It has been ten years since the China-New Zealand FTA was signed. Kevin Parish, chairman of New Zealand Business Roundtable in China reflects on the lessons from the past, as well as the challenges ahead.
October 2018 marked the 10-year anniversary of the New Zealand–China Free Trade Agreement (FTA).
Upon reflection this has been a very positive story for New Zealand and China.
- Since 2008, China to New Zealand trade has doubled in value while New Zealand exports to China have more than quadrupled.
- China is now New Zealand’s largest trading partner, with two-way trade in goods and services accounting for 21 percent of New Zealand’s total.
- New Zealand’s main exports to China are dairy products, wood, tourism and education services, meat, seafood and fruit supplying middle-high segments; while China is selling to New Zealand a wide range of manufactured goods including computers and cellphones, railway rolling stock and locomotives.
- In China the New Zealand business community is now sufficiently large to support the establishment of a New Zealand business group, the Business Roundtable in China (NZBRiC); while in New Zealand the thriving Chinese business community has led to the establishment of the Chinese Chamber of Commerce in New Zealand with more than 110 members.
- The FTA has not only fostered better two-way business relations, it has allowed for greater cross-cultural understanding, tourism and education partnerships. In the past three years the number of new air routes between China and New Zealand has increased rapidly, enabling a wide range of Chinese from across China to visit our shores.
- There has also been an increase of Chinese investment into New Zealand. The total project value of foreign direct investment (FDI) from Chinese companies is now around $12 billion, with more than 25 investments greater than $100 million.
Sitting at the ten-year FTA anniversary mark, what are the lessons learnt by New Zealand businesses trading with China? What are the challenges being faced and how can New Zealand companies continue to position themselves to succeed in the complex and changing Chinese (and international) environment?
The geopolitical context is throwing up important questions including how New Zealand and China can work together for better trade outcomes internationally.
Some areas for consideration include:
- The global trading environment is changing and international multilateral trading norms are being challenged. Is it the right time for New Zealand and China to better represent their economic policies by a wider agreement on the virtues of free trade with other liked-minded countries through the Trans Pacific Partnership (CPTPP)?
- China and the Asia Pacific Region are expected to have the fastest growing economies in the world over the next decade. Is a bilateral agreement between countries in the same economic block the right strategic move or is it time to consider a wider trading group to ensure all the countries in the region share in the benefits of this projected economic growth?
- How to keep trade growing whilst not compromising on values which are essential parts of the New Zealand identity? How does New Zealand balance commitments to traditional trading partners whilst not missing out on the opportunities created with new trading partners? What can New Zealand offer beyond simple trading products that other countries value?
- What is China’s investment strategy into New Zealand and how is this likely to affect our economy? What is New Zealand’s investment strategy into China? What impact does Chinese investment have on the potential for New Zealand companies to invest overseas (ODI)?
The NZBRiC is keen to contribute to discussions on these important themes – what are the in-market experiences of New Zealand companies, what is the China-based business view of what is important for New Zealand’s next ten-year strategy with China, and how do our aspirations compare to China’s view of New Zealand and the wider Asia Pacific region?
The first ten years of the FTA have been a beneficial platform for New Zealand. There are enough case studies and growing business trends for us to all learn from. Some are negative and require attention. There are also many positive stories to reflect on and disseminate.
Over coming months, NZBRiC will aim to share some of the learning and development of evolving business strategies between China and New Zealand.
The New Zealand Business Roundtable in China (NZBRiC) was formed in 2018 with the purpose to:
- Provide a regular forum for New Zealand businesses and company executives in China to share ideas, opportunities, challenges and threats to continuing China business operations, growth strategies and new value creation;
- Facilitate meetings, events, conferences, visitor exchanges, white papers and other areas on a case by case basis on behalf of the New Zealand business community in China;
- Develop a shared voice and platform in China to advocate relevant, timely strategic themes facing the New Zealand business community in China, and support wider New Zealand government and business community initiatives to communicate and socialize emerging themes across the New Zealand business community participants in China;
- Represent key business interests on behalf of New Zealand in China (corporate, SME and entrepreneurial endeavors) and ensure there is timely communications with New Zealand Government agencies operating in China and ex officio members advising NZBRiC
To keep up to date with NZBRiC events and articles follow its LinkedIn page: https://www.linkedin.com/company/nzbric/about/
