Thursday, August 07, 2014

China's NZ land policy

It must be a full-on barn-burner for John Key to have to call talk back radio hosts to try to put out the land sales fire.  The PM does not ring up to have a chat about education policy, or welfare initiatives, or the situation in Gaza - the PM rings up only in reaction to a crisis that can only be put out by the PM.  Have a word, sort it out, everyone back on script.

That was yesterday on Radio Live when Sean Plunket had evidently gone off the blue script due to the callers' overwhelming rejection of the foreign purchase of land.  Key's relaxed routine was pushed into pantomime and ended with his rising tone pitching higher and higher trying to allay the fears.  It was rather queer. Like the kid who thinks he's clever and duped the adults when everyone knows what he's done and the suspension of belief is because his punishment is being formulated.  

The best he could do was that if the amount of land sales was too much in the future he might limit it somehow, but in doing so he had conceded the point: something had to be done.  Key asked people to trust him on his judgement on what was too much and what was not enough.  But what answer would you expect from an international finance man who owns houses in Hawaii and so on.  

Peeling productive farmland off to Chinese front companies at 10,000 hectares a time so they can build their own various primary industry and extractive empires and cut NZ out of the equation is far beyond most people's tolerance threshold.

The PM is in a cleft stick.  Key is caught between where National's neo-liberal free trade ideology and National's conservative, bigoted, provincial base and public opinion sit - on the one prong - and the Chinese people, companies and government on the other.  

It is the China-NZ 'free' trade agreement that is casting the shadow over land sales - not the Treaty of Waitangi.  The Maori view that the land be vested back to the actual original owners - the Tangata Whenua - is not a question a Pakeha would usually entertain no matter how large it looms.  It is the concern that China will interpret NZ as having broken the FTA if land sales are prohibited.  It is a potential trade risk across all trade 'partners', but it is China that holds a FTA and high expectations of future investment and return from buying the land. 

Key can't move with populist reaction against foreign buyers without provoking diplomatic and commercial pressure from China.  There would be huge pressure internally from within the National caucus and Auckland membership to keep foreign buyers, because there would be huge pressure from their Chinese cash cows that they will close their wallets if their fellow Chinese were kept out of the property game.  The FTA was negotiated with the understanding these conditions would continue to prevail.

It is the state policy of China for their companies to buy land here - lots of it - and they have access to cheap Chinese state credit to do it.  The Chinese can afford to pay a premium to be the highest bidders - more than any NZ bidder could, or any other foreign buyer.  The Chinese are buying strategically and for the long-term.  They will start sending their people over to staff these facilities too - the Chinese insisted on labour and visa rights for their workers in the FTA.  Most people are 
aware of this general scenario that is unfolding and are opposed to it.

There is only so long a political leader can dismiss the concern.  It is clearly not in NZ interests to be run by absentee Chinese landlords.  You can hear the percentages falling off the Tories every day it is in the news - it is directly related to how high-pitched John Key's voice gets.  Pretty soon only dogs will be able to hear him.

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