Editorial: China links flourishing despite hiccups

Opinion

John Key's state visit to China was a potentially tricky one. The 12 months after the signing of a momentous free trade deal have not been plain sailing. Most notably, New Zealand was implicated in the contaminated milk scandal that swept through China, thanks to Fonterra's involvement in the now-bankrupt Sanlu joint venture. It is a feather in the cap of the Prime Minister and this country's diplomats that the Chinese say they see no reason to allow this issue to undermine relations.

Indeed, Beijing appears more than ready to continue to welcome this country's agricultural expertise, particularly in the development of food-safety standards. Mr Key acknowledged the commercial risk in this, but said it was well worth taking. If New Zealand is to take advantage of its favoured-nation status, that must be the case. Similarly, it must be prepared to invest substantially in China as the tariff conditions attached to the trading pact become ever more favourable.

The Prime Minister said he had also been told by President Hu Jintao that although China had been hurt by the global recession, it was committed to implementing the agreement on schedule. That was a significant statement from the leader of a country with a long-term protectionist impulse. It suggests the ongoing development of a trading relationship that has grown rapidly over the past year, including a 35 per cent increase in this country's exports to China. Paradoxically, Fonterra was one of the main beneficiaries as Chinese householders sought dairy products from safe countries.

Premier Wen Jiabao told Mr Key he regarded China's relationship with New Zealand as the "very, very best" it had been. It is reassuring that a tie skilfully built by the previous government continues to flourish despite some unforeseen hiccups.