Pledge on wool quota from China

By Andrew Laxon

China has promised it will honour an agreement to import more of our wool.

The commitment from Chinese President Jiang Zemin yesterday was welcomed by the wool industry, which could make tens of millions of dollars through better access to the Chinese market.

Mr Jiang, who is making the first state visit by a Chinese President to this country, was reminded of the issue by the Prime Minister, Jenny Shipley, during bilateral talks in Wellington.

The Chinese leader was greeted by 2500 schoolchildren - including 900 Wellington College students performing a haka - and a 21-gun salute in the grounds of Government House.

After more than an hour of talks inside, he and Mrs Shipley emerged to make generally bland statements about the good relations between both countries.

However, Mrs Shipley said she had raised the wool quota problem as an important matter for this country "and we value the progress that's being made here."

China imports about 170,000 tonnes of wool, including 100,000 from Australia and 40,000 from New Zealand.

It agreed two years ago to import 280,000 tonnes of wool but has failed to stick to the quota timetable.

A spokesman for President Jiang, Zhu Bangzao, acknowledged afterwards that our wool exports to China had fallen in the first half of this year.

He blamed "lack of coordination in terms of the quota control" but said improved coordination would see an increase in imports from New Zealand in the second half of this year.

The Wool Board's policy manager, Roger Buchanan, said exporters had been frustrated for some time at China's lack of action but the assurance from the President was very encouraging.

One problem was that quotas in China were being decided on historical use, which disadvantaged fast-growing markets such as machine-made carpets.

"There are manufacturers in China who we know want to buy wool but they can't because they can't get access to quota.

"Most hotels are now specifying, because of the work of Wools New Zealand [the board's operating arm] in China, that the wool carpets they purchase must be made from New Zealand wool.

"But the manufacturers aren't able to source New Zealand wool because of the quota administration issues."

Mr Buchanan said we sold about $200 million of wool to China each year but a few years ago the figure had been closer to $300 million.