John Key's visit to China

If New Zealand businesses had been hoping that Prime Minister John Key's recent visit to China would reveal the Middle Kingdom as the silver lining to an otherwise dark economic outlook, they were mistaken.

During Key's April visit, China revealed its lowest economic growth since records began, leading to speculation that China may be harder hit by the global recession than the United States and Europe.

However, despite the gloom and doom, the top-level visit of Key, Ethnic Affairs Minister Pansy Wong and leading New Zealand businesspeople did signal a new high in Sino-New Zealand relations, with Chinese leaders highlighting some ways in which New Zealand may help China's development, while at the same time enhancing New Zealand's reputation, which was jeopardised by Fonterra’s association with the tainted milk scandal.

The delegation met the Chinese top two officials and future leaders in Beijing, and talked business with Kiwi expats in Shanghai, before Key attended the Bo'ao Forum for Asia on South China's Hainan island.

In what was his first visit to China, Key met Chinese President Hu Jintao in Beijing's Great Hall of the People, had talks about improving trade and relations with Premier Wen Jiabao, and gave a speech at Peking University.

President Hu noted that Chinese-New Zealand relations had improved since diplomatic ties were established in 1972, particularly through co-operation on culture, education, science, technology and tourism. New Zealand was the first developed country to sign a bi-lateral free trade agreement (FTA), which, according to Hu, “has provided a mechanism and created favourable conditions for bi-lateral co-operation of mutual benefit”.

John Key said New Zealand was proud to take a lead in developing ties with China, noting how both economies were complementary and how the challenge was to covert the FTA into mutually beneficial implementation.

Premier Wen Jiabao said the Chinese-New Zealand relationship was “at its best in history” and suggested more exchanges, both high-level and personnel, as well as both nations working together to tackle the financial crisis and for “harmonious development” in the Asia-Pacific region.

There have been mixed fortunes for China-New Zealand trade over the last year. Despite earlier favourable agreements and a $5.6 million Tourism New Zealand marketing drive, visitor numbers from China were down 22% in the year to February 2009. And undeterred by the poisoned milk scandal involving Fonterra and its joint venture partner, Sanlu, dairy exports from New Zealand increased threefold in 2008 on the previous March year, rising to 160,000 tonnes. During the Beijing meetings, the Chinese leaders highlighted where they see New Zealand can play a role in China's future: farming, agriculture, forestry, environmental protection, energy conservation and food safety standards.

More high-profile visits will help realise the potential of the FTA, according to Peking University New Zealand Centre coordinator Stijn te Strake (whose liaison role will be taken over later this year by Charlie Gao of the Asia New Zealand Foundation’s Young Leaders Network). After seeing Key deliver an engaging speech at Peking University, te Strake says it is clear New Zealand is endeavouring to use the FTA as a platform to further engagement. “The Prime Minister expressed a firm long-term commitment to building a productive and stable relationship with China, based on common interests which will produce tangible results both in the short and long term.”

In Shanghai, the Prime Minister opened Trade New Zealand's business platform New Zealand Central, a home for Kiwi companies looking to find trade partners in China. The distinctively New Zealand business-to-business facility will also be used for promotional events, including those surrounding the $30 million New Zealand Pavilion (themed 'City of Nature: Living Between Land and Sky') at the World Expo in Shanghai in 2010.

Such initiatives will assist trade, maintains New Zealand China Trade Association (NZCTA) executive director David Catty, 'but ultimately the business sector – exporters and importers – has to leverage from these and create the actual trade base'.

He's already heard anecdotal accounts of exporters benefiting from the FTA, and believes the agreement with China will give New Zealand an advantage when many countries are reverting to protectionist measures. “The prospects of significantly enhanced trade over the longer term are very favourable.”

Another organisation to get a boost from the Prime Minister’s visit was KEA, a global talent network connecting New Zealanders around the world. With 1,000 members in China involved in trade, investment, education, tourism and migration, KEA China hosted the Prime Minister at a Business Breakfast.

His visit attracted a great deal of interest from New Zealanders living in China, according to KEA China regional manager Alexandra Middleton. “The Prime Minister discussed a number of important issues ranging from his level of confidence that New Zealand will move out of the recession to the importance of New Zealand's relationship with China. He was optimistic about New Zealand's future prospects, despite the slowdown, and saw the FTA as being a positive step in the right direction.”

by Jonathan Matheson in China

- Photos of Prime Minister Key's visit: Ian Llewellyn, NZPA (Ian travelled to China with support from Asia:NZ's media programme)

- Photos of New Zealand Central in Shanghai: NZTE