Opportunities exist for SMEs but they won't last forever says Michael Barnett
For New Zealand's businesses, the contrast between our local market and China could not be greater. For small-medium enterprises (SMEs), China's challenges might seem insurmountable.
Geographically, China is 36 times bigger than New Zealand, has a population over 300 times the size of ours and has a growth rate that sees the value of its economy double every seven years. Yet when you look closer at the opportunities and challenges presented by China, New Zealand businesses are in a more advantageous position than many from elsewhere.
We have a trade agreement. Our traditional commodity exporters have successfully established trade beachheads in many parts of China that have lifted China into the top three group of our export markets, but they say the market is still immature with considerable opportunity for growth. For New Zealand's SMEs that has to be good news and a reason to look closely at what China has to offer for doing business.
Though there will always be cultural differences between our countries, a new generation of consumers is emerging in China - they are young, well educated and familiar with non-Chinese cultures. This "Y generation" of 240 million, born between 1980 and 1990, are now the highest-earning age group in China and are looking for a new way of life. They typically live in the major cities in eastern China, in particular in Beijing, Shanghai, Shenzhen and Guangzhou - cities just a plane ride from Auckland.