Ask your average Kiwi which country is currently dominating foreign investment into New Zealand, and their answer would probably be China.
But the reality shows quite a different picture, according to research undertaken by KPMG NZ.
KPMG has analysed trends in foreign direct investment through a review of the Overseas Investment Office (OIO) approvals over the period July 2010 to December 2012.
This research showed that Asia accounted for only 16% of gross foreign direct investment over the last two years. Australia remains our main single source of capital, at 46%. Combined, North America, Europe and Australia accounted for approximately 70% of investment.
And of the 16% which is Asian:
Among Asian countries, Japan (53%) was a bigger investor in New Zealand than China and Hong Kong (33%). Significant acquisitions made by Japan in the last two years included beverage companies Independent Liquor and Charlie’s.
So China is one third of 18% which is 6%.
The full report states:
The growth of Asia represents a great opportunity for NZ. However, in an economic sense kiwi’s need to realise that Asia is more important to NZ than NZ is to Asia. Given that Asia’s consumer market is about 3.8 billion people and NZ’s is about 4.4million, it is easy to see why.
Joint ventures, partnerships and other innovative arrangements with foreign investors should be considered as ways to commercialise Kiwi innovation and to gain access to overseas markets.
Some parties demonise foreign investment. They seem to view the economy as a closed shop, and promote a view that every dollar of foreign investment is somehow crowding out domestic investment. But it isn’t. Foreign investment helps the economy grow, and creates jobs and more investment opportunities locally.