Asian Foreign Investment

  • Don McKinnon
Foreign Affairs

Asian investors were encouraged to invest in New Zealand this morning when Foreign Minister Don McKinnon opened the Second Conference Asia in Auckland.

Speaking to the Conference Mr McKinnon pointed out the value of the ten leading Asian economies imports is now larger than Europes and only slightly below that of the United States.

New Zealanders are part of this, he noted.

Our exports to Asia have risen 62% since 1990 and our sales to the titanic trio - China, Hong Kong and Taiwan - have jumped 173% in the same period.

Last year Asian nations took more than $8 billion worth of our $20 billion worth of exports.

Mr McKinnon observed that these figures demonstrated the strength and growth of New Zealands relationship with Asia and the enormous potential there is for Asian investors to play role in New Zealand.

He pointed out the National Government promised to boost foreign investment in 1993 and this promise had been kept.

The number of foreign investment approvals have increased from 343 in 1992 to 444 last year and in terms of value has averaged $6 billion per year for the last three years.

The United States, Australia and the United Kingdom have accounted for over two thirds of that. Asias share has varied, accounting for between a third and a sixth of our foreign investment. Last year it accounted for 15%.

Its also interesting to note New Zealanders actually invested more in Asia than Asia invested in New Zealand last year - $800 and $700 million respectively.

Mr McKinnon said New Zealand is fully aware of the benefits of foreign investment and will continue to encourage it.

International trends suggest foreign investment plays a major part in a third of New Zealand jobs. This investment allows us to keep up with the rest of the world across a range of goods and services - from computers to earth movers to ice-cream manufacturing.

We are now an outward looking, economically confident nation, he said.

In concluding he ran through the five economic fundamentals the Government intends to stick to:

  • an open internationally competitive economy:
  • price stability and the Reserve Bank Act;
  • an efficient, broad based low rate tax system;
  • a flexible labour market and the ECA; and
  • debt repayment and the Fiscal Responsibility Act.

These, he said, were about stability, freedom and growth and should signal to foreign investors we are worth a serious look and worth investing in.