, often imply, or even state, that opposition to the takeover of the Crafar farms can only be xenophobia.

    What about opposition to dealing with a communist state that doesn’t allow foreign ownership of its own land? The xenophobia argument also could be applied to the Soviet state under Stalin. The Western “useful idiots” of Stalin in that day similarly sneered at those who saw no evil in the Soviet Union.

    What about those who oppose the Crafar sale on the grounds to China that it is a further blow to family farming, which underpins NZ’s main export industries. Family farms survive down cycles, breed entrepeneurs and self-reliance. They also survive downturns better. Under company farming, these people are relegated to perpetual share-milking roles.

    What about those who oppose it because they feel this is at bottom a sell-out to China to save some of the skin of the foreign banks which incompetently lent and lent to Crafar leading up to the spectacular failure of these farms. It could be argued that NZ pays for these greedy fuckers’ misjudgments.

    What about those who wonder whether there may be good reasons for the concerns of other notable agricultural countries about CHina buying arable land. I’m thinking of Argentina and Brazil.

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