Korea Behind Japan, China in Investment into New Zealand's Growing Economy

The New Zealand Investment Seminar was held by New Zealand Trade & Enterprise at The Plaza Hotel in Seoul yesterday, with the goal to raise awareness about New Zealand’s attractiveness for investment, particularly for Korean investors. The event included a welcoming speech by Ambassador Clare Fearnley, and an opening address by Melissa Lee, a member of the New Zealand parliament. The meat of seminar were two presentations, one by Koji Hikosaka, an investment manager from New Zealand Trade and Investment’s Tokyo office, and the other by a team from the Australia and New Zealand Banking Group (ANZ), Paul Goodwin and Stuart McKinnon.

The most compelling point made during the day was that Korean investment into New Zealand is far below Korea’s place as a trading partner with the country. Korea is New Zealand’s 6^th largest partner for trade, even without the imminent free trade agreement (FTA), but the amount of foreign direct investment (FDI) that the Kiwi economy sees from Korean companies ranks a surprisingly low 16^th. In contrast, Japan is New Zealand’s 5^th largest trading partner, slightly beating out South Korea, and also its 6^th largest foreign direct investor. This is why Melissa Lee said in her opening speech, “As a Korean New Zealander, I would like to see more investment from Korea.”

The country of New Zealand has plenty to appeal to any investor. The industries in New Zealand with the highest growth right now are agriculture, food and beverage, film and television, specialized manufacturing, and services areas. “Tradeable and innovation-related sectors we believe have the greatest opportunity to provide additional benefits to businesses,” said Ryan Freer, trade commissioner of New Zealand Trade & Enterprise. Every speaker at the seminar emphasized the extensive network of FTAs that are already in place between New Zealand and most of Asia, including China and the ASEAN. New Zealand was ranked by Forbes in 2014 as the 3rd best country in the world for business, and the World Bank ranked it 2nd in the world in the ease of doing business, surpassed only by Singapore. In his presentation, Koji Hikosaka also emphasized New Zealand's simple, business-friendly tax structure that taxes corporations only 28 percent and gives rebates for capital expansion and R&D investment. There are also no restrictions on the repatriation of funds, low inflation, and a flexible exchange rate. The economy of New Zealand is rated AAA by Moody’s, sure to calm the fears of even the most skittish investors.

Some Korean companies are already taking part in this attractive business environment, like Ottogi and Hansol. “Lots of food and beverages companies get ingredients in New Zealand and do on-shore manufacturing,” said Ryan Freer. Products that do not have the taste and style to appeal to the local Kiwi population are still manufactured in the country and then shipped overseas to Asian markets.

Also, several South Korean movies have taken advantage of the country’s burgeoning entertainment industry, like the 2010 film “The Warrior's Way,” which tells the story of a warrior and the film “Pokarekare Ana: Yeon-Ga,” in production now, which tells the story of a traditional Maori song that found its way into Korean culture during the Korean War.

Foreign Direct Investment is an important part of New Zealand's economic growth strategy, and also an important part of ANZ’s business as well. ANZ is New Zealand’s largest full-service bank with 31 percent of the country’s total registered bank assets. It has almost 50 percent of the country’s customers as well. Paul Goodwin, head of institutional relationships for ANZ and his colleague and Stuart McKinnon, executive director of institutional relationships, showed in their presentation how FDI from China increased at a steady, appealing rate after the FTA between the two countries was signed. They stated that ANZ is looking forward to a similar increase in the relationship between South Korea and New Zealand as well.

All in all, the seminar served to emphasize that New Zealand and South Korea were prime potential partners in investment and business, and that New Zealand would welcome Korea’s partnership with open arms. “We look forward to cooperating and developing further the relationship by means of Korean companies expanding investment into New Zealand’s food and beverage manufacturing, high value manufacturing and ICT sectors,” Freer said. Every representative at the event emphasized the need for partnership, for mutual benefit, and the possibilities for equitable prosperity.

Finally, when asked if he had any specific advice for Korean companies wanting to invest in New Zealand, Ryan Freer said, “Call me. We’re here to support.”