Some sense on Crafars

Q+A interviewed David Mahon, a Kiwi who has lived in China for the last 25 years and invests there. Some extracts from the interview:

SHANE      So can you tell us exactly what China wants? Is this just one deal or the start of China targeting our resources?

 DAVID       China actually wants resources – whether they’re fibre, timber, wool – or whether it is protein. In the case of the Crafar farm deal, it’s a search for protein. The Chinese aren’t looking to buy land and to own land around the world; they’re looking to secure the resources that their own narrow agriculture base doesn’t supply them. And given the fact that Chinese are urbanising in such great numbers, and the demand for food is increasing, there is an urgency for the Chinese to secure good lines of supply.

Jenny Shipley has said the same thing. They basically just want secure supply of food, to feed their own population. This is an opportunity, not a threat.

If you look at the Crafar deal, already these farms have been owned by Australian banks. Effectively you’re transferring Westpac debt, largely, into Chinese equity. So the land was already lost to New Zealand by the time the company went into receivership. 

Exactly. The farms are now effectively Australian owned. Those who oppose the sale then are not really against foreign investment – just Chinese investment.