Two years later New Zealand and Australia became the first western countries to be granted “Approval Destination Status” (ADS) by the Chinese government, a decision that opened the door for a surge of tourists from China. It was estimated that in the last year of this decade (2002) New Zealand received some 65,000 Chinese visitors – more than double the number from 2001.⁷

The increasing maturity of the trading arrangements between the two countries encouraged business investments. But success was hard to achieve for New Zealand companies.

In 1994 Fletcher Challenge Industries acquired a 58% interest in a joint venture with an iron works facility in Datong – investing $41 million to expand and upgrade the plant to produce steel. Following disappointing financial returns the joint venture came to an end by 1994 with the NZ company writing off its total investment.⁸

Lion Nathan became involved in the China brewery market in 1995. It made an initial investment of $21 million for a 60 per cent interest in a joint venture company which owned the Taihushui Brewery in Wuxi and followed up with construction of a brewery near Suzhou which opened in March 1998. The company ultimately sold its beer business to a local buyer.⁹

Richina opened Blue Zoo Peking Aquarium in 1997 and established a joint venture – Shanghai Richina Leather – to process imported hides and skins in China. Blue Zoo struggled to make a return on capital. The Shanghai leather business was hampered by internal problems of the New Zealand parent company.¹⁰

AFFCO’s foray into a meat processing facility in Chengdu began with a joint venture with a local Chinese company in 1998. The facility opened in 2000 but problems around the supply and procurement of livestock to slaughter led to AFFCO withdrawing a year later.¹¹

Chinese investments in New Zealand included Citic, which, in a consortium with Fletcher Forests and Brierley Investments, purchased the 165,000 hectare Government owned Kaingaroa Forest. Fletcher and Citic bought out Brierley’s stake in 1998 and created the Central North Island Forestry Partnership (CNFP) but by February 2001 following a slump in log prices CNFP was put into receivership.

Reasons for the inability of Kiwi businesses to make headway with their ventures into Chinese commerce were not hard to find. Some cited at the time included a lack of international experience, claimed complexities of operating with Chinese partners, misguided expectations of sales volumes, competitiveness of the Chinese consumer market when not selling a recognised brand and domestic competition. The commercial environment was often difficult for New Zealand companies to navigate. Financing was challenging and levels of financial reserves frequently were insufficient to withstand long drawn-out negotiations and time required to see desired results.¹²

There was success, however, for companies involved in importing from China. Advantages of low cost household products from China coupled to familiarity with their home market and less difficulties in cultural, bureaucratic and political procedures were plus factors for Kiwi traders.¹³