China's green revolution

John Key and Fonterra's Henry van der Heyden meet representatives of Yum China at the launch of New Zealand Central.

China's upcoming 'Green Revolution' has been tipped as a hot opportunity for New Zealand companies to promote their technologies in the sustainability space.

McKinsey's China head Andrew Grant says the situation facing China as the growth in greenhouse gas emissions accelerates is "slightly terrifying" but presents plenty of opportunities.

"Today, China and the US roughly emit about seven gigatonnes of CO2 each year," Grant said. "If you assume the current technology and GDP growth rate continues, in 2030 China ends up emitting 23 gigatonnes of CO2 each year."

To arrest the growth in emissions China needs to switch from its dependence on coal to fuel the electricity plants that power its factories, and, shift to more renewable energy.

Grant points to New Zealand's expertise in designing hydro-electric generating plants, wind power and solar energy installations. Many of the parts of China where the Government wants to put wind power have similar topography and wind patterns to New Zealand.

Though some of our firms are plugging away in the China's green space, New Zealand should take a more strategic approach and scale up involvement.

Other opportunities exist for forestry experts to share their expertise in assisting China "forest" large areas and introduce grasslands to help abate greenhouse emissions.

Grant warns the Chinese are not standing still in areas where NZ sports a competitive advantage. He cites Chinese dairy company Mengniu claiming to have developed a dairy herd sexing technology that will result in 98-99 per cent of all bovine births being cows. If true, this will be "truly transformational" for the dairy industry.

Grant warns New Zealand can't sit around: "The thing that terrifies me is the Peter Jackson quote - 'New Zealand is always a buck short and a day late'."

There are also many opportunities for NZ's smaller-to-medium enterprises to engage in "soft skills" such as selling their expertise in areas like marketing, human relations and conflict resolution.

The global financial crisis and resultant international recession has slowed China's economy. McKinsey predicts it will resurge again by the end of this year to sport growth rates of 8 per cent of GDP and stay relatively high before plateauing at around 6.5 per cent in 2030.

Grant says the Chinese will use the current crisis to accelerate change in high-tech areas. China's central bank, however, notes the global economic crisis is still spreading and the recovery is not yet on solid ground. Growth is spreading out to less-developed provinces which could become a new economic driving force. But short-term, China has a bleak outlook on the exports front as the recession reduces demand.

NEW ZEALAND'S SHANGHAI BEACHHEAD

Prime Minister John Key put New Zealand Central on the map when he visited the Shanghai centre on his first official visit to China.

The centre - which opened late year - is on the edge of the prestigious Xintiandi area: an upmarket retail, leisure and residential precinct in downtown Shanghai's Puxi district, a favourite haunt of local celebrities.

NZ Trade and Enterprises uses the centre to showcase the New Zealand brand and provide a base to help Kiwi firms grow their presence in China. NZ businesses can use the centre for meetings, events, promotions and networking to build brand recognition, profile and a network of contacts.

NZTE warns exporters China is "no place for beginners", but for those that already have runs on the board.

It has singled out food and beverages as the prime "hot sector" where New Zealand can capitalise on its clean, green image and reputation for producing high-quality safe food to sell into the growing consumer market.

Another hot sector is export education which has rebounded since the NZ dollar weakened - student visas were up 26 per cent last year. But Grant says if we take a more strategic approach, education returns will snowball.

China is New Zealand's fourth largest export market, growing 300 per cent over the last decade.

MOULDING CHINA
Three forces that will shape China's future:

* World's first "urban billion" - as more rural Chinese move to gateway cities
* Rise of the consumer - as the middle-class Chinese boom increases demand for high- quality products including food
* The Green revolution - to combat the rising growth in greenhouse gas emissions McKinsey's Andrew Grant.