KEY POINTS:
Chinese Premier Wen Jiabao has given New Zealand business a not-so-subtle steer to Go West and explore new niches in China's road to riches.
But the message is taking a while to penetrate.
New Zealand entrepreneurs still flock to cities like Beijing, Shanghai, Shenzhen and Guangzhou where they face operating costs as much as five to 10 times that of Chongqing in Western China and compete for space and attention with well-heeled international corporations.
Jiabao has openly stated that the Chinese Government will discourage developing more foreign operations in such places, and encourage them to go West: Taxes, fees, subsidies, permits, and everything else has been adjusted to support that.
Chongqing, located at the reservoir behind the Three Gorges Dam, seems a good long-term fit for New Zealand entrepreneurs. The 32-million strong municipality is now under the leadership of former Chinese Commerce Minister Bo Xilai, sent there as party chief reporting directly to the Beijing Central Government and with a mission to turn the city's US$2 billion ($2.6 billion) deficit round and reposition it as China's Chicago.
Once the dam is finished, ocean-going ships are expected to travel all the way from Shanghai to the quays in Chongqing, ultimately shifting China's centre of gravity away from the coastal cities and putting another rocket under the economy.
Beijing has declared Chongqing a national pilot for areas in which New Zealand excels like dairy and other agriculture. Denmark has already office and consulate in the city and is selling plenty of product.
China analysts suggest that if New Zealand businesses establish a genuine presence in this gateway city to the Sichuan (the most populated province in China) they could receive preferential treatment. Ample local subsidies are already available and foreign invested enterprises operating there will also have foreign trading rights.
New Zealand Trade & Enterprise is concentrated in Beijing, Shanghai and Guangzhou. NZTE China Markets manager Pat English notes New Zealand companies are small and the West requires a different level of commitment.
"They would be pioneering, just like it was on the coast 10-15 years ago. And not all the logistics are in place."
The memories of earlier NZ pioneers in China still linger.
But companies do not have to rely solely on NZTE to get them into risk-taking.
A Kiwi already running a trade operation in western China wrote individually to some 200 New Zealand companies and offered a no strings co-operation to develop markets. He got one answer, and that was Fonterra chief executive Andrew Ferrier (a Canadian).
The Fonterra example is apposite.
The dairy giant was slow to read the signals from Beijing and provincial Government officials when it was suggested it should put a commercial stake in Inner Mongolia. In cities like Hohhot, the local dairy officer is also in charge of the poverty programme and armed with plans to get foreign dairy companies involved to create jobs for unskilled Chinese.
Unlike competitors, Fonterra was slow to put people on the ground, use foreigners with local acceptance and knowledge, sponsor a research centre, supply cows to farmers and put on milk delivery contracts.
The upshot is it was Denmark's Arla (not Fonterra) that ultimately formed a joint venture to market added-value retail packed milk powder in the Chinese market with China Mengnui Dairy the countrys fastest growing dairy company.
Western China is also ripe for the taking.
Kiwis might do well to remember former Premier Deng Xiaoping's advice to his countrymen on embracing free trade. "Close your eyes and jump into the river" and confront the risks later.
