This decade is kindly sponsored by New Zealand Trade & Enterprise
On 22nd December 1972 New Zealand became the 38th country to recognize the People’s Republic of China.
Trade Overview
The early “Firsts”, China’s “Opening” and some of our “Pioneers”
Pei Jianzhang, the first Ambassador from the People’s Republic of China to New Zealand, presented his credentials on 16 May 1973 and the first New Zealand Ambassador to China – Bryce Harland, presented his credentials on 20 September 1973.
Joe Walding, Overseas Trade Minister and Associate Foreign Affairs Minister, made the first official visit from New Zealand to China in March 1973 followed by a Trade Mission in October of the same year.
Those who accompanied him on the mission included Charles Patrick, NZ Dairy Board; John Daniels, NZ Meat Producers Board; Francis Spackman, NZ Wool Board; Fred Turnosvky, NZ Manufacturers Federation; Ron Howell, Vadco Traders; Ron Trotter, Fletchers; Jack Evans, Dalgetys; and John Patterson, Pyne Gould Guiness.5 During this visit a Trade Agreement between New Zealand and China was signed.
Prime Minister Robert Muldoon became the first leader of New Zealand to visit China in April/May 1976, meeting with Chairman Mao Zedong. He was one of the last foreign leaders to do so and Mao died on 9th September 1976. On 28th July of that year there was a massive earthquake in northern China.
Following Mao’s death and some internal upheaval Deng Xiaoping became the Chinese leader in 1977. Late in 1978 China set a path of four modernisations in agriculture, industry, science and technology and defence that paved the way for an opening up of the Chinese market to international traders.
That year China established new export and import corporations and special economic zones, along with the China International Trust and Investment Corporation and New Zealand granted China developing country status -the first country to do so. This meant that 70 percent of China’s imports into NZ received a margin of preference.6
The New Zealand Deputy Prime Minister, Brian Talboys, accompanied by a group of leading businessmen, visited China in May 1979. This mission concluded there were good prospects for growth in existing trade as well as for co-operation in sectors such as agriculture, the steel industry, geothermal development, hotel construction and food processing.7
Prime Minister Muldoon made another visit in September of that year and met with Deng Xiaoping and Premier Zhao Ziyang.
In the June 1981 year China became New Zealand’s largest market for wool, a special and historical development for Roger Buchanan initially of the NZ Wool Marketing Corporation and following a merger in late 1977/early 1978, The New Zealand Wool Board. Roger first visited China in 1974 and is acclaimed for his role in growth of New Zealand’s wool exports over the decade and beyond. Roger was a frequent visitor to China (up to four times a year) while cementing a relationship with state owned Chinatex which purchased greasy wool from a number of well-established NZ exporters exclusively to produce handknitting yarns.8
Leo Tattersfield became a well-established wool exporter with connections in China through the Native Products and Animal By-products Corporation. Ron Howell – a long time importer from China through his company Vadco (which has since evolved into Macvad) was involved in wool exports. Ron went on to establish, with other China traders, New Zealand-China Trade Association (NZCTA) in 1981.9
Other companies and business people in both markets during this early period included Arthur Avis and Ewen Frampton of Colyer Watson, promoting the sales of Hides & Skins and Tallow; Gardner Smith supplying Tallow through their NZ storage tanks to Cereal, Oils and Foodstuffs Corporation (COFCO) in China;10 and NZ Forest Products exporting liner board and other forestry related products (utilising an office it established in Beijing).
Meanwhile the pioneer trader Vic Percival was importing amongst other items, cotton lint, textiles and chicken and duck feathers from China for supply to Arthur Ellis Bedding Company. It was Vic who instigated what became known as The Great Toilet Tissue Caper through imports from China.11
One of the early investments by New Zealand in China involved a NZ Wool Board project with Nantong No.2 Cotton Mill in south eastern Jiangsu province. Eventually formalised in September 1980 it was agreed that the Wool Board would assist in the selection and provide capital to import new spinning and associated equipment for the Mill to produce Shetland yarns while Nantong would contract to purchase a minimum of 850 tonnes of wool annually from New Zealand exporters.12
There was less success in investment from China. A Chinese investment in a wool scouring plant in Washdyke, South Canterbury was scuppered when central authorities baulked at autonomous importing of scoured wool.13
Agricultural development, played an important part in China’s modernisation programme. New Zealand companies and personnel involved in pasture, animal health, seeds and consulting began travelling into China’s rural areas to participate in agricultural projects. These included John Patterson of Pyne, Gould Guinness, and Mark O’Connor of a Hamilton based consulting company.14
Investment in pastoral farming had arguably the most success of any ventures into China during this decade. In response to China’s preference at the time to deal with only one representative of a New Zealand sector, the government encouraged the formation of a commercial consortium – China-NZ Agricultural Consultants Ltd – CHNZAGCO – which established model farms in the southern provinces of Guizhou and Guangxi.15
Read more about these farms in the 1983-1992 Overview.
Summary of the Decade
This first decade of the new diplomatic relationship moved the PRC from an economic backwater holding little interest for New Zealand traders to a lead position in consideration of new marketing opportunities, especially in the agricultural sector.
The pattern of trade that emerged highlighted a vulnerability of New Zealand exporters to China’s domestic economic reforms and reflected the huge difference in scale of the economies of the two countries.
It also set a course for the development of personal relationships between officials and traders of both nations that would nurture understandings of opportunities and limitations and set platforms for future growth.
More thoughts on this decade are included in “ Reflections on the Commercial Relationship 1973-2022” section – a collation of memories and experiences from various contributors who led or were involved in the trading relationship between New Zealand China over the last 50 years.
October 5, 1973
Read more on some of the organisations who were involved in the New Zealand- China business relationship during this decade below.
Notes:
1 Figures collated from New Zealand Official Yearbooks (1973-1985) in Chapters : Commodity Trade available at https://www.stats.govt.nz/indicators-and-snapshots/digitised-collections/yearbook-collection-18932012
2 ibid
3 Ibid
4 Ibid
5 List of delegation members kindly provided by Chris Elder (from memory) who was at the NZ Embassy in Beijing in 1973 and went on to become New Zealand Ambassador to China 1993-1998.
6 John McKinnon : Breaking the Mould : New Zealand’s Relations with China, – in New Zealand in World Affairs Vol. 3 Edited by Bruce Brown (The New Zealand Institute of International Affairs 1999) pages 245-246
7 New Zealand Official Yearbook 1980 https://www3.stats.govt.nz/New_Zealand_Official_Yearbooks/1980/NZOYB_1980.html?_ga=2.221731800.1730195811.1678740163-1844989538.1674507722#idchapter_1_162455
8 Roger Buchanan, Last Shepherd (Wellington, Mahico Ltd, 2012) 175-187
9 Bruce Kohn, The Kiwi Pathfinder : Opening Mao’s China to the West (Wellington: Grantham House, 2008) 31, 152
10 Ibid, 142
11 Ibid, 146-149
12 Roger Buchanan, Last Shepherd, 196-198
13 John McKinnon : Breaking the Mould, New Zealand in World Affairs Vol. 3, 248
14 Bruce Kohn, The Kiwi Pathfinder 142
15 John McKinnon : Breaking the Mould, New Zealand in World Affairs Vol.3, 248