Govt unveils plan to improve Chinese ties

Prime Minister John Key speaking at China's 60th anniversary celebrations in 2009 Photo / Martin Sykes

Prime Minister John Key today launched a formal strategy to improve ties with China, including more investment from Chinese SOEs, and attracting more Chinese students and tourists.

The Government will boost the number of business delegations it leads to China and will set up a body similar to the US - NZ Council aimed at promoting the relationship through leaders in academia, business and the public sector.

The China strategy is the second in a series of formal strategies drawn up to develop bilateral relations. The India strategy was released last October. Other strategies under development are for the United States, Australia, south East Asia, the Middle East and the European Union.

Mr key said New Zealand was on track to reach the trade target set by him and Premier Wen Jiabao in 2010 - to double two-way trade from $10 billion to $20 billion by 2015.

Mr Key launched the strategy at The Cloud in Auckland.He said it started from an explicit recognition that the two countries had an excellent political foundation on which everything should be built - this year marks the 40th anniversary of diplomatic relations.

"We can't engage with China just on the trading front - we need to work across all sectors to build the range of links that will enhance our understanding and familiarity with one another.

The strategy says that New Zealand would benefit from more foreign direct investment (FDI) from China, and outward direct investment into China.

It estimates that China invested about US$60 billion internationally in 2010 - 11. But total Chinese investment stock in New Zealand was $1.87 billion - compared with say investment from Australia in New Zealand being $100 billion.

"Avenues for increasing investment in New Zealand include Chinese state-owned enterprises [SOEs], which could provide investment capital for strategic resource development and infrastructure funding."

It says major outward major FDI bids from China were subject to Chinese Government vetting.

Private Chinese investors were showing interest in the food and beverage sector, natural resources, cleantech, high value manufacturing, IT and infrastructure.

Total new Zealand investment in stock in China is valued at $541 million compared with $36 billion in Australia.

The strategy identifies the education sector for greater focus as well to meet a goal of doubling the economic value of export education services to $5 billion by 2025.

it wants more New Zealanders to learn Chinese.

China is at present the largest source of foreign students in New Zealand with about 21,000 enrolments in 2010.

It estimates that Chinese students add about $600 million annually to the New Zealand economy.