Two-way mutual investments between China and New Zealand help consolidate long-term transactional exchanges and cushion future shocks as China's inputs keep growing faster than overall rate, according to analysts.

China's foreign investment in New Zealand surged by 106 percent between 2014 and 2024 to reach NZ$1.4 billion ($820 million), growing at an average annual rate of 9 percent — significantly outpacing New Zealand's overall FDI growth during the same period.

A new report by the New Zealand China Council and the New Zealand Institute of Economic Research released late last month examined several representative case studies of Chinese investment in New Zealand, noting that in some sectors, "China's involvement has been significant, or shows potential to be so in the future."

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New Zealand China Council Chair John McKinnon said bilateral investment can help to ensure that New Zealand's relationship with China is more than transactional.

"Increased two-way investment can create long-term partnerships that expand trade and business but also guard against future shocks, increase market knowledge, and encourage transfer of innovation and technology," he said in the report's statement.

Top-up investments

The report cited the New Zealand dairy industry, an established sector for Chinese investment and involving some of the world's largest dairy companies. It observed that "recent top-up investments in New Zealand companies by their Chinese investors demonstrate the value of long-term partnerships".

The pet food sector illustrated a newer focus for Chinese investment. As the report highlighted, "export success in China generates investment interest", showing how strong trade performance can pave the way for investment.

Meanwhile, Chinese investment in New Zealand's video game development industry is described as carrying "global benefits, not just a focus on the Chinese market".

"New Zealand is entering a new 'no stone unturned' period of investment attraction and growth," said McKinnon. "It makes sense to draw on our long-standing bilateral relationship with China as this work advances."

According to the report, at least 60 New Zealand companies now have a corporate presence in China, but larger NZ investments are scarce. Between 2014 and 2024, New Zealand's outward direct investment to China was NZ$117 million.

Significant benefits

It highlighted that many foreign companies have derived significant benefits from investing in China since the start of reform and opening-up, adding that China remains open for business today.

It noted that China has introduced a series of policies demonstrating the country's recognition of the vital role foreign investment plays in its economy.

Such measures include an expanded list of encouraged industries for foreign investment, a shorter negative list limiting or prohibiting FDI in specific sectors, the implementation of national treatment for foreign companies, and the opening of the Hainan Free Trade Port.

The report also pointed to several concerns and challenges, ranging from market-specific obstacles to broader geopolitical tensions.

Despite these challenges, confidence in China remained solid among New Zealand companies.

"Many New Zealand companies have invested successfully in China," the New Zealand China Council told China Daily.

According to July's New Zealand Business Roundtable in China Business Outlook Report, 52 percent of New Zealand companies reported "high or very high" confidence about doing business in China, with 95 percent expressing at least "moderate optimism".

"This is due to multiple factors, including increased profit and revenue in China for many of the companies surveyed," the council said.

Core capabilities

When asked about the core capabilities New Zealand companies need to succeed with investments in China, the council told China Daily that companies "need to have a good understanding of the Chinese legal and regulatory environment, as it applies to their sector".

"They also need to understand local business culture. In many cases, the key to success is identifying a trusted and experienced local business partner who can act not only as a guide and adviser but also as a reliable commercial partner," it added.

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Looking ahead, the council expressed its expectations for stronger government-level engagement to sustain momentum in two-way investment.

"Mechanisms like the New Zealand-China Joint Trade and Economic Commission provide officials with regular opportunities for an open exchange of views," it said.

"Discussions at the leadership and trade minister level can also create positive momentum and intent. There will always be challenges to discuss, for example, due to the different goals of respective investment policies. But we hope differences will not become disputes," the council said.

Contact the writer at xinxin@chinadaily.com.cn