Wellington blocks farm purchase by China firm

Wellington

NEW Zealand's government on Thursday blocked the NZ$88 million (S$78.1 million) purchase of a local farm by China's Shanghai Pengxin amid public concerns about foreign land ownership. The move was a surprise as the Overseas Investment Office, a body that supervises foreign bids for sensitive assets in New Zealand, had previously given its approval for the sale of the 13,800 hectare Lochinver farm in the country's North Island.

"We are not satisfied there will be, or is likely to be, a substantial benefit to New Zealand - a key requirement for applications of sensitive land of this size," the government said.

Rules on foreign ownership of land in New Zealand are stricter than in many other nations as the potential buyer has to show a benefit to the country. In Australia, for example, investors only have to show any purchase would not hurt national interests.

Pengxin, owned by Chinese billionaire Jiang Zhaobai, said it was surprised by the decision and was considering its options. Stevenson Group, which agreed to sell the property to the Chinese buyer, said that it was unclear why the farm was different from others that had been approved. Lochinver Station, in the centre of the country's North Island, is used to breed sheep, as well as beef and dairy cows.

Dairy is New Zealand's largest export earner, while China is the nation's biggest customer for many dairy and meat products. REUTERS