Three of China’s biggest state-owned lenders have established a presence in New Zealand by currying favour with leading political figures.
China Construction Bank has just become the third Chinese bank incorporate in New Zealand and be registered for business with the Reserve Bank, following in the wake of state-owned peers Bank of China and Industrial & Commercial Bank.
The trio possess average assets of USD$3,3380 billion, as compared to total banking assets in New Zealand of just $370 billion.
According to Brian Gaynor writing for the NZ Herald, the state-owned banks, whose are accustomed to dealing with leading policymakers back, have adopted the strategy of appointing senior politicians to top positions.
Former Prime Minister Dame Jenny Shipley is the chair of China Construction Bank (New Zealand), former National Party and Act Party leaders Dr Don Brash chairs Industrial & Commercial Bank of China (New Zealand), while former Napier National Party MP Chris Tremain is chair of Bank of China (New Zealand), where former finance minister Ruth Richardson also serves as a board member.
The Chinese banks are entering a finance sector which is already heavily foreign dominated, with twenty of New Zealand’s 25 banks overseas owned, accounting for 92.5% of total bank assets.
Australia’s big four banks collectively account for 86.3% of New Zealand’s total bank assets.
According to a 2017 IMF working paper, “Bank Ownership: Trends and Implications,” New Zealand is only of only five countries where 95% of banking assets are under foreign ownership, alongside Belize, Estonia, Fiji and Madagascar.