China trade deal huge success one year on, says NZ agency

A year ago today New Zealand's free trade agreement with China came into effect.

The results so far show it to be a big success, says New Zealand Trade and Enterprise's general manager for North Asia, Rod McKenzie.

New Zealand exports to China climbed to more than $3.3 billion in the year to June 30 - an increase of 61 per cent on the previous year.

Demand for food and beverage products had fuelled that boom, a sector which had further potential for growth, McKenzie said.

Dairy products including milk powder and infant formula recorded double- or triple-digit growth.

"There wouldn't be any other geographic market in the world where we were doing as well at the moment."

He said the Chinese focused on eating specific foods for health benefits, so products such as manuka honey could be successful.

"I would be looking very hard at health supplements," he said.

"That's clearly an area where New Zealand is seen as having a competitive advantage and I think we could make a lot more of that."

A renewed focus on food safety in China has opened up opportunities for New Zealand food products and supply chain expertise.

"That is changing the face of China as a consumer of goods. They've still got to import food, they can't feed themselves, but they're being much more stringent about what they're bringing in and how it's tested," said McKenzie.

The free-trade agreement has heightened awareness of the Chinese market and McKenzie said more than 500 New Zealand companies were either doing business in China or planning to explore the Chinese market.

"I think if you went back even a couple of years it wouldn't have been half that number."

But companies wanting to turn opportunities into a secure revenue stream need to take a long-term view of China, he said.

"In China terms, one year is nothing, it's like a second in time. The Chinese talk in 10, 20-year time frames about development."

Unlike the United States and European markets, to be successful in China companies needed either to be there regularly or to base themselves there, he said.

Trade and Enterprise is set to open offices in Shenzhen and Qingdao to try to tap into Chinese markets outside the main cities of Beijing and Shanghai.

New Zealand will be represented next year at the World Expo in Shanghai.