Speech to the China Business Summit
Kia ora koutou, da jia hao
It’s great to be back at this year’s China Business Summit.
I would first like to acknowledge Prime Minister Jacinda Ardern, former Prime Minister Helen Clark, His Excellency Ambassador Wang Xiaolong, and parliamentary colleagues both current and former the Right Honourable Winston Peters, the Honourable Gerry Brownlee, and the Honourable Shane Jones.
I would also like to thank Fran O’Sullivan, as well as Michael Barnett, who has recently finished in the role as CEO of the Auckland Business Chamber.
This year marks ten years since the first of these important summits were held. I congratulate you all on the perennial success and relevance that the China Business Summit enjoys.
Of course, 2022 is also the 50th Anniversary of Diplomatic Relations between Aotearoa New Zealand and China. Though - as the Prime Minister has mentioned - our relationship with China, and indeed our trade and economic ties, date back much further than that.
This year sees us navigating challenges, including the ongoing effects of the pandemic. But we are also seeing the possibility to reconnect, to re-open, and to look forward to the new opportunities that this brings.
In this context, the Government’s Trade Recovery Strategy, launched in 2020, has been updated in 2022 to best support businesses as they reconnect with partners, customers, and markets overseas.
This has been a key driver of the trade delegations the Prime Minister has led to Singapore, Japan, the United States and Australia so far this year, as well as, of course, her recent travel to the European Union and United Kingdom.
The strategy has a number of aims. It supports a recovery that promotes sustainable and inclusive trade, and lifts exporters’ capability and performance in markets. It aims to strengthen international and regional trade architecture. And we want to build resilience against future shocks.
The Trade Recovery Strategy builds on our Trade for All policy, which we continue to implement despite the challenges that have been posed in recent years.
We have supported NZTE through a funding boost from the Covid Recovery and Relief Fund. The boost has seen them expand from 700 to almost 1,400 Focus Companies, and roll-out digital resources and other services to companies of all sizes.
We continue to open new opportunities for our exporters. Over the last 12 months we have concluded FTAs with the United Kingdom and the European Union.
We have also seen the entry into force of our FTA Upgrade with China, along with the CPTPP and RCEP Agreements, which were concluded earlier under this Government.
These measures have all contributed to continued year-on-year growth in our goods exports since 2017 despite the challenging global environment.
In my role, I see first hand the vibrant and longstanding trade and economic links between New Zealand and China. These are, in large part, a testament to the success and expertise of many of you gathered in this room today.
In recent years, we have seen a remarkable level of innovation and resilience in our businesses. Though much of this has been borne out of necessity, the ability to adapt and evolve is a hallmark of a good business.
And it has been another busy year for the relationship, COVID limitations notwithstanding.
I have been pleased to connect regularly with my Chinese counterpart, Minister Wang Wentao, including our first in-person meeting in June in the sidelines of the WTO’s Twelfth Ministerial Conference. After many virtual meetings it was great to finally be able to shake hands – or at least bump elbows – in Geneva.
In April, I was also pleased to announce the entry into force of the Upgrade to the New Zealand-China Free Trade Agreement.
The Upgrade modernises our existing 2008 Agreement, ensuring it is still fit for purpose for today’s trading environment. Among other things, the Upgrade saw tariff elimination on 12 wood and paper products, improved customs procedures, and new commitments for trade in services.
Reflecting our ever-changing global trade environment, and determination to promote sustainable and inclusive trade, we also introduced new chapters to our FTA.
One is the Trade and Environment chapter, which demonstrates our commitment to cooperate on sustainable development. Another is the chapter on e-commerce – a platform which has only continued to grow in relevance in the years since 2008, when the FTA was originally signed.
There have been plenty of other shared successes over the past year. I’d like to briefly highlight some examples.
The first is our agricultural cooperation with China, which is long-standing and now spans a number of our major primary sectors.
Our Dairy Dialogue with China, for example, brings together government and industry representatives every two years to discuss opportunities and challenges for both countries’ dairy sectors. It continues to be an important forum in which to exchange views and stay connected, including during the pandemic.
Along with agriculture, we also have regular dialogues with China on fisheries and forestry related issues.
These primary sector dialogues are important strands in our relationship, and cover significant portions of our trade with China. These discussions also provide us with the opportunity to discuss shared challenges for our primary sectors and explore ways that we can work together using our respective expertise to solve them.
Some recent examples include improving each country’s understanding of changing regulatory environments, knowledge-sharing to progress our respective climate change obligations, as well as discussing ways to improve biosecurity management practices.
We’ve also developed exchanges at the technical level.
For example, for many years New Zealand has been involved in an experts’ working group with China focused on milk quality and safety issues.
This year, we have also established a similar experts’ group for the red meat sector. The sectors covered in these sorts of exchanges are wide-ranging, including for example equine health.
These kinds of programmes are hugely important for ensuring that New Zealand’s systems and standards are recognised and understood by one of our key partners.
I’d like to thank all of the industry groups and companies who continue to support our agricultural relationship with China. We look forward to expanding our cooperation which underpins and supports our trading relationship.
On the business and tech front, we’ve seen continued success too.
For example, Weta Workshop – which has seen continued growth in its China market and last year set up a wholly foreign-owned enterprise in China in response to Chinese demand for Weta products. Later this year Weta is also on track to launch an entertainment project with their Chinese partner in one of Asia’s largest shopping malls, in Hainan province.
Another company, Draw More Circles, which is based in Auckland has increased its brand presence in China with its high performance online golfing solution. Working with the China Golf Association and the China Ladies’ Professional Golf Association Tour, Draw More Circles has expanded its reach over the past year, launching new products for the Chinese market.
And finally, a standout in the agri-tech sector due to its reputation for innovative technology, Waikato Milking Systems has seen notable success in China. Its milking rotaries are now found in multiple provinces across the country to meet the growing demand for high quality, reliable milking equipment.
In a wider sense, we’ve continued to work together on regional and international fronts.
China and New Zealand are both parties to the Regional Comprehensive Economic Partnership – RCEP – which entered into force on 1 January this year. This mega-regional trade agreement deepens our trade and economic connections in the Indo-Pacific region.
RCEP forms an important part of our Trade Recovery Strategy’s efforts to contribute to building and strengthening regional trade architecture.
And, of course, we worked together during Aotearoa New Zealand’s APEC host year in 2021. It was the first ever fully virtual hosting of APEC and delivered the Aotearoa Plan of Action, which provides APEC’s work plan for the next two decades.
This includes a range of issues important to New Zealand, including economic and trade cooperation, climate change, and COVID response and recovery. We appreciated China’s constructive engagement on these valuable outcomes that position APEC well for the period ahead.
I would also like to recognise the importance of the China International Import Expo (CIIE). This is now in its fifth year. New Zealand businesses, supported by the New Zealand Government, have been at every Expo from when it first started in 2018.
The CIIE has been a key platform for showcasing the broad range of New Zealand offerings into the China market. So I am pleased that a number of New Zealand companies, including some of you gathered here today, will be participating in this year’s Expo.
Beyond China, we have also been busy working to take forward a wide range of priorities to advance Aotearoa New Zealand’s broader Trade Recovery Strategy.
Concluding free trade agreements with both the UK and the EU were significant achievements.
These agreements together cover markets that pre-COVID were worth $23.5 billion in annual trade, and will bring real benefits to businesses operating in or looking to expand into these markets once they enter into force.
And when these two FTAs are in place, nearly three quarters of New Zealand exports will be to economies covered by legally enforceable trade agreements.
Only five years ago that proportion was around half.
Recently, we have also welcomed the Indo-Pacific Economic Framework as an opportunity to strengthen economic cooperation and partnerships across our wider home region, including with the United States.
New Zealand also continues to pursue a policy of “open plurilateral trade agreements” - high quality agreements that other countries can join in areas of shared interest.
This includes the Agreement on Climate Change, Trade and Sustainability which is still under negotiation between New Zealand, Costa Rica, Fiji, Iceland, Norway, and Switzerland.
It also includes the Digital Economy Partnership Agreement (DEPA), between New Zealand, Singapore and Chile that helps exporters take advantage of the opportunities available through digital trade.
This approach also encompasses the work we do with Canada, Chile and Mexico through the Indigenous Trade Action Group and the various initiatives we have there.
New Zealand has all along supported the expansion of our network of plurilateral trade agreements to any economy that can meet their high standards. We have been pleased to see more trade partners expressing interest in joining these initiatives.
China has requested accession to both the DEPA as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and we welcome China’s interest.
CPTPP is a quality agreement that sets high standards for its 11 members, who account for 13.3 percent of global GDP. We welcome interest from economies that are willing and able to meet the high standards that CPTPP sets.
China’s accession requests for DEPA and CPTPP are now with the respective members to work through collectively.
In Geneva, we continue to be active at the World Trade Organization.
At the Twelfth Ministerial Conference in June we were pleased to achieve a meaningful outcome on pandemic response and I was honoured to be the Director General’s facilitator for the closing phase of the negotiation for the WTO Fish Subsidies Agreement – something New Zealand has been advocating for reform on for 20 years.
These outcomes underscore the continued importance of the multilateral approach, and the value of working together on pressing global issues. We will need to continue this spirit of cooperation in order to address other longstanding issues like agriculture and the role of environmentally harmful subsidies.
Whether representing New Zealand’s interests at the WTO, or negotiating, upgrading and implementing our free trade agreements around the world, our job is to create opportunities for you as New Zealand exporters.
Ultimately our goal is to give you strong, transparent trade rules and as many options as possible when it comes to export markets, to support your commercial decision making.
We are focused on resilience, and diversification is one way to build up the resilience of individual companies – and of the New Zealand economy as a whole – to withstand future economic shocks and mitigate risks.
As a Government we are focused on re-connecting New Zealand to the world, including China.
Yesterday, the border re-opened to remaining visa categories – marking the final step in our reconnecting with the post-COVID world. This is a significant step for restoring our links, and I’m confident that visitors to New Zealand will receive a warm welcome back.
For our services sectors, including international education and tourism, which have felt the heavy impacts of COVID-19 over the past two years, we’re conscious this is a particularly important milestone.
As our borders have re-opened, New Zealand’s air connectivity is improving, with the resumption of flights that existed pre-COVID, and even the launch of new flight routes to a number of global destinations.
Of course, we are still facing some headwinds.
The Government is very conscious of the impacts on global supply chains as a result of COVID-19 disruptions and the Russian invasion of Ukraine. We are monitoring these impacts, supporting businesses in navigating these, and working to build longer-term resilience.
In fact, work across government agencies – and with international partners, such as Australia and Singapore – to better understand and strengthen our international supply chains is a key part of building ‘resilience’ under the Trade Recovery Strategy.
Those of you who do business in China will be well aware of the challenge of balancing a ‘dynamic zero’ approach to COVID and stable economic growth.
We know from our own experience the challenges that managing COVID-19 can bring for productivity and supply chains.
When disruption is experienced in major manufacturing and logistics hubs, including in China, the impacts are felt across the globe.
We expect China’s border measures and quarantine requirements will continue for some time – though it has been encouraging to see a reduction in quarantine period in recent times. We look forward to a greater movement of people as both countries’ borders settings continue to ease.
This will provide an important boost for our services sector, in particular, when it comes. Three airlines are currently operating direct flights between New Zealand and China, with strong demand for cargo flights.
We look forward to furthering our recovery once passenger travel is able to resume with appropriate COVID-19 safety measures.
I would like to conclude by recognising China’s importance as a partner for New Zealand over the last 50 years. I do not doubt that it will be an important partner for the next 50 years as well.
You know as well as I do the challenges businesses face in the current environment.
Our Government is committed to supporting business through these turbulent times. And we will continue to invest in our trade and economic relationship with China, in the hope and expectation that it is one which continues to bring benefit to the people of both countries for a long time to come.
Thank you all. Xie xie