China and New Zealand exports - an interview with the Rt Honourable Sir Don McKinnon

A love story? Flair ups and near misses with our largest trading partner highlight the fragile nature of the NZ-China relationship

In 2013, New Zealand’s exports to China were worth NZD$10billion. One year on, at a time when we have a two-way 2020 trade goal of NZD$30 billion, the demand is there and we have the supply – for now.

But it’s not all facts and figures when it comes to trade with China. We spoke to the Rt Honourable Sir Don McKinnon, Chairman of the New Zealand China Council and trustee of the Asia New Zealand Foundation, to get his views on what it will take to ensure New Zealand’s love story with China continues to bloom.

Sir Don has said elsewhere that 2014 marks the start of New Zealand’s China Century, stating that the super-power’s emergence as our largest trading partner is every bit as significant as Britain’s decline as our key trading partner in the 1970s.

But it’s the cultural significance of the new relationship that makes the shift so seismic – as Sir Don reveals when he says New Zealand’s relationship with China is ‘exceptionally good’, quoting President Xi Jingping, who recently said the relationship is “very, very good and a model for others”.

This is backed up by the increasingly strong trade and diplomatic relations between the two countries, with export and trade goals increasing each year.

But, like any happy family, the balance is in ensuring that no one party is too dependent on the other for their livelihood or security. And that is likely going to be New Zealand’s key concern going forward.

“We need to create Mandarin as an option for young learners – a serious option – at primary school and in those early years”

Dame Wendy Pye, Sunshine Books

“134 countries now have China as their No.1 trading partner or export destination – it's us in New Zealand who will have to do the most work on keeping it right. It’s we who have to avoid the surprises.”

Sir Don McKinnon, New Zealand China Council

Deepening understanding

Sir Don says that the opportunity, strength and challenge with China is all about widening, deepening and creating better understandings.

“There are still some sectors of our community that have little or no engagement and that could be a catalyst for unnecessary abrasiveness. Sectors that could benefit from more involvement with China include education, aviation, sciences, tourism, agritech, marine, investment and some areas of manufacturing.”

He adds that there have been a number of close calls that have threatened New Zealand’s relationship with China. These include the well-documented Fonterra’s melamine milk formula crisis in 2008 and the botulism scare just last year, showing just how simple it would be for relations and negotiations to sour.

In mid-2013, it came to light that thousands of tonnes of New Zealand meat products were being blocked from entry into China, with shipments going to waste on wharves over what appeared to be changes to product certification.

These instances highlighted the fragile nature of trading with China, and the power of traditional media and social media to create a frenzy – justified or not – about food safety.

Two months after the false-alarm botulism scare, one third of Chinese respondents who took part in a survey rated New Zealand food products as ‘not very safe’.

With perception a reality, New Zealand needs to be scrupulous about product safety and the messages Chinese markets receive, because the stakes are simply too high for us to jeopardise business with China over another false alarm or a misunderstanding over paperwork. Other countries, hungry to have closer trade ties with China, would jump at the chance to knock New Zealand out of the way.

Sir Don expands on this by saying: “There are at least 150 other countries, large and small, who would take advantage of gaps in the market created by New Zealand losing interest or intent with China. That then becomes a cost to the whole country. Selling things to other countries gives us economic growth and we all want higher standards of living.

Becoming a valuable contributor

Is there more to the China story than ensuring our food products are of a high quality, making sure the Prime Minister regularly gets over for visits, and not making any cultural faux pas?

Of course, says Sir Don. “The trick to maximising the FTA with China is to get the rest of the New Zealand economy pumping along in a high-value, sustainable manner.

“Few people realise that 50 years ago we had the same per-capita GDP as Australia. We are now 40% behind Australia. The little island of Singapore has twice our per capita income. Quite simply, we have not grown our income fast enough.

“While China is a giant of a partner for us, 134 countries also now have China as their number one trading partner or export destination. Therefore, it is us in New Zealand who will have to do the most work on keeping the relationship right. It is New Zealand that must avoid any surprises. We’ve got a formidable history of getting into new markets but we also need to avoid neglecting traditional markets, so the balance is in not putting all of our eggs into one basket.”

Talking point: to speak Mandarin, or not?

Dame Wendy Pye is an authority when it comes to teaching children to read and to learn languages.

Her publishing company, Sunshine Books, has reached all four corners of the globe with over 1800 education titles selling 218 million copies worldwide. But Dame Wendy is adamant that Kiwi children should be learning Mandarin – or at least given the opportunity to learn the language at school:

“We need to create Mandarin as an option for young learners – a serious option – at primary school and in those early years. I am keen to see real dialogue on this now, not in 15 years’ time. We need to be asking; what is the plan? And then let’s put it together. Perhaps the approach is in getting schools to spend an hour a week teaching the language and then setting 8 hours of homework – we need to start the conversation though.”

Sir Don adds: “We English-only speakers tend to be linguistically lazy. My personal view is we should all learn a reasonable amount of Maori in Primary school and then be encouraged, if not to keep it up, but to look at Mandarin or Bahasa or Japanese or Spanish or French or Arabic, or Russian. Remember we trade all over the world, and a tranche of young, next generation New Zealanders, linguistically more robust would be good for us all.”

Related Articles