Minister to visit China and Japan
Hon Shane Jones
Minister of
Forestry
13 September
2018
Forestry Minister Shane Jones will visit
China and Japan to further strengthen New Zealand’s
relationship with two key primary sector export markets.
The aim of his visit is to promote investment in New Zealand’s forest industry, support trade development opportunities – including for New Zealand exporters of manufactured wood products – and establish relationships with counterparts and industry stakeholders in both countries.
“This visit will build on the many decades of partnership and mutual respect that we continue to enjoy with these countries,” Shane Jones said.
“It will also allow us to further promote our forestry industry which is one of our largest export earners, with both China and Japan key markets for New Zealand.
“With the Government’s One Billion Trees planting programme, we know that high-quality overseas investment will play an important role in achieving this ambitious goal.
“In the year to March, nearly half of New Zealand’s total forestry exports went to the China market, while Japan is New Zealand’s fourth largest investor and a major investor in New Zealand’s forestry industry,” Shane Jones said.
The Minister will attend the 8th Global Wood Trade Conference in Chongqing, along with a delegation that includes New Zealand wood processing companies, the New Zealand Forest Owners Association, and Crown research Institute Scion.
“It’s important that we continue to take steps like this to promote strategic cooperation in areas of significant mutual economic potential.
“This is a well-timed visit as it allows us to highlight the recent changes to the Overseas Investment Act, which will come into force in October. The changes will streamline the process of investing in New Zealand’s forestry sector and will also place more emphasis on value-added wood processing that will create jobs,” Shane Jones said.
Minister Jones departs New Zealand on September 14 and returns on September 22.
New Zealand forestry industry
New
Zealand’s forestry export revenue was $6.2 billion for the
year ending March 2018. This is an increase of 15.8 percent
from 2017, and can be largely attributed to strong demand
and prices from China. For the full year ending June 2018
New Zealand’s forestry export revenue is forecast to reach
$6.4 billion.
China-New Zealand
Relationship
Since diplomatic relations between New
Zealand and China began in 1972, the bilateral relationship
has grown to become one of New Zealand’s most valuable and
important.
China is New Zealand’s largest primary
sector export market, accounting for 27 percent of our total
primary sector exports in the year ended June 2018, more
than double our next largest partner, Australia.
Much of
this growth has been supported by the New Zealand-China Free
Trade Agreement (FTA), signed in April 2008. China and New
Zealand are currently negotiating an upgrade to the FTA.
New Zealand forestry products trade with
China
China is an important market for our forestry
industry. Last year (year ended March 2018) 47% of our total
forestry exports went to the China market. China received
75% of our export logs. The next largest market for export
logs was South Korea at 12%. China was also our largest
market for wood pulp, and our second largest market for sawn
timber.
Japan-New Zealand Relationship
Since
diplomatic relations were established in 1952, the bilateral
relationship, underpinned with high level political ties,
has grown strongly through two-way trade, economic, tourism
and people-to-people links.
New Zealand and Japan are
both parties to the recently concluded Comprehensive and
Progressive Trans-Pacific Partnership (CPTPP). Areas of
further opportunity in the relationship include renewable
energy, science cooperation, sports diplomacy and increased
Japanese investment in New Zealand.
Japan is the
world’s third largest economy; New Zealand’s fourth
largest trading partner; and New Zealand’s fourth largest
investor. Japanese companies have invested heavily in wood
processing in particular. In 2017, Japanese-owned
manufacturers processed approximately 40% of the total wood
processed domestically, or 5 million m3 of the total
roundwood harvested.
Changes to the Overseas
Investment Act to support investment
Changes to the
Overseas Investment Act, which will come into force on 22
October 2018, will provide a more consistent approach and a
streamlined pathway to overseas investment in forestry.
Specifically the changes:
• remove an existing
exemption for profits à prendre to ensure that all
interests in forestry assets are treated the same under the
Act. As a result of this change, acquiring forestry rights
(of 1000 hectares or more per year) or other regulated
profits à prende (of five hectares or more) will require
consent;
• introduce a simplified consent
pathway – the ‘special benefits test’ – for
investors seeking to acquire forestry assets (whether
freehold, leasehold, or forestry rights). Investors will be
able to obtain consent to acquire such assets as long as
they can satisfy a simple checklist, both reducing costs and
increasing certainty for investors.
• introduce
standing consents, which will allow investors using the
‘special benefits test’ to obtain prior approval to
enter into future forestry transactions, with the goal of
speeding up the application process and reducing costs for
investors.
The Overseas Investment Office, the
administrator of New Zealand’s foreign investment
screening regime, will provide updated information about
these changes and how they will be applied next
month.
ends