Transcript The New Zealand- China relationship

The New ZealandChina relationship
Material for New Zealand-China Council Delegation
China is a central part of a huge structural
shift in the global economy…
Source: OECD
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…and New Zealand is responding to that shift
Goods exports to China have risen
from $2 billion to $7 billion in 5
years during a global recession
Source: Statistics New Zealand
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From humble beginnings…
Source: Statistics New Zealand
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…China is NZ’s hottest export market and
eased the pain of the global financial crisis
China is responsible
for $4.9bn of NZ's
additional $9.5bn of
exports since 2007
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Trade is becoming more balanced
Source: Statistics New Zealand
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Strong growth in top 7 exports to China
Source: Statistics New Zealand
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An increasingly important source of imports…
Source: Statistics New Zealand
8
…that are used by households and New
Zealand firms for further production
Top 10 = ~82% of total
Source: Statistics New Zealand
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Exports of services are growing too: Chinese
tourism spending has risen strongly
Since GFC hit,
Chinese tourism
spending has risen
by $380 million.
Total spending by
all tourists fell by
$720 million.
10
Tourism market is changing rapidly, driven by
Chinese income growth
Expect visitors from China to double by 2018
New Zealand tourism
operators needs to think
carefully about Chinese
visitors’ demands
Source: NZIER, MBIE
11
Commercial services exports are small
but widespread and growing
Source: Statistics New Zealand
Overall, China is now New Zealand’s 3rd
largest services market, worth over $1
billion per year and growing
12
New Zealand remains a popular place for
Chinese students to learn
Chinese students accounted for $560 million of
GDP in 2011: 27% of the total GDP generated
by overseas students
Sources: http://www.educationcounts.govt.nz; Infometrics
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Investment has risen – both ways
Only 0.61% of New Zealand’s
total stock of foreign investment
is from China…
…compared with 16% of our
total imported goods
Of New Zealand’s total investment
abroad, China received 0.59% in
2012, up from 0.13% in 2007
Source: Statistics New Zealand
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FTA provides a competitive edge
•
•
•
•
Total trade with
Growth since Growth since
2000
2008
Growth since
2010
World
55%
2%
9%
China
411%
62%
26%
91% of tariff lines are duty free
By 2016, all imports from China will be duty free
By 2019, 96% of New Zealand exports will be duty free
Leaders’ goal of doubling exports within 5 years from
2010 is an ambitious but feasible target
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But FTA preferences won’t last forever: we
need to maximise our first-mover advantage
China’s signed
FTAs
In negotiation or
being considered*
ASEAN
GCC
Pakistan
Australia
Chile
Iceland
New Zealand
Norway
Singapore
SACU
Peru
India*
Hong Kong
Japan and Korea*
Macau
Switzerland*
Costa Rica
RCEP
Product
NZ FTA
tariff 2013,
2019
MFN
tariff
2013
Milk & cream
5%, 0%
10%
Kiwifruit
6.7%, 0%
20%
Chilled lamb
5%, 0%
15%
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Chinese economic challenges present
opportunities for New Zealand firms
Challenge
Potential implications for New Zealand
Environmental pressures
More demand for exports of environmental goods,
services and technology (e.g. energy-efficient materials)
Rapid urbanisation
Demand for New Zealand building products
Food security and availability
Food exports; technical cooperation to boost Chinese
agricultural productivity; greater ‘exports of experts’
Rebalancing of economy away from
investment towards consumption
Should boost Chinese demand for imports of
consumables, including foodstuffs, wine, fashion, etc.
Fiscal pressures related to
healthcare and education spending
Enhanced demand for health technologies, opportunities
for education via JVs/commercial presence
Regional integration models: TPP vs.
RCEP
New Zealand has a strong interest in TPP accession
clause accommodating future Chinese entry; can act as
neutral ‘bridge’ between RCEP and TPP
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Key takeouts
• The economic relationship has developed rapidly
and is maturing well
• It’s more than just goods exports – the services,
investment and people links are deepening
• The FTA has generated real momentum
• But preferential tariff advantage will be eroded
over time as both countries sign more FTAs with
other competitors
• Opportunities abound for New Zealand firms to
help address big structural challenges in China
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