“N.Z. Must Increase Her Exports To Asia”

Press, Volume CVI, Issue 31135, 11 August 1966, Page 12

“N.Z. Must Increase Her Exports To Asia”

New Zealand must “beef up’’ her exchange holdings by increased exports to Asia, particularly Japan, and consider trading with the Soviet bloc and China, which had one-third of the world’s population, Mr C. D. M. Wilde, senior lecturer in law at the University of Canterbury told members of the Insurance Institute of New Zealand in Christchurch yesterday.

In addition to his university duties Mr Wilde is preparing, under the auspices of the British Institute of International and Comparative Law, a threevolume publication on the climate for investment in the Commonwealth with specific reference to incentive legislation. The first volume will

deal with Malaysia, the West Indies, and New Zealand. In favour of New Zealand investment was the Land and Income Tax Act which, with i the 10 per cent investment I allowance, should make New [Zealand attractive to investors, said Mr Wilde. He wondered why the allowance I was to be discontinued, as [ suggested in the last Budget. Japanese Finance The extensions to the Auckland harbour bridge were to be financed by the ImportExport Bank of Japan, which normally made loans to “under-developed nations,” said Mr Wilde. He asked what had happened in New Zealand since the initial financing of the bridge, which had been carried out largely by life, insurance companies. The News Media Ownership Act had received a lot of publicity, said Mr Wilde, but the sophisticated overseas investor today was not looking for a majority holding—he would take 49 per cent of the shares if they made money for him. The Exchange Control Regulations and the Overseas Issues Regulations were more important to the investor, said Mr Wilde. In each of them was a clause which provided that any consent or exemption granted under the regulations may at any time be revoked by the Minister of Finance and any conditions, therefore, could be revoked, varied, or added to. If an investor questioned the sagacity of investment in New Zealand with this red flag flying he would advise them to have a long second look, said Mr Wilde. “War-time Stringency” Mr Wilde questioned the need to protect industry with import licences instead of tariffs and said New Zealand’s exchange regulations were as stringent as war-time regulations. One of the factors causing the need for import licences) was New Zealand's exchange | deficit, which arose not from a deficit in visible trade but I

I from invisible holdings, such ! as travel and the servicing of [ capital loans. I Short of defaulting, the rei payment of loans remained a constant factor in the books |of a country, said Mr Wilde. I His advice to foreign invest- [ ors would be to see what happened to import licences and exchange regulations. There would be no improvement in these until exchange holdings had been increased, and this meant increased exoprts. The population of the United Kingdom was approximately 50 million, and in 1965 New Zealand exported £lB6 million worth of goods to the United Kingdom, said Mr Wilde. China, Japan, and the Soviet bloc had roughly half of the world's population, and last year New Zealand’s trade with these countries was worth £6.5 million. This market could no longer be ignored, and he suggested that a mission, to include an economist, a businessman, and a lawyer, should go to the Soviet Union and China to find out what they would like to buy and how much they would be prepared to pay for it. Business was business, said Mr Wilde, and natural prejudices about trading with totalitarian or Communist countries would have to be set aside.