The Chinese Government is planning to buy a big block of land close to Government House for a large new embassy compound.
Sources say it has signed a contract to buy a property from the Foodstuff supermarket chain, across the road from the Basin Reserve.
The deal, reportedly worth $16 million, is expected to be settled later this month.
Foodstuffs bought the former Boys and Girls Institute site, bounded by Rugby, Tasman, Douglas and Belfast streets, and cleared most of the buildings five years ago to make way for a new store, but the development subsequently stalled.
It is understood the Chinese Government wanted around two hectares for a big new embassy compound to house its offices and staff. Chinese officials have been looking for about a year for a suitable site.
The Foodstuffs property, which covers just over one hectare, has been identified as the only large enough site close to the centre of Wellington.
Chinese interest was confirmed when a group of Chinese officials were seen visiting the site by members of Mt Cook Mobilise, a residents' group formed in 2007 to oppose Foodstuffs' plans to put a Pak 'n Save supermarket on the property.
Spokesman Peter Cook said an embassy would be preferable, as it would not generate as much traffic in an already congested area.
"An embassy for the People's Republic of China would be very ordered and clean and tidy, and we hope it would look good."
The only minor concern would be whether the embassy would keep the historic facade of the old Boys and Girls Institute, he said.
The Chinese have outgrown the Glenmore St embassy building they have occupied since relations were first established with New Zealand in the 1970s.
The embassy used to accommodate all its staff, but many are now housed elsewhere. Earlier this year, the embassy moved its visa section and other staff into the former Royal Society headquarters next to the United States embassy compound in Murphy St.
A diplomatic observer expected the Chinese would be looking to build a large Chinese-style building at the new site to give it an appropriate presence.
Chinese embassy spokesman Gang Chen confirmed it was in the process of looking for new premises, but could not provide any further information.
No comment was available from Foodstuffs about the sale of the Rugby St property. Agents and local officials also declined to comment publicly.
- The Dominion Post
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