KEY POINTS:
Ferrari, Gucci, Louis Vuitton - all the prestige brands are on display in the top-drawer shops that line Hangzhou's streets by the mystically beautiful West Lake.
The brands have moved in to tempt China's new wealthy elites who escape from nearby Shanghai and further afield to relax with
some high-class retail therapy.
Jennie Sew Hoy - director of NZ's Glacier Investments - observes there is quite a lot of competition, "not just from women", for the best jewellery and clothes.
"But the duty makes it expensive to buy - it's better to pick up things duty-free in Hong Kong."
At street level, the shops get plenty of looks from the many not-so-well-heeled Chinese who whisk silently by shoulder-to-shoulder on their electric bicycles around the lake to work at Hangzhou's many factories, hotels and tourist centres.
Hangzhou is renown for its natural beauty. It's situated on the mystical West Lake - the home to a striking Buddhist temple that escaped the ravages of the Cultural Revolution, the National Silk Museum and Longjiong (Dragon Well) tea.
Just over 6.4 million people live here. About 1.3 million foreign tourists visit each year and many more Chinese come from nearby Shanghai and further afield to relax in this "Paradise of China" and spend their hard-earned cash in streets lined with shops displaying the world's most luxurious brands.
Hangzhou was also the destination for the trade mission that Cabinet Minister Phil Goff took into Zhejiang at the invitation of party chief Zhao Hongzhu just two days after he signed the FTA last month with his counterpart Chen Deming at Beijing's Great Hall of the People.
Zhao rolled out the welcome mat to Goff's delegation: Fonterra's Bob Major. Air New Zealand's Kerry Marshall, Richina's Richard Yan, investment banker David Mahon, Glidepath's Ken Stevens, University of Auckland's Chris Tremewan, former trade commissioner turned environmental services provider Merv Stark and the Sew Hoys (Donald and Jennie) who source from Zhejiang some of the many garments their company Glacier Investments supplies each year to The Warehouse.
The delegation wanted to forge strong ties that would hopefully pave the way for them to do business in Zhejiang and ensure the right doors remain open.
In Zhao, a former deputy head of the Chinese Communist Party's central organisation department, they found a champion who is well-connected with the Beijing's leadership elite and the CCP's power centre.
Goff relates that Zhao invited him to come to Zhejiang during his own visit to New Zealand last year. The metrics stacked up: New Zealand was becoming a more familiar name in Hangzhou and the wider Zhejiang province, an area of 50 million people and containing China's largest concentration of private sector companies.
It was part of the Yangtze Delta region, the source of a quarter of all China's tourists to New Zealand and accounting for 10 per cent of New Zealand's total trade with china. The province's economy grew by 14 per cent in 2007, and the private sector contributes 70 per cent of its GDP
The top-level visit - coming so soon after the FTA - was significant. "Provincial governments sit up and take notice of things New Zealand now," said Stark. "It opens up a more receptive door to having our technology assessed and approved by the various environmental protection agencies."
Environmental Decontamination, the company he represented on the mission, could still do business in China without the FTA. "But it would be that much harder to reach the open door of provincial governments."
Provincial governments control many of "behind-the-border" protections and can make life hell for offshore companies by burying under a bewildering avalanche of bureaucratic demands - this can get more difficult to navigate the further away from Beijing.
Zhejiang's manufacturing is centred upon textiles, electro-mechanical industries, chemical industries, food, and construction materials. In recent years Zhejiang has followed its own development model, dubbed the "Zhejiang model" which analysts say is based on prioritising and encouraging entrepreneurship, an emphasis on small businesses responsive to the whims of the market, large public investments into infrastructure, and the production of low cost goods in bulk for both domestic consumption and export.
It's also the birthplace of Alibaba.com the world-leading B2N e-commerce company founded by former English teacher Ja Ma - with 18 other founders - in 1999 to help small manufacturers sell their wares.
Alibaba's Jane Jiang - who is senior manager of the B2B global operation - says the company's strategy is now geared towards globalization as it rolls out expansion plans. Jiang suggests New Zealand entrepreneurs wanting to source product from China should go online to make their arrangements through Alibaba. As Chinese SMEs hear more about the FTA benefits they "will be interested in going to New Zealand."
The Zheijiang spirit is legendary within China.
Former Premier Deng Xiaoping turned a blind eye when Zhejiang farmers began pushing against Chinese collective mentality by forming agreements to run their own businesses out of sight of the rural collectives. The entrepreneurs were breaking the law - but it fitted with Deng's aphorism: "It doesn't matter if the cat's black or white as long as catches mice."
As Kiwi businesspeople press back behind Shanghai's towering skyscraper - they may well find the Zhejiang spirit infectious.
