Kiwi exports to China rose 45 per cent to $10 billion last year, while imports coming in the opposite direction lifted 7 per cent to $8.3 billion.
NZIER said much of the most recent doubling in two-way trade - to about $20 billion from $10 billion in 2010 - was a result of New Zealand exports being redirected to China from other markets, where demand was being sapped by economic downturn, rather than growth in production.
Over the past five years New Zealand's exports to China have grown by $7.4 billion, or almost 300 per cent, while those to the rest of the world fell by $2.3 billion.
Repeating the past growth in commodity exports could not be relied on for the next doubling of trade, NZIER said.
"This is because production increases cannot keep up and future demand may not be for the same commodities or grow at the same pace."
NZIER principal economist Shamubeel Eaqub said things could have got quite ugly for New Zealand if growth in exports to China had not been so strong over the past few years.
"But you can't keep pushing more and more of [the same] products out to one place," Eaqub said. "You can't keep relying on gaining market share."
He said concentration of exports also left New Zealand exposed to market volatility, as highlighted by the current slump in global dairy prices. Meanwhile, NZIER said this country's exports to China would need to grow by 7 per cent a year in order to hit the $30 billion bilateral trade target the two countries want to reach by 2020.
Eaqub said the $30 billion goal was very achievable.
"But we need to be more ambitious because there are all of these opportunities in terms of increasing the value of what we export as well as creating more breadth in what we export."
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NZ China Council executive director Pat English said Fonterra's partnership with Chinese infant formula maker Beingmate - through which the dairy co-operative hopes to increase sales of its Anmum infant formula brand in China - was a good example of a New Zealand company taking steps to boost higher-value exports.
Other companies showing strong potential in China included traffic management system developer HMI Technologies, cinema software developer Vista Group and Pure New Zealand Greenshell Mussels, a joint venture between a number of Kiwi seafood firms.
But the Chinese market is notoriously difficult to crack, with English pointing out that China came 96th in the World Bank's ease of doing business rankings.
New Zealand is third-ranked on that list, behind Hong Kong and Singapore.
English said more companies needed to collaborate with firms in the same sector when entering China.
How much trade does NZ do with China?
Kiwi exports to China rose 45 per cent to $10 billion last year. Imports lifted 7 per cent to $8.3 billion.
What's the target?
$30 billion of bilateral trade by 2020.
What's the risk?
Dairy, meat and forestry products have driven nearly 80 per cent of the recent rise in exports. Analysis commissioned by the NZ China Council says the biggest risk facing trade growth is export "concen-tration" into a small number of products such as logs and milk powder.