Canada has emered as New Zealand’s number one foreign investor. This was revealed in a study by financial services firm KPMG, which said Canada dominated the overseas investment in 2013-2014. It was follwed by China, which became the biggest foreign player in the dairy sector and stood second on overall investment with 14 percent, followed by the U.S. (13 percent) and Australia (11 percent). In terms of buying land, the U.S. was ahead of others. But in calculating major investments, residential property has not been considered.

The report, "Foreign Direct Investment in New Zealand: Trends and Insights" based its study on the data from Overseas Investment Office in the last two years. The value of applications approved by the OIO during the period was $14.2 billion (AU$12.7 billion) . The figures show that despite media and public perception, the U.S, Canada, Europe and Australia accounted for 59 percent of total FDI in New Zealand while the Asian region's share was only 33 percent. Canada topped as the largest source of foreign investment thanks to its pension fund that bought 18 properties and increased its stake in Kaingaroa Forest.

China not dominant

KPMG partner Justin Ensor, one of the authors of the report, said despite media attention on China, it has not been a dominant player in investment. Chinese investors spent more than NZ$1.9 billion (AU$1.7 billion) over the two years on dairy and real estate ventures. Ensor said, unlike other foreign investments, a large part of investment from China was in new assets than buying the existing assets, which increased the country's productive capacity.

China and Hong Kong accounted for 41 percent of investments in agribusiness, mainly in milk processing. However, KPMG expected that trend to slow as decline in international milk prices is becoming sharp and overseas speculators may buy farms coming up in distress sales.

The report also noted that the U.S. and China accounted for half of the top 10 transactions. Land acquisition by the U.S totalled 115,000 hectares, which was 46 percent of all land acquired by foreign buyers. China bought 11 percent of land and Netherlands 9 percent.

Monitoring sought

Meanwhile, Labour leader Andrew Little criticised the Overseas Investment Office, saying more controls are required. He called for tougher monitoring of investors. This follows statistics that showed Canadians as the biggest foreign investors in New Zealand. Speaking on TV ONE, Little questioned the OIO's criteria for allowing foreigners to purchase land in New Zealand. “When the OIO is making decisions about an overseas investor owning land here, do they consider whether the potential owner has the right management skills and are they going to add jobs and add value?" Little also accused the OIO of not doing enough to follow up on foreigners who are investing in New Zealand.

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