Debate over Chinese investment in New Zealand agriculture has re-emerged following Shanghai Maling’s acquisition of 50 percent of New Zealand’s largest meat processor, Silver Fern Farms (SFF). Despite Ministers blocking Shanghai Pengxin’s application to buy Lochinver Station in September, New Zealand remains open to foreign investment provided it is likely to deliver greater benefits for New Zealand than comparative local investment. With Shanghai Maling’s $261 million bid significantly stronger than its $90 million late challenger, SFF shareholders will probably vote in favour of the partnership when they meet on 16 October. From there, Overseas Investment Office (OIO) approval is expected to take six to nine months.
As the Lochinver decision demonstrates, Ministers do not need to follow an OIO recommendation. However, SFF’s weak financial position, Shanghai Maling’s connections in China, the joint partnership structure of the deal and the fact the transaction does not involve any significant amount of land all point towards the sale getting the statutory and political green light. Furthermore, following concern over the Lochinver decision by high-ranking Chinese officials the Government will be keen to show it hasn’t soured to Chinese investment.