KEY POINTS:
It's nearly a century since the humble chinese gooseberry - what became the plump, rich kiwifruit we know today - made its way from China to New Zealand.
It was transported in the form of tiny, black seeds but it was not until 1924 that kiwifruit of the quality we might recognise today - the Hayward variety - were produced commercially and not until 1952 that they were exported. Now the kiwifruit is making a triumphant return to its original home.
New Zealand kiwifruit have been sold to China since 1993 but the free trade agreement offers unparalleled opportunities for expansion. Sales are already about $50 million a year.
Zespri International chairman Craig Greenlees said last month the FTA marked the start of a new era of partnership.
"China's agreement to reduce the 20 per cent tariff on kiwifruit to zero over the course of the next nine years by 2016 is a very significant achievement, one that will be worth many millions of dollars to the New Zealand kiwifruit industry over time," he said.
Zespri's general manager (strategy and business development) Peter Luxton said the FTA locked-in work the company was already undertaking and prepared the ground for the company to widen its relationship with China, including collaboration between Zespri, and New Zealand and Chinese growers and researchers.
"In one sense we are continuing as normal, as we anticipated the FTA was going to happen. In that sense it does not actually involve new strategy," he said.
"What we have got is a much more positive environment for doing business in China. We don't see China just as a market in itself."
Luxton said the business relationship would become more broadly based, with Zespri and other New Zealand operations like HortResearch working with the Chinese to bring quality fruit to China's growing middle class, perhaps as many as 130 million people.
"The new urban middle class are quality-conscious and savvy when it comes to the fruit area. The Chinese place considerable cultural importance on fruit," he said.
The significance of the "return" of the kiwifruit to its ancestral home is not lost on the Chinese.
Demand for green kiwifruit - the classic Hayward - is strong, accounting for five per cent of Zespri's sales and recording 50 per cent-plus year-on-year growth.
The gold kiwifruit, sweeter and more attractive to the Chinese palate, represents up to nine per cent of sales.
Despite such impressive growth, China and Taiwan rate a distant third behind the lucrative Japanese market (the top earner) and Korea.
The potential for long-term growth in the People's Republic, however, is huge as Zespri steadily expands its distribution network in China.
"There is a strong message in China through the FTA that New Zealand is an acceptable trading partner," Luxton said.
Zespri chief executive Tony Nowell predicted last month that China sales could account for up to 15 per cent of the company's total business by 2018.
"At such a level, the phasing-out of the existing 20 per cent tariff becomes very significant indeed," he said.
