Controversy 'won't deter investment'

A Chinese business group says negative publicity around the bid by Shanghai Pengxin to buy a large farm near Taupo should not deter others from the country from investing in New Zealand.

The company's application to buy Lochinver Station has prompted intense political debate, with Labour Party leader David Cunliffe saying he would stop the sale if elected.

The China and New Zealand Business Council says the sale is a positive investment, which will strengthen economic ties between New Zealand and China.

Co-chair Lilly Shi said Chinese doing business in this country are used to negative publicity and will not be deterred.

Ms Shi conceded there may be some short-term nervousness among investors, but said New Zealand was still seen as a good long-term investment because of its political stability.

Shanghai Pengxin has signed a sale and purchase agreement for the station but the farm's purchase is still subject to approval by the Overseas Investment Office (OIO) and must then be signed off by two government ministers.

Mr Cunliffe said if his party was elected to lead in September and the sale had not yet been approved, Labour would block it unless there was solid evidence that overseas ownership would add substantial value to New Zealand, over and above what New Zealand ownership would give.

"We can't in this case think of what that would be. That's why, in a nutshell, we're saying no sale."

The Labour leader told Radio New Zealand's Morning Report programme he had not actually seen the OIO application, but was making his promise based on the facts that had been in the public arena.

"No I have not seen the application but I think the ability of a party leader to set out a clear policy is one that most New Zealanders would think is appropriate."

Australians exempt

Later, the Labour Party moved to clarify its plan to restrict land sales to foreigners, saying any changes would not affect Australians.

Mr Cunliffe noted that the trans-Tasman Closer Economic Relations agreement allows Australians to freely buy residential property, and Labour would extend that to commercial and rural land sales.

Prime Minister John Key said Labour Party leader was in a dangerous position, in that he was pre-judging the regulator's decision.

"The Government would almost certainly be open to legal action if they pre-judged the decision made by the Overseas Investment Office without knowing the facts."

The 13,8000-hectare station has been in the same hands for the past 54 years. Its sale advertisement said it operates as a profitable sheep and beef breeding and finishing station, supplemented with dairy grazing. The ad notes it has the potential for a range of farming systems, including dairying.