KEY POINTS:
New Zealand should expect to see more Chinese businesses interested in buying stakes in Kiwi companies, says a top HSBC executive.
Margaret Leung, general manager and global co-head of commercial banking for the Asia-Pacific region, said the recent purchase of Vector's Wellington lines business by Cheung Kong Infrastructure Holdings highlighted China's growing interest in New Zealand.
"There have been lots of exploratory visits to New Zealand already."
Leung said Chinese businesses were being encouraged by China's Government to invest outside the country to help ease pressure to appreciate its currency and many saw New Zealand as a safe haven.
"They believe it is much safer to invest in New Zealand. It is politically stable and the supply is limited, particularly in property. They believe there will be good opportunities to find good quality companies."
Leung, who is based in Hong Kong and was in New Zealand yesterday to catch up with key trade contacts, said HSBC was planning to take a delegation of New Zealand business people to China in October to meet prospective investors.
The banking group is also hoping the visit will help build its import and export trade business on the back of the recently signed free trade agreement between New Zealand and China.
"We are the largest foreign bank in China. We have also been in New Zealand for a long time. At the moment New Zealand's largest trading partner is the US. But there is just that much more opportunity to export into China."
HSBC provides services for around 26 per cent of New Zealand's exports to China and 6 per cent of imports to New Zealand. Leung said the company wanted to keep taking its share of the increasing trade.
"At the moment we are financing quite a bit of meat exports but we certainly want to grow the dairy side as well."
Leung said a growing number of affluent Chinese were particularly keen on dairy products for health reasons and New Zealand was seen as a leading source at a time when China was increasingly having to look offshore for food sources.
"Quite a lot of natural products we used to produce ourselves but now China is having to look more and more outside of itself for food sources, as cows have given way to roads and factories."
Leung said China's Government saw industrialisation as a key way to spread wealth from the coast into central China but increased building meant there were fewer people working in agriculture and less land for cropping and grazing.
This has already pushed up rice and pork prices significantly this year.
Leung said New Zealand had a lot of lamb and if China could buy it cheaply from New Zealand it would do so.
On the imports side, Leung said there was also a lot of potential despite the fact that New Zealand appeared to be flooded with cheap Chinese-made clothes and electronics
"At the moment there are a lot of importers that are relatively small companies that sell on to chains."
Leung believed the big chains would also look to import directly - as America's Wal-Mart does.
IN CHARGE
Margaret Leung, HSBC General Manager, Global Co-head Commercial Banking
* Joined HSBC 1978
* Helped set up HSBC in Australia in 1985
* Appointed Group General Manager of HSBC Group 2005
* In the top 25 executives at HSBC
* First female Asian to be made general manager
