China is where it's at, and everybody wants a piece of the action.
Today prime minister John Key launched New Zealand's China Inc strategy, outlining five strategic goals for furthering New Zealand’s trade relationship with China.
These include building and maintaining a strong and resilient political relationship with China; doubling two-way trade from $10 to $20 million by 2015; grow service trade with China by increasing education by 20 percent and tourism by at least 60 percent; increasing two-way investment between the two countries; and increasing the number of high-quality science and technology collaborations between the two.
Key to that political relationship is the New Zealand China Council. The council will bring together business, public and academic leaders and act as a high-level bilateral partnership forum.
Since the FTA came into force, New Zealand exports have increased by 157 percent. Opportunities to increase trading lie in food (especially seafood) and wine, natural products and specialised manufacturing services.
New Zealand is still the only Western economy,that has an FTA in place with China.
"We have a strong relationship with China and have seen good growth in trade over the past few years," said Key.
There are 21,000 Chinese students enrolled in New Zealand’s schools and universities, estimated to add $600 million to the economy annually. The government aims to up this by increasing the number of Chinese students from 22 to 30 percent by 2015. Tourism, meanwhile, will get a boost by increasing the number of flights available to various Chinese cities and investing in promoting New Zealand to potential tourists.
Another part of the strategy relates to lifting direct investment, which is currently low. China only invested $US1.87 billion in New Zealand over 2010/11 despite overall investments totaling $60 billion. And New Zealand has currently $541 million invested in China, compared to $36 billion in Australia. It concludes New Zealand needs to build on successful investments between Fonterra, Rakon and Nuplex, which all have their own, or joint, operations in China.
New Zealand could also use the New Zealand China Strategic Research Alliance, which is jointly funded, to increase the number of research collaborations between countries. The alliance will identify a small number of suitable projects and fund these projects for $2 million over three years.