Chinese banks pitched as new competition for Australia‑owned giants
Friday, 26 June 2026
A new recipe for reducing the dominance of the big four Australian-owned banks, was mooted at the China Business Summit: the Government should encourage big Chinese banks to expand lending in New Zealand.
The summit, held at the Cordis Hotel in Auckland on Thursday, is an annual event at which business leaders and politicians discuss the financial and political relationship between New Zealand and China.
But speaker Warren Hu, chair of the China Chamber of Commerce in New Zealand, told delegates New Zealand should look to Chinese banks, and cheap Chinese money, to increase banking competition.
“Many in this room may not appreciate China is in a different interest rate cycle,” said Hu, who is also chief executive of Bank of China in New Zealand.
“China has maintained a ‘commodity’ monetary policy. Interest rates in China are near historic lows,” said Hu. They are lower than in the US, Australia and New Zealand.
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“My question to you is simple: Why should New Zealand borrowers not benefit from it? Borrowing costs in New Zealand have climbed sharply,” he said.
But, he said: “Bank of China is one of the world’s largest banking groups. Our parent company has access to China’s deep, low-cost funding pools. We can raise funds in China at a cost significantly lower than what is available in the New Zealand wholesale market.”
After hedging, those funds could be lent to New Zealand borrowers at 21 basis points lower than “normal”, he said.
But there was a catch.
Though he didn’t say so in his speech, the encouragement he wanted from the Government was changes to regulations to make it easier, and cheaper, for giant overseas banks to make loans to New Zealand borrowers.
Such public lobbying for regulatory change is not unprecedented.
The big four Australian-owned banks, and Kiwibank, recently won changes of Reserve Bank policy to reduce their costs which they promoted in hearings in Parliament.
Hu is noted for making jokes, and speaking bluntly in speeches, and did so at last year’s summit, where he called “bullshit” on nervousness over New Zealand working with Chinese companies to build infrastructure like roads, rail, and dams.
And he turned some of that humour on New Zealand First, after the party offered a very different idea for boosting bank competition.
New Zealand First has floated the idea of taxpayers paying to renationalise BNZ as a means of increasing banking competition, and reducing the billions of dollars in dividends paid by Australian-owned banks in New Zealand to Australian shareholders.
Hu joked the policy was from the “old naughty boy” of New Zealand politics.
“From a banker’s perspective, it is not a good idea,” Hu said.
“In New Zealand, I offer an alternative solution. Why not encourage Chinese banks to grow and flourish in New Zealand? Imagine today if Chinese banks and Australian banks were locked in fierce competition fighting to offer Kiwis better rates, lower fees, and superior service?
“That is entirely achievable,” he said.
In New Zealand the four banks commanded up to 85% of market share, Hu said, compared to the 40% market share of the big four state-owned banks in China, or the largest three banks in Singapore, which had roughly 30% market share.
There are three Chinese banks with operations in New Zealand: Bank of China, China Construction Bank and the Industrial and Commercial Bank of China.
This year the China Business Summit had an extra level of interest due to heightened international tensions prompted by US President Donald Trump, but also China’s decision to temporarily bar four New Zealand MPs from visiting China after they took a trip to Taiwan, which China saw as violated its “one-China principle”, and so constituted interference in China’s internal affairs.
The summit was attended by senior politicians including Prime Minister Christopher Luxon, Trade Minister Todd McClay, and Regional Development Minister Shane Jones.
China’s ambassador to New Zealand Wang Xiaolong also spoke.