Source: New Zealand Government
Kia ora koutou, good morning, and zao shang hao.
Thank you Fran for the opportunity to speak at the 2024 China Business Summit – it’s great to be here today.
I’d also like to acknowledge:
- Simon Bridges – CEO of the Auckland Chamber of Commerce.
- His Excellency Ambassador – Wang Xiaolong.
- Mayor of Auckland – Wayne Brown.
- Minister of Trade – Todd McClay, who will also be speaking to you later.
I am also delighted to see the strong turnout from across New Zealand’s business community at this China Business Summit.
The strength of the New Zealand economy is directly related to the success of our exporters and as every business leader here today will appreciate, the trade relationship between New Zealand and China is one of the most important we have.
Today I would like to speak to two areas of potential for the future of the New Zealand economy.
First, the critical role of our trade and economic ties with China – and the opportunities for growth and innovation in that relationship.
And second, our approach to assuring New Zealand’s prosperity and security and our engagement in the Indo-Pacific.
OUR TRADE AGENDA
Trade is the lifeblood of our economy, supporting a quarter of all jobs in New Zealand. For those working in export industries, their incomes are higher too – earning 7% more on average compared to other sectors.
Trade helps business too – exporting firms are 25% more productive and grow faster than non-exporting firms.
Those are the numbers – but they serve to underscore what we all know to be true from our own experiences: Kiwis are at our best when we back ourselves to compete on the world stage.
My government’s number one priority is rebuilding our economy – beating inflation and creating a platform for growth. My vision is to deliver a more dynamic, productive economy – with higher incomes and more opportunity here at home.
But to create that opportunity here at home, we need to be much more ambitious offshore. We need New Zealand to become an export powerhouse. That’s why we’ve set a target of doubling the value of our exports over the next ten years – hitting $190 billion in annual exports by 2034.
Yes, we’ll unleash our growth and trade-exposed industries at home – unshackling all those Kiwis building, growing, making and innovating new products for sale offshore. But we’ll also redouble our efforts offshore – creating the conditions for all those Kiwis hungry to compete on the world stage.
We will seek to expand our access to foreign markets – by pursuing new trade agreements and maximising the effectiveness of our existing trade frameworks. We will relentlessly pursue the resolution of the non-tariff barriers to trade that restrict access to overseas markets.
And we will celebrate and enhance New Zealand’s reputation as a great place to do business – attracting the investment, talent, and expertise required to supercharge our growth story in the coming years.
IMPORTANCE OF CHINA MARKET
The success of our trade relationship with China in recent years is to be celebrated.
Two-way trade hit NZ$38 billion last year – more than four times the total in 2008 when the New Zealand-China free trade agreement entered into force. And we are confident trade with China will grow – supporting our strategy to double exports in the next decade.
Thanks to our robust free-trade agreement, many of our exporters are now offered tariff-free access and a price premium over other markets.
China’s burgeoning middle class, with its hundreds of millions of discerning consumers, are in demand of exactly the quality products, brands, and experiences New Zealanders have to offer.
Of course, agriculture – particularly dairy, meat, and wood – still dominates our export offering to the China market.
But, as everyone in this room knows, China’s dynamism means it doesn’t stand still. And neither do our exporters. We have some great companies operating in China, and it’s incredible to see the opportunities they are realising today from staying nimble and competing hard to sell high-value products into a competitive market.
Take our pet food industry, which has blossomed in recent years, now worth almost $100 million in China – driven by exporters climbing the value chain in the Chinese market, not just growing volume.
Or the big potential in China’s video gaming sector, which is a global powerhouse. There’s real interest and excitement from Chinese consumers in the new ideas pouring out of our local gaming sector.
Yes – China’s economy faces headwinds, but the untapped potential across the country is still extraordinary.
We know Kiwi companies are competing hard in Beijing, Shanghai, and Guangzhou. But China’s scale and breadth shouldn’t be underestimated. There is rapid development – and with it, opportunities for New Zealand businesses – beyond the big three cities.
As purchasing power grows in Tier 2 and 3 cities, and as the wants and needs of China’s population continue to evolve, we expect to see an increase in demand for high quality food and health-focused products: sectors where New Zealand excels. And let’s not forget that an extraordinary 42% of all global e-commerce occurs in China.
I’m confident our export industries will capitalise on those opportunities with the same energy and dynamism they’ve shown in the Chinese market so far.
TRADE DIVERSIFICATION
But of course, like every other country, we have a responsibility to ensure our economy is resilient and adaptable – by developing a wide range of opportunities for trade and investment offshore.
That is the basis for our ‘China and…’ approach. Yes – our trade and economic relationship with China remains central to our prosperity, and the Government will continue to grow that relationship.
And we will also develop new partnerships offshore, building resilience and diversifying opportunity for New Zealand businesses.
It’s not about closing one door to open another, but opening every door possible – hustling to create the conditions for growth on the world stage that every Kiwi company deserves.
CHALLENGED WORLD
And right now, opening doors, building new relationships, and re-engaging with old friends is critical.
It’s clear the global outlook is increasingly challenging and unpredictable. The economic and security environment has become significantly more complex.
We face a global economy that is limping, not sprinting, as it continues to recover from the impacts of the COVID-19 pandemic. Enthusiasm for trade liberalisation is waning, with a trend away from the openness and globalisation that drove economic success since the 1990s.
In today’s world, security and economics are increasingly intertwined: you can’t have economic growth without security. Russia’s illegal invasion of Ukraine, the Israel-Hamas conflict, and Houthi attacks on shipping in the Red Sea all demonstrate the impact of conflict on supply chains, on inflation and on economic stability.
New Zealand is not isolated from the consequences of these events and trends. We can’t just “opt out” from the strategic issues the world and our region face. We need to navigate this new reality, guided by our interests, and informed by our values.
It’s why my Government is ambitious about being much more active in the Indo-Pacific. Yes – because that’s where our major trading partners are, but also because the security, stability, and prosperity of the Indo-Pacific region is essential to New Zealand’s future.
New Zealand cannot be a bystander; we need to be active and engaged in world affairs. How we engage internationally, and how we take our message to the world, is critical to our security and prosperity.
ENGAGEMENT SO FAR
That is why this Government is bringing more energy, more urgency, and a sharper focus to our foreign policy.
China has, of course, been a feature of my Government’s early international engagements, as befits its significance to our country.
In March this year I was pleased to spend time with China’s Foreign Minister Wang Yi as he visited New Zealand hosted by Winston Peters. And in April, the Minister for Trade Todd McClay visited China.
I look forward to a steady flow of high level visits between New Zealand and China continuing throughout this year. And I very much look forward to my first visit to China as Prime Minister.
We have also already stepped-up New Zealand’s engagement with some of our partners in South East Asia and with India. From Indonesia and Viet Nam, to the Philippines, the region represents some of the fastest growing economies in the world and presents compelling economic opportunities for New Zealand, especially given the long-standing and high quality trade agreements already in place with this region.
We want to work together to find solutions to strategic challenges. We want to showcase New Zealand’s role as a key partner, a sustainable tech innovator, a source of high-quality food, and an attractive destination for tourism, students and investment.
Whether that’s India, an emergent strategic relationship for us. Whether it’s partners in Canberra, London and Washington, traditional partners with which we share values and history. Or whether it’s in the Pacific, where our enduring partnerships are underpinned by direct engagement.
We want to elevate key relationships for New Zealand; not just for today and tomorrow, but to open doors and build connections that deliver for New Zealand in 10 and 20 years’ time.
ENGAGING WITH CHINA
And as we bring new energy to New Zealand’s engagement in our region and in the world, we will continue to prioritise and invest in discussion, dialogue, and exchange with China.
Engagement provides a critical platform for diplomatic dialogue, one that allows us to identify new opportunities where we can co-operate together. And a platform which allows us to navigate areas of difference openly, consistently, and professionally. Those discussions are not always easy, but they are essential.
Where New Zealand and China disagree and have different views, we will always act to preserve, protect, and promote our interests. Managing differences and divergent views is neither surprising, nor new, nor to be shied away from.
I strongly believe that our long-standing and mature relationship allows New Zealand and China to speak frankly, and constructively, where we have different views.
It is clear that as China’s power and influence have increased, so too have the areas of difference that we have had to navigate.
We have different political systems, with different starting assumptions and values. And so it is only natural that we speak to New Zealand’s core values, such as human rights, which we have consistently and predictably raised with China, and advocated publicly on.
New Zealand has always been an outward looking nation, and a nation of traders. To continue to do this successfully we need stability and security in the region. We need to continue to protect and strengthen the current international rules-based system that governs global affairs, and that both New Zealand and China have agreed to and have benefited from. Because stability is no longer guaranteed.
Over the last two years we have seen too many times that long-standing tensions can boil over into armed conflict, causing unimaginable suffering, insecurity, and heightened tension worldwide.
We are therefore concerned about rising regional tensions and increasing incidents that threaten peace, stability and prosperity closer to home, including in the South China Sea. We have made clear our expectation that all countries – including China – will comply with international law, particularly UNCLOS.
On these issues we must be clear that New Zealand’s interests and prosperity are directly at stake. Taking another example, a serious escalation in the Taiwan Strait would have profound consequences for New Zealand, our region, and the world.
CONCLUSION
New Zealand has a great future ahead of us and, in this, China remains a strong economic opportunity for kiwi firms and businesses.
We should celebrate our successes so far, but also aim to do more, to be better, and to be more prosperous and more ambitious – acting strategically and bringing intensity to meet our goal of doubling exports in the next decade.
We look forward to continuing to work closely with China, maintaining a constructive relationship, and pursuing opportunity and cooperation where it is in our joint interest – while also speaking frankly where we have different views.
Finally, thank you to all of you, whose efforts have fostered the understanding, trust, and cooperation that has been so critical to New Zealand achieving success in China.
It’s your determination that has driven so much prosperity and success in recent years. And it’s your efforts and expertise that will allow us to continue to create so much more opportunity both in China and around the region in the coming years.
Thank you – and with that we’ll move to questions.
