Questions will remain about the viability of plan by a Chinese company to invest $1.5 billion in the New Zealand dairy industry, but one thing is certain - the desire by China to invest overseas.
China is due to become the second-largest economy in the world by 2015 and the largest by 2021, outstripping the United States and Japan in the process.
So far, the investment process, although not one way, has been skewed largely in favour of overseas investors moving into China. The United States alone threw more than $US92 billion ($NZ130 billion) into Chinese ventures in the last financial year.
The lead item in yesterday's Los Angeles Times was about Shenzen New World Group paying $US60 million for a 469-room hotel in Los Angeles. The group intended spending $US13 million on renovations.
The purchase appears part of the "go-out strategy" adopted by the Chinese Government in 2002. Figures for Chinese investment in overseas markets are hard to find but those found yesterday showed the Chinese Government had spent $US100 billion in 2008 in overseas investments. Most of the money is spent in Asia, followed by the US and the United Kingdom.
The Otago Daily Times recently reported about the failed bid to buy 28 Southland farms by an Auckland hapu with financing from Dubai.
The deal, which was a 99-year food supply contract with the Dubai interests, fell over owing to the hapu failing to meet deadlines and a breakdown in communications.
Federated Farmers rural security spokesman and Southland farmer David Rose said a cursory check could have found the involvement of convicted fraud Shane Wenzel in the purchase, and the failure to complete the $150 million deal showed the need for higher professional standards in the real estate sector.
A notice posted to the Hong Kong Stock Exchange this week has sparked much activity with its reference to buying the failed Crafar farms empire.
Natural Dairy - owner of 20% of New Zealand Company UBNZ Assets Holdings, which has bought four North Island farms - told the exchange it had "entered into an asset purchase agreement to buy assets, including farm lands, livestock and milk powder plants in New Zealand". The acquisition was $NZ1.5 billion.
The notice to the exchange was in the form of a holding announcement. The company's shares have been suspended since early February, pending an announcement.
Natural Dairy spokesman Bill Ralston said the company had bought four dairy farms through UBNZ. Two were from a receivership involving a Crafar family member, and the other two were from a company that was not in receivership but involved a Crafar family member.
UBNZ is headed by Chinese businesswoman May Wang, who is reported to have two liquidated businesses in New Zealand and owes creditors through a failed property company, Dynasty Group.
The National Business Review reported yesterday that May Wang owed creditors about $700,000.
The theme for both the Southland and Crafar farm deals is securing food supply for wealthy nations. While the Southland one failed, there is no reason to suspect someone else will not try in the future.
The Chinese are securing oil and resources supplies in Africa and crucial United Nation votes by propping up ailing Pacific Island economies - often in a race to outbid Taiwan, which is also seeking the same votes.
It should be no surprise, then, that China wants its own food supplies, particularly in dairy products.
The company that has most to lose is New Zealand's largest, Fonterra.
Fonterra, which expects China to be the world's largest dairy market in 25 years, said demand there would triple during the next decade to be worth about $US70 billion.
It is expanding its own milk production in China, spending $25 million to build two new dairy farms, in addition to its existing one, so it can control the quality of the milk it uses.
China is New Zealand's third-largest export market and the free-trade deal signed in 2008 will phase out Chinese tariffs on New Zealand-sourced dairy products over 12 years.
Natural Dairy has indicated it is seeking to establish its own processing plants in New Zealand, though Fonterra chief executive Andrew Ferrier doubts there is an economic case for Natural Dairy to establish its own plant.
The Fonterra system was more efficient than any other.
"But again, we're getting ahead of ourselves. We have to get the facts behind this issue," he said.
Thinking about long-term food security, New Zealand had to be awake to the fact many people were going to be interested in investing in this country, he said.
"Our Government does have to be aware of the fact that there should be extensive foreign interest over time in investing in New Zealand farms, and we've got to think of this from a policy perspective."
Mr Ferrier seems to be missing the point. The Crafar farms, in receivership, are running about 20,000 milking cows with 10,000 other stock.
The company reported its six-month results this week and the important figure was the top line. Revenue was down 3.7% from $8 billion to $7.7 billion.
Lower average selling prices cut more than $1.6 billion from Fonterra's revenue but this was partly offset by $1 billion of additional revenue as a result of higher sales volumes, and positive net foreign exchange impacts of $300 million (including hedging gains).
If Fonterra loses 20,000 cows from its factory throughput, then revenue can be expected to continue to fall until those cow numbers are replaced.
Fonterra is already under pressure from smaller dairy companies unhappy with the activities of the dairy giant.
The prospect of losing more cows should concern Mr Ferrier.