Michael Barnett: Chinese trade offers vast opportunities

COMMENT

China is now the world's sixth-largest economy and the fastest-growing among the larger countries - expanding by more than 9 per cent a year.

But it's not a producer of the high-quality foods and fibre products that New Zealand excels in, so the opportunities for our exporters are arguably reminiscent of the days when New Zealand was Britain's farm.

That is, if we play our cards right!

China is already our fourth-largest trading partner, taking some $2.5 billion of goods and services last year.

That's a five-fold increase on 10 years ago, and a leap from the early 1970s when the annual trade was worth little more than $1 million, mainly wool.

By 1994, our exports to China had grown to $570 million and included dairy products, wood and wood products, seafood, fruit, education and consultancy services.

A free trade agreement would provide an opportunity to greatly accelerate our exports into China, and help satisfy their growing demand for our kind of high-value food and fibre products.

I say this because while trade in recent years has increased, it has done so despite China continuing to maintain some high tariffs levied on New Zealand exports, such as 15 per cent on sheepmeat, 12 per cent on cheese, 20 per cent on kiwifruit, 10 per cent to 14 per cent on dishwashing machines and 5 per cent to 23 per cent on fish and seafood.

These are all items that we have the potential to export in significant volumes to China. While New Zealand has in recent years progressively reduced tariffs, a free trade agreement would encourage China to do likewise.

Of course, even if China reduces its tariffs to assist New Zealand exporters, there will be many other potential challenges to overcome such as language, business culture, customs and other regulatory regimes, marketing and the huge differences in scale between the two countries.

The greater challenge is ours - how we manage the opportunity that China has extended by agreeing to negotiate a free trade agreement and how we build an expanded inventory of finished, high-quality Kiwi branded goods and services.

Our jet boats, our superyachts, our canoes, our sailboards, our leisure and sporting clothing lines all enjoy a good reputation by those who know them.

We need to establish them in China much as we established our butter, cheese and Sunday roasts in the minds of British consumers for much of last century.

* Michael Barnett is CEO of the Auckland Regional Chamber of Commerce

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