Rebuff ‘may make buyers think twice’

FOREIGN investors might rethink their interest in New Zealand if a potential Chinese buyer of the Crafar Farms is turned down, a Chinese official says.

The Overseas Investment Office is reconsidering a $210 million offer by Shanghai Pengxin after the High Court overruled the original decision to accept the bid.

A group of New Zealand farmers and iwi sought a judicial review of the OIO’S recommendation to allow the sale of the 16 farms, and the Government’s support for that recommendation.

Prime Minister John Key said the Government would not appeal against the High Court decision and the OIO was taking its time to reconsider the offer.

Political counsellor Cheng Lei said yesterday that the Crafar Farms sale did not involve the Chinese Government or its embassy. However, they were closely following the deal like many New Zealanders. ‘‘Basically it is in the interests of our both countries and peoples.’’

In Parliament, Land Information Minister Maurice Williamson confirmed the OIO had met officials from the Chinese embassy to discuss the rules around foreign investment.

Mr Cheng said the embassy understood the sensitivity around the Crafar Farms deal. ‘‘I know there are some people in your country who are very sensitive to simply the term ‘China’.’’

Perhaps they could not accept the changes in China and the fast-growing and prosperous economy, he said.

While he did not believe that was a factor in the Crafar decision, he said declining the Shanghai Pengxin bid meant other potential Chinese investors might make a ‘‘second consideration’’.

Investors from Australia, United States, Britain and members of the European Union might have the same reservations. ‘‘I think they will take a very cautious stance as for the future investment in your country.’’