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We are grateful for the following contributions from individuals willing to share their professional and personal experiences and reflections on their engagement in the New Zealand – China commercial relationship during the last 50 years. Their insights and impressions bring a valuable and unique perspective to this commemoration, unlikely to be replicated elsewhere.
NZCTA would like to acknowledge and thank all of the contributors who, in some cases have reached far back into their memories and taken the time to share their thoughts.
With many of the contributors having engaged with China on more than one occasion and over multiple years (and decades) it has not been possible to accurately list them in date order.
Chris Elder – New Zealand Ambassador to China (1993-1998)
As a language student in Hong Kong, I was lucky enough to be included in the first New Zealand trade mission to China, in October 1973. The mission was led by Minister of Overseas Trade Joe Walding, his second visit to the PRC that year (the first was in March, to establish a political dialogue in his role as Associate Minister of Foreign Affairs). My job as the most junior member of the trade mission was, among other things, to look after the luggage.
The luggage included not only the mission members’ bags, but also some representational items intended to add sparkle to various receptions the New Zealand side would host. Unfortunately, at the first transit point (Canton’s White Cloud airport) one crate suffered a close encounter with a front-end loader. While most of the contents (bottles of Scotch whisky) were salvaged, the crate itself was written off. It did, however, continue to have a phantom existence on the luggage manifesto. From then on, despite my best efforts, the mission’s progress was brought to a standstill at each destination, as the local hosts searched vainly for the missing crate. In each case their concern that the goods count was incomplete was clearly tempered by admiration that someone had managed to get off with a whole case of Scotch.
Despite my manifest failings as a luggage officer, delegation members were generous in sharing with me their knowledge and hopes for the trading relationship. One who stands out in my memory is Charles Patrick, then the International Manager of the New Zealand Dairy Board. Unlike many of his colleagues, Charles was not pursuing sales opportunities. His mission, he told me, was to seek out key players in the food sector, and say to them, “You aren’t ready to import dairy products now. But there will come a time when you are, and when that time comes we will still be around, and a lot of our competitors may not be”. I was back in China to see that time arrive in the 1990s, when Bob Major in Hong Kong spearheaded New Zealand’s large- scale entry into a market that was by then well and truly ready.
Joe Walding in fact anticipated changing tastes in China when the delegation was accorded a meeting with Li Xiannian, then the vice premier responsible for economic affairs. Vice Premier Li pointed out that the Chinese people did not have a tradition of eating some of the goods New Zealand exported, such as dairy products (“To us, it tastes like medicine”). Mr. Walding replied with some spirit (and indeed accuracy) that before coming to China, members of his delegation had not had a tradition of drinking maotai, but having tried it, many had come to seek it out wherever possible.
China’s attitude towards trade with other countries was ambivalent in the early 1970s. When I joined the embassy in Peking in 1974, I found myself witness to a debate between those who advocated a continuation of the tradition of self-reliance (in part forced upon China by American trade embargoes) and those who favoured more external trade. Nor was the country well positioned on the export front – Ron Howell, an early importer from China, told me that the quality of the first consignments he had received was “pretty rumpty”. The embassy monitored a gradually increasing disposition to export, accompanied by steadily growing attention to quality and presentation. China was making tentative steps into the world market, just as New Zealand was testing the water for exports to China.
In 1973, New Zealand set up embassies in both Moscow and Peking. The conventional wisdom at the time was that the Soviet Union offered much better trade prospects (although Peking was grudgingly equipped with a trade commissioner, Gerry Cheyne). Experience in the early years seemed to bear out this judgement. In 1974, New Zealand exports to China amounted to NZ $20 million. In the same year, the embassy welcomed just 200 New Zealand visitors to China, mostly members of friendship delegations. We saw our first challenge as being to create the conditions that would allow trade to flourish. We were mindful of the admonition Premier Chou Enlai had given Mr. Walding on his first visit, that China wanted to see a fully rounded relationship, not one that focused primarily on economic gain. We facilitated visits to and from the PRC – orchestras, acrobats, scientists, doctors, even potters – we arranged exhibitions, we encouraged senior Chinese political figures to visit New Zealand, and brought our own ministers to China. We set up student exchanges, in the hope that over time they would contribute to greater mutual understanding.
How times had changed by the time I returned to Peking (now Beijing) as ambassador in 1993. Trade had become central to the embassy’s operation. 1974’s $20 million worth of New Zealand exports had increased 20 years later to NZ$560 million (probably somewhere over $700 million counting the rampant smuggling going on through Hong Kong to Southern China). The nature of the economic relationship had broadened from almost exclusively trade in goods to include trade in services, two way investment, the sale (and sometimes the appropriation) of intellectual property rights. Chinese tourism to New Zealand began in earnest at that time with the negotiation of group visas for tour parties.
Sometimes New Zealand business groups wanted my advice, sometimes they just wanted my presence. I dispensed the latter with some caution, as there was (and perhaps still is) a tendency for the Chinese side to see government representation as amounting to a government guarantee. Nor was it always logistically easy in a country as big as China (“Can you pop over to Guangzhou?”, “Actually, Guangzhou is further from Beijing than Auckland is from Invercargill”, “Oh, really?”). I was once inveigled into travelling to Chongqing at short notice to attend the signing of a letter of intent. I arrived after dark, attended the signing and the post-match function, and flew out again at first light. I still haven’t seen Chongqing.
As a footnote, I recall one excellent piece of advice I was given during the bustle of my second tour in China. It came from a Singaporean business woman, who successfully opened hotels throughout China. At a time when most foreign businesses were drawing up agreements 80 to 100 pages long, she told me she signed papers of just three to four pages. “If both sides want it to work”, she said, “it will work. If they don’t, it won’t.” As true now as it was then.
Chris Elder trained as a Chinese linguist before serving in the New Zealand Embassy in Beijing when it first opened in the early 1970s. He returned to Beijing as Ambassador from 1993-1997. Other ambassadorial appointments were to Indonesia and to Russia. In Wellington, Chris served as the Deputy Secretary with responsibility for Asian affairs and security policy in the Asia-Pacific region. Chris has published a range of papers and articles relating to New Zealand’s interaction with China and with Asia. He co-authored with Michael Green a historical survey of New Zealand-China relations (New Zealand and China 1792-1972) and with Robert Ayson a Centre for Strategic Studies Discussion Paper, China’s Rise and New Zealand’s Interests: A Policy Primer for 2030.
Chris Elder trained as a Chinese linguist before serving in the New Zealand Embassy in Beijing when it first opened in the early 1970s. He returned to Beijing as Ambassador from 1993-1997. Other ambassadorial appointments were to Indonesia and to Russia. In Wellington, Chris served as the Deputy Secretary with responsibility for Asian affairs and security policy in the Asia-Pacific region. Chris has published a range of papers and articles relating to New Zealand’s interaction with China and with Asia. He co-authored with Michael Green a historical survey of New Zealand-China relations (New Zealand and China 1792-1972) and with Robert Ayson a Centre for Strategic Studies Discussion Paper, China’s Rise and New Zealand’s Interests: A Policy Primer for 2030.
Paul Clark – Chair Professor of Chinese in the School of Cultures, Languages and Linguistics University of Auckland. Director of North Asia CAPE (2018-2021)
1970s
Chinese families aspire to own a shared bicycle, a watch and a radio: the “three rounds” (including the radio speaker).
From late in the decade grass becomes a new feature in Beijing’s parks and other public spaces. Chairman Mao had been convinced that grass harboured insects that could harm production. Much of the new grass is from New Zealand seed imports.
In trade, the Dairy Board and NZ Forest Products show small-scale interest in large-scale China’s potential.
1980s
Permed hair, bell-bottomed trousers, sunglasses (with a label with Roman letters left on one lens), and “cowboy pants” (jeans), as markers of China’s widening engagement with the world, become ubiquitous in China’s cities. Families save for a TV set, refrigerator, electric fan and washing machine (preferably all imported brands).
New Zealander companies start to show an interest in the potential of the Chinese market, but efforts are patchy.
1990s
From mid-decade the Chinese economy starts to really take off. Chinese urban families venture into home-ownership, either buying the old place they already lived in or investing in new builds.
Several major New Zealand companies venture into investments in new plant in China. Results mostly fall far short of initial expectations.
2000s
A new century brings new ambitions, for China and for Chinese families. Overseas travel and education become attractive and possible. The Internet and mobile phones become must-haves and open up a world of connections and knowledge. Middle-class families save for a car (and put their names down in the associated license-plate lottery in anticipation).
New Zealand earns official kudos for its support of China’s aim to join the WTO. The FTA helps supercharge the growth of NZ exports to China. New Zealand rain, via the milking shed and abattoir, becomes a major provider of protein to Chinese consumers.
2010s
Middle-class Chinese consumers drive a shift from reliance on goods exports to the greater importance in the economy of domestic consumption.
New Zealand exporters identify opportunities to reach Chinese consumers beyond bulk goods exports and beyond the top-tier cities.
2020s
Chinese lifestyles are now powered by the mobile phone: in payments, reservations, food delivery, taxis, shopping and just about everything.
The Revised FTA widens the areas of potential NZ-China economic growth.
Paul Clark is a pioneer in the academic study of Chinese films. After completing a masters degree in New Zealand Māori history, he was one of the first three New Zealand students to go to Beijing on official exchange for two years study. His Harvard PhD thesis was on the Chinese film industry from 1949 to 1983. He has published books on Māori history, Chinese cinema, a cultural history of the Cultural Revolution, and on Chinese youth culture in 1968, 1988 and 2008. His current Mardsen Fund project is on changing leisure spaces in Beijing since 1949.
The following excerpts have been taken, with permission, from “Last Shepherd”, published in 2012. For a full account of his experiences in China viewers are encouraged to read “Last Shepherd” – Roger’s autobiography.
I made my first visit to China in 1974………and it was to become a focal point of a significant part of my professional career. It was a fascinating place to be operating, at such a time of international change in political and commercial relationships.
…..I was assigned the task of establishing relationships with key state organisations likely to influence future demand for New Zealand wool. Wool dominated New Zealand export’s to China and continued to do so for the next two decades.
We were a much larger supplier of wool to China than Australia but early on it was apparent this was not a position that could be sustained indefinitely….
Early wool exports from New Zealand were supplied exclusively to Chinatex – a state owned organisation who regularly purchased a small quantity of some of New Zealand’s best wools, to produce handknitting yarns.
My initial task was to see if Chinatex would be interested in a contractural relationship with the (then) Wool Marketing Corporation. Once it was clear they weren’t I concentrated on ways to broaden the range of end uses for our wool and to moving China towards scoured rather than greasy wool imports.
What an interesting journey the next twenty years proved to be.
From 1974 onwards I visited China about four times each year, relying initially upon my Chinese hosts for interpreters, who were of varying competence. By far the best Chinese interpreter I encountered was Shih Yousan, the personal assistant of Chinatex’s managing director Wang Mingjun. In those days textiles was China’s largest industry and Chinatex the only exporter and importer so they were possibly the largest commercial enterprise in the country.
In the 1970s and into the next decade a common sight was two or three women sitting on adjacent residential doorsteps, chattering away while knitting or unravelling old garments to recycle the wool. Interestingly, many seemed aware that New Zealand was where their wool came from, buy contrast Australian wool was unknown.
The Board’s first major attempt to move China beyond simply importing our greasy wool started with my visit in 1979 to a cotton mill located in Nantong, Jiangsu who were keen to diversify. Following lengthy negotiations it was agreed that the Wool Board would assist in the selection and provide capital to import new spinning and associated equipment to produce Shetland-style knitting yarns, with Nantong No2 Cotton Mill contracting to buy a minimum 850 tonnes annually from a group of New Zealand wool exporters for a specified number of years. The agreement I had negotiated, was formally signed off in September 1980 and the Board’s technical staff spent considerable time on site in Nantong helping install and commission the plant.
The Board’s Natong project gained much attention as it was one of China’s first foreign invested ventures, it was observed closely…………and it proved very successful.
In the eighties, the Board was able to cultivate a relationship with the Ministry of Textiles which was formalised in a Technical and Economic Co-operation Protocol first signed in 1984. This led to the Board investing in the establishment of a pilot wool processing plant at the Ministry’s Academy in Beijing, which regrettably was less successful than anticipated. But it did introduce some new products and provided an interface with sections of China’s wool processing industry the Board would not otherwise have been able to access.
….the breadth of the Board’s activities in the 1980’s meant it was increasingly difficult to maintain efficiency and be as effective as we wished from such a distance. After some discussion, the Department of Trade and Industry in 1989 agreed to the Board’s secondment of Mark Lewis (our China specialist) to the Department and he was then posted to the Embassy in Beijing as a trade commissioner.
After time it became apparent that the Board needed to establish an independent presence which it did with an office officially opened in Beijing in July 1993. Al Ross was appointed to manage the China operation and steadily built a significant team of Chinese specialists around him. The Board’s China programmes gained an even sharper New Zealand focus with the Wool Board’s launch in 1994 of the Wools of New Zealand brand and its exit from IWS interior textile marketing programmes.
With the establishment of the office and our take over of IWS’s international marketing, I progressively backed out of China operations……my principle involvement became access and quota issues…..
I had clocked up my 50th visit in the mid 1990’s so it was certainly time to move on. My lengthy involvement meant that media and government officials often asked me for comment on events in China.
China for me was a fantastic journey. Starting as it did in the mid 1970s during the reign of Chairman Mao and then running the Board’s Chinese operations for two decades, I witnessed extraordinary change. In my time China moved from being a small, state dictated trading partner to being overwhelmingly New Zealand’s largest wool export market.
Roger Buchanan had a long career with the Wool Commission, Wool Marketing Corporation and Wool Board – being the last Chief Executive of Board. For much of his career Roger was involved in overseas promotion of New Zealand wool and was one of New Zealand’s early “China hands” visiting the market over 50 times.
Bruce Kohn – Foreign Correspondent for the New Zealand Press Association Hong Kong and East Asia (1977-1981)
1970s
Effort, sweat, frustration, amazement, and delight mixed with a leavening of liquor characterised the daily experiences of New Zealand’s early China traders. Vic Percival, John Patterson, Roger Buchanan, Arthur Avis and Euan Frampton, Ron Howell and Mark Connor were among those who grappled with China’s unique administrative rules. Their search for sales often meant long distances of travel by fledgling airlines with flexible arrival and departure times; misunderstandings in translation of spoken words; advice from official after official that a person higher in ranking should be seen before a trade arrangement could be finalised; regular encounters with Chinese people in rural districts who had never before encountered a person of white skin and hairy arms; and Chinese dialects beyond the rudimentary Mandarin or Cantonese that they understood.
Restrictions on the movement of foreigners meant evening contact was generally confined to official functions or business dinners. But their grit, their patience and the tension lightening qualities of an evening gin and tonic or whisky, usually taken into China with them because of non-availability at Chinese guest houses and hotels, were elements in their process of contact making. Arthur Avis and Euan Frampton relaxed on evenings in the People’s Hotel in Beijing by playing snooker with the only available egg shaped balls on the billiard table; Victor Percival endured treatment with horse medicine for an ailment in Fujian province; and Mark O’Connor persisted for days to successfully convince a rural community in Sichuan that sheep would not increase in weight if made to walk five kilometres every morning to pasture and a similar distance back to a home barn at night.
Trade missions of Ministers Walding and Talboys enabled official and formal mingling in Beijing with high level Chinese Ministers, diplomats and trade officials. Banquets at the Great Hall of the People and in provincial capitals helped in providing them with an understanding of what might and might not be possible to further two-way trade. Contacts made at regional levels frequently turned out to be of special significance in later decades as provincial committee members moved to positions of influence within the central government.
1980s
Greater knowledge of Chinese customs, procedures, regulation and formal hierarchies enabled the early pioneering traders of New Zealand to build on the relationships built up in the prior decade. Chinese officials too were also becoming accustomed to the more informal and practical approaches of the Kiwi newcomers to their needs. Both sides benefitted significantly from the high political level interchanges that took place between the governments of the two countries, with the blessing of Ministerial approval for contact with the visitors proving a valuable catalyst for Chinese officialdom to become positively involved. The modernisation taking place in China under the -post-Mao regime made travel within the PRC much easier, in marked contrast to the experiences encountered by the pioneers.
1990s
Limitations of cultural understanding and financial strength hampered the ability of New Zealand businesses to fully take advantage of the openings into China that the early pioneers had opened up. But the developments of services trade through students and education indicated an area of export for New Zealand that in early years of the relationship had not been fully identified. Signs became evident that the following decade would see these avenues of reward assuming more prominence while agricultural and horticultural exports underpinned export trade. Equilibrium in the trade balance indicated New Zealand consumers and businesses had accepted Chinese industrial products and consumables as both price competitive and of acceptable quality.
Bruce Kohn also had postings for NZ Press Association in London and Washington DC and became economics and business editor for Wellington’s Evening Post. He travelled extensively in China during the years of transition from Mao to Deng Xiaoping giving him rare insights into China and the international traders to China that emerged. A close friend of the late Vic Percival, Bruce authored “The Kiwi Pathfinder : Opening Mao’s China to the West” the story of Vic Percival’s journey in China.
Michael Powles : New Zealand Ambassador to China (1990-1993)
Excerpts from Encountering China : Edited by Duncan Campbell & Brian Moloughney, Massey University Press, Auckland (2022). Chapter- China, A Tired Old Country ? The Dangers of Group Thinking. Michael Powles 68-69 reprinted with permission.
In 1990, I was invited with other Ambassadors in Beijing to join an official tour of the Pudong area, then a scruffy wasteland. Our host was a Shanghai vice mayor, who explained in detail the startingly ambitious plans for the development of the area into one of Asia’s key financial centres. When they could do so unheard, and sometimes even when they were heard, the visiting ambassadors laughed at the ridiculousness of what was proposed : the consensus of the group, including several serious China scholars, was that there was no way China could organize itself to create the financial centre described to us. But, a few years later, it had.
..visiting a geothermal power station in Tibet, not far from Lhasa, some of whose engineers had been trained in New Zealand, I noticed three generators in the power hall. I asked why only one was working, and was told that of the other two, one was Japanese and one was Italian. They both functioned only moderately well. But their own (New Zealand-trained) engineers had studied them and built a new machine incorporating the best of both foreign generators. It easily outperformed them. In addition, Chinese progress in a variety of technical fields, from rocketry to electric cars to the plethora of high speed trains which now criss-cross the country, speaks for itself.
Michael Powles headed New Zealand diplomatic posts in the Asia (as New Zealand Ambassador to China, and before that, as Ambassador to Indonesia) and the Pacific (as High Commissioner to Fiji, Kiribati, Nauru and Tuvalu). He was Deputy Secretary of New Zealand’s Ministry of Foreign Affairs and Trade and then New Zealand Ambassador to the United Nations in New York. After retirement from the foreign service he served as a Human Rights Commissioner for four years. He was also founding chairman of the Pacific Cooperation Foundation. From 2005 to 2008 he worked as an Adjunct Professor at Fudan University while living in Shanghai. Later, he was President of the United Nations Association of NZ and is currently President of the New Zealand China Friendship Society (Wellington).
Grant Fuller – NZTE Business Development Manager, Beijing (1994-1996) and NZTE Trade Commissioner, Shanghai (2000-2004)
I had the opportunity to live and work in China across three decades and three different cities (Beijing, Shanghai and Guangzhou).
One could argue the physical transformation of Shanghai city in the early 2000’s is unlikely to repeated ever again. The share size and scale of the infrastructure development that took place during this period was at times unbelievable and world class (meanwhile Auckland has been deliberating over a second harbour crossing for 40+ years).
I recall going to Beijing in 1994, not long out of university and at that time China still had a low profile in terms of an export market. Plucked out of a Christchurch summer to arrive in Beijing mid-January to minus 15-degree temperatures is a lasting memory. As is my first New Zealand client visit one week later where I was tasked to assist New Zealand’s leading bath and shower manufacturer find a distribution partner in Beijing. Back in 1994 most roads lead to companies owned by the army, as was the case with this New Zealand bath and shower manufacturer’s partner. To celebrate the signing of a distribution agreement between the New Zealand company and the Beijing company (owned by the PLA) we went out for lunch. This was my first real experience of a celebratory lunch in China, where there was myself, the representative from the New Zealand company and 10 from the Chinese company. After several exotic dishes, multiple maotai shots (10 vs 2) and lively conversation, I recall the discussion turned to New Zealand deer (Cervena was a big thing at the time). At which point I decided I would run around the restaurant (packed at lunch time) pretending to be a deer, followed closely by one of our new PLA friends (in full army kit) who would pretend to shoot me and I would fall down, much to the applause of the those enjoying their lunch! Anyway, I recall waking up in my apartment that afternoon, no client, no brief case and trying to piece together the last 3-4 hours. I called my boss (landline no mobiles in those days), I nervously said I am so sorry, I have mucked up big time, at which point he said Grant, you did an amazing job, the New Zealand company is delighted with the service and by the way “welcome to China”. I was reunited with the New Zealand client (and my briefcase) later that afternoon back at the Beijing Hilton hotel where we apparently went back to after lunch to enjoy a further celebratory cold one. So many stories and amazing times from meeting Jack Ma back in early 2000 (Jack rowed me out to the middle of Lake Xihu to enjoy some tea and to discuss this idea of an ecommerce platform – if only I put in a lazy RMB 100 at the time), to being mistaken as New Zealand’s Trade Minister and handed the welcome flowers on arrival at the Shanghai hotel etc.
Jim Tait – NZTE Trade Commissioner to Shanghai (1995-1997) and Beijing (1999-2002)
This was a time of great change. The trade office had been split. Previously the TC had been Consul General but MFAT put in John McArthur as CG and I went as Dep CG and TC. It was the tail end of the first stage of economic reforms with privatization of parts of SOE’s and the town and village enterprises (which had grown out of the old commune work brigades), with more imports allowed and with the formation of joint ventures. It was a wild west and no one quite knew what the rules were and how they would be interpreted
A lot of the time was spent explaining to NZ exporters how the market worked – and trying to check who they were dealing with as they were being contacted by all sorts of people wanting the exclusive rights to China.
The two things I remember about Beijing were education and Jim Sutton’s trade missions.
Education
After Tiananmen in 1989 NZ stopped Chinese students coming to NZ to study but by the late 1990’s there was pressure to let in Chinese students – so the trade offices in China had to be prepared.
After Shanghai I was dealing with education so either late 1998 or early 1999 (I cannot remember) I went up to Hong Kong and we bought in one TDE from Beijing, Shanghai and Guangzhou and we also bought in the education TDE from Taipei and Hong Kong and Don MacLean and I spent a few days long with the HK and Taipei TDE’s going over every aspect of promoting NZ as an education destination. And once NZ opened to Chinese students the market boomed and we had education fairs and education seminars all over, usually in association with NZ institutions and their Chinese agents who would organize them. Some were large – one NZ seminar in Harbin was several hundred students and parents. A NZ fair in Wuhan and something like 20-25 NZ schools and intuitions. Every week in the Embassy there would be an education afternoon when anything up to 50 students would turn up.
Jim Sutton’s trade missions
Jim Sutton was Minister of Overseas Trade and Minister of Agriculture. He took it into his head to do one trade mission a year to China – but to “open up new markets”. So he wanted to go to parts less visited by exporters.
He did one to hinterland in the provinces around Guangzhou where the focus was agricultural technology and which Don dealt with and two in the area covered by Beijing.
One was to the northeast from Dalian to Harbin where a lot of NZ meat, seafood and wood was going in for processing – and also dairy cows though the mission did not look at that.
The other was to the south east – Chongqing and Chengdu. In Chongqing NZ was trying to sell CNG refueling systems for buses and in Chengdu Bill Sharpe had his beef processing JV. I cannot remember why else we went there. In all cases Jim Sutton came with half a dozen exporters – some new to market and some already in the market being visited. All wanted their own program plus where appropriate to be fitted in to the Ministers program which was organized by MFAT. There was also all the logistics of transport and accommodation. These places are not exactly next door – Chengdu is about 1800km from Beijing and Harbin is about 1300km.
At the same time there was the normal day to day stuff going on – research reports in other areas, visiting exporters etc.
The nineties were dominated by a series of decisions that led to an opening up of the relationship between New Zealand and China, which laid the foundation for the next two and a half decades of development. Notably the leadership of PM Jim Bolger, Lockwood Smith, myself and an army of public servants who worked on WTO development and the importance of China’s inclusion in the rules based system, led us to be the first developed economy to support China’s accession to the WTO. This was followed by a huge campaign parallel to our preparation for APEC where I took the leadership role in persuading or putting the case to multiple APEC leaders including a visit to President Clinton to see what progress could be made. These conversations flowed through to APEC. At our invitation and prompting China and the US took the opportunity for a side meeting between President Jiang Zemin and President Clinton to occur in Auckland at Government House as part of the APEC meeting to discuss China’s accession to the WTO. The rest is history in terms of Chinas admission to the WTO, an achievement that benefited New Zealand and we played an important part in contributing to.
Second good example was the opening up of the education stream that allowed Chinese students to study in New Zealand. In the late nineties the numbers were high restricted and when officials were challenged, there was no good reason why we were limiting the potential economic development of New Zealand’s education system and earnings capacity. This led to decisions to open the numbers up dramatically. The subsequent development was an enormous assistance to many educational institutions across New Zealand, but also of significant benefit to New Zealand students in my opinion, that allowed them to understand the emerging global economic and social environment in a way that would not otherwise have been possible.
1990s Company activity that required political intervention.
The company issues that dominated the nineties were generally the producer boards. In one of my state visits to China the outstanding matters of the wool industry required political intervention, it was the subject of specific talks and again demonstrated the value of face-to-face engagement and exchange. These matters were able to be resolved and appropriately progressed.
Free Trade Agreement in the making
During APEC a further relationship breakthrough occurred in the bi-lateral between myself and President Jiang Zemin. At that stage New Zealand was advancing the case for free trade agreements and had made progress with Singapore and Chile. We were interested in trying to encourage countries to meet WTO standards and where possible then to collaborate with them. I raised the issue with President Jiang Zemin and put the case that we were small and did not pose a threat in exploring this issue. He agreed that the initial study would be undertaken, which subsequently led to the Free Trade Agreement between New Zealand and China. Martin Weavers and others who were present picked up the opportunity and drove it appropriately across the public sector to the huge benefit of us all.
Changes I have observed in China over 28 years
I have been fortunate to visit China on many occasions. My first in 1995 leading the delegation to the World Women’s Leaders Conference in Beijing. During my political career I visited China on a number of occasions and post politics have had the privilege of visiting many provinces. There is a huge change in the China of the nineteen nineties and today albeit that change continues. Having visited China over a hundred times and experienced interactions at multiple levels, including with my two adult children, both of whom lived in China for a period of time. The dramatic evolution of the social, cultural, and economic status of people and the lifting of people out of poverty, the broadening of the middle class, have been overwhelmingly dominant.
My Personal engagement in China post politics
I have been a director on a number of public and private companies who have and continue to do business across the NZ China relationship.
I served as a director on China Construction Banks global Board and chaired the CCBNZ Branch through its establishment period.
I remain engaged in China as a director of the Boao Forum. I have held this role for over ten years and remain deeply engaged in its work programme. It continues to be a highly progressive international forum which explores and challenges the global issues of the times. The President and Premiere attend and engage with political and global corporate leaders. New Zealand is a foundation member of the Boao Forum. However, to my great disappointment, takes very little active interest in its activities. By contrast Australia is highly active at the political and business level.
I am also a director of the International Finance Forum based on Guangzhou and currently co-chair the sustainable development initiatives for that organisation. It meets regularly at least on an annual basis and in particular has been focussing in the last three years on green finance, which is rich and important vein of evolution and development which is having a big impact in a range of economies, including China’s that is bringing the circular economy to a high degree of sophistication as they utilise energy and minimise both pollution and emissions.
Key political events and relationships
Our engagement with China during the Asian Crisis was extremely significant. I remember important meetings with Premiere Zhu Rongji exploring the importance of China not devaluing its currency because of the impact it would have on the small economies of the Asia Pacific region. These were detailed and exacting conversations but to China’s great credit, they did not devalue and so economies like New Zealand’s were able to recover more quickly than might otherwise have been the case had an opportunistic series of devaluations taken place.
I’ve remained in contact with Zhu Rongji and had the great privilege of meeting him and his family in a private meeting in Shanghai three years ago. He remains an extraordinary intellect with a deep insight into the global economy and a wicked sense of humour that he retained along with a rich memory of his interaction with New Zealand.
The future of business relationship with China
The future of business relationship with China relies on two things.
Firstly, the ability of respective governments to remain engaged and to separate issues of business potential and geo-political complexity. New Zealand has successfully retained our independent foreign policy position with China over many years and should continue to do so. We have and will continue to trade with people who do not necessarily share our political and social aspirations and values. However, it doesn’t limit our ability to act with astute diplomacy, working with them constructively and sharing our views and concerns because we are engaged with them face to face, while still being able to engage in a successful and meaningful economic, social and cultural dialogue.
China’s middle class is and will remain a dominant feature driving global demand and expanding steadily as a proportion of global GDPas will other Southeast Asian countries. It would be an extraordinary blind spot if New Zealand’s naivety around geo-politics led it to disengage in any significant way. That doesn’t limit the fact that further diversification into global markets needs to occur, but I would caution getting caught up in any movement that would result in an arbitrary withdrawal from the China relationship for no good reason.
Secondly, to do business with China you need to understand the Chinese perspective and be fully conversant with the regulatory and compliance requirements. A range of experiences of Chinese consumers has led China to have very particular views on processing, packaging, content, presentation and from time to time will use that in a sanitary or phyto-sanitary protection or pause sense which from a New Zealand perspective can be highly disruptive. However, China is a large market and will dictate its own terms and New Zealand companies must invest sufficiently well in both relationship management, technical analysis of the regulators, their port requirements, their logistics requirements, their distribution requirements along with the departure standards from New Zealand markets in order to succeed. In my observation over the last twenty five years a number of companies have not understood that they needed capacity to invest in these areas and have suffered the consequences from that.
John McKinnon – New Zealand Ambassador to China (2001-2004 and 2015-2017)
During the first fifty years of New Zealand’s relationship with the People’s Republic of China I have spent 10 years or so in Beijing on three separate occasions, each time at our embassy in Beijing.
During that time, New Zealand’s economic interactions with China increased by leaps and bounds, so that in 2022 China is by far and away New Zealand’s leading trade partner, and a significant participant in New Zealand’s economy.
Many businesses and firms have contributed to that trajectory and many of them are highlighted in this narrative of ’50 for 50’.
Fonterra’s dairy products and Zespri’s kiwifruit are now very well known in China. It was not always so. In the 1970s, the Chinese lineage of New Zealand’s kiwifruit became a subject of scholarly investigation. That before 1960 kiwifruit were known in New Zealand as ‘Chinese gooseberries’ reminded those of us old enough to remember that the kiwifruit did originate in China. But China has also been generous enough to recognise that it was New Zealand which has developed and continues to develop the original ‘monkey peach’ into the global phenomenon it is today.
Dairy products have had a similar path. As Chinese tastes have developed and altered, Fonterra has been there to provide the ingredients or products to meet changing consumer demands.
But there is so much more. As ambassador twice in Beijing, I much enjoyed representing New Zealand at business events. That many of them involved food and wine made it all the more pleasurable. But that could trip me up. One day I had to promote New Zealand green lipped mussels. I did so even though I myself have an allergy to mussels. Fortunately my wife, who accompanied me on this occasion did not, so even if my consumption of mussels was limited, hers was not.
My visit to the seafood fair in Qingdao, with many Maori businesses led by then Minister for Maori Development, Te Ururoa Flavell, was noteworthy not just for the amazing array of seafood on offer, but because I was presented with a bottle of Qingdao Beer with my photograph on the label. China produces much of its own beer – Qingdao is one of the few national brands – but New Zealand beer is coming in close behind.
Chinese enthusiasm for New Zealand’s scenery owed much to Lord of the Rings and The Hobbit, filmed in our country by Sir Peter Jackson. I vividly recall being visited by a group of young men, dressed in appropriate costume, who wished to pay their respects to the ambassador of “Middle Earth”. I was as close as they could come to that mythical personage.
The contribution of creative industries over those 50 years has involved many more. Weta Digital, Pukeko Films, NHNZ, are amongst a number of businesses which have found China to be a rewarding and fascinating market.
The number of Chinese students in New Zealand increased over the years. Many high schools and universities were energetic in seeking out candidates for study in our country. For Chinese parents, thinking about the future of often their only child, the attractions of an English language education in a safe beautiful environment were compelling.
So there is much to celebrate in our last 50 years, and businesses in both New Zealand and China have made a major contribution to that. Long may they continue to do so.
John McKinnon’s first posting to Beijing was in 1978. He was appointed New Zealand’s Deputy Permanent Representative to the United Nations in 1992, he became the Director the External Assessment Bureau in 1995 and then New Zealand Ambassador to China in 2001. Following his return to New Zealand he became Deputy Secretary of MFAT, then Chief Executive of the Ministry of Defence from 2006-2012, Executive Director of Asia-New Zealand Foundation from 2012-2014 before taking up his second posting as Ambassador to China from 2015-2017. He is currently the Chair of the New Zealand China Council.
Jonathan Watt – NZTE Trade Commissioner to Beijing (1995-1999 and 2005-2009)
I have two pivotal memories of my time working in China, one from each of my two postings. The first was being on hand to support the opening of the NZ education sector to Chinese students. We started with a quota of 200 places but very quickly it was obvious that would not be sufficient, doubling to 400 places didn’t suffice so the quota was removed entirely before long and the Chinese student market took off. Then on my second tour, it was all about being on hand in the lead up to and signing of the NZ China Free Trade Agreement in 2008. From memory we managed to get around 200 NZ business people to come to Beijing to witness the FTA signing in the Great Hall of the People – at the time it was reportedly the largest trade mission to have departed NZ. Two way trade hasn’t looked back.”
Don Graham – Managing Director Primary Sales Link (1997-2008) and Managing Director William Aitken & Co (2009-2021)
The Canton Fair
I started attending the Canton fair in 1999 and found a large laundry powder factory. The following year I was looking for a nappy company and attended the Canton fair and made my choice from over 30 Nappy companies. Then Wet wipes, toothbrushes, biscuits, canned flavoured water, dried fruit, toilet soap, feminine Hygiene, fabric softener, chocolates, liquid laundry, tissues, foil, plastic wrap and many more.
I had over 16 companies all spread all over China but every October they all exhibited at the Canton fair. So around March/April each year I would spend 3-4 weeks visiting every supplier at their factories. Then in October I would go specifically to the Canton fair for 5 days, firstly to look for more opportunities followed by individual meetings with my present suppliers, all who were at the Canton fair.
The Canton fair is huge, and exhibitors are blocked together. For instance there are 20 plus toothbrush manufacturer in one section. This means if one company has a new innovation, I could be certain that my supplier would follow. Also strategically you could share a container if necessary if say a toothbrush and a toilet soap manufacturer was from the same city. This would only happen in the early days when volumes might be low, and the product needed to be established in NZ.
I don’t know any grocery people that went to the Fair, but I did meet a Kiwi who was buying headstones which were 70% cheaper than the headstones that he brought in NZ. I also meet a chap from Aunt Bettys puddings that brough a packing machine that was better and 50% cheaper that an equivalent German packing machine that he was intending to buy until he went to the Canton fair.
absolutely loved attending the Canton fair, its run like a well-oiled machine! The Canton fair offered everything I needed, and every exhibitor has an export person that speaks English!
Also, I used to stay at the Pearl hotel in Guangzhou . Each morning when the Canton fair was on, I boarded a ferry next to the Pearl hotel and had a cooked breakfast on it, as I travelled to the fair. It took about 45 minutes and saved car/bus travel.
If I could offer advice to anyone attending is that the Chinese will always find a way to manufacture exactly what the customer needs. They never say NO to anything.
Alistair Crozier : New Zealand Education Counsellor to China (2003-05)
NZ-China Education: Managing opportunities and challenges in the 2000s
New Zealand began welcoming Chinese students in numbers in the 1990s. By the early 2000s a steady stream had turned into a torrent – well above 30,000 students per year. The type of students who travelled to New Zealand also evolved. While we still welcomed top post-graduate students on Chinese or New Zealand Government scholarships, many more came under their own steam – the result of increased household wealth and more relaxed rules on applying for a Chinese passport.
Overseas study has long had status in Chinese society (and a high chance of immigration, or good employment back home, at the end of it). For some families, it also became a handy ‘second chance’ for offspring who were not performing well in the Chinese education system. Many of these students could not gain immediate entry into NZ universities and institutes of technology, so arrived in New Zealand to study English at numerous private schools (“PTEs”) set up to cater for them. Others of course already had very good English and studied very successfully at our secondary and tertiary institutions from the outset.
Our institutions welcomed the international fees revenue of the Chinese students they enrolled – and students from other countries of course, but by the year 2000 China was far and away the largest source of New Zealand’s international students.
Despite all the positives, however, not everything went well. PTEs were of varying quality and professionalism – at their worst offering absentee students a channel to enter New Zealand for other purposes. In the early 2000s a couple of high-profile PTE collapses left Chinese students “on the street”, their fees vanished. Some students arrived with large amounts of cash to support their study, which led to some social and criminal issues – gambling and prostitution, extortion and even murders started to colour images of Chinese student life in Auckland in particular: definitely the exception rather than the rule, but as more stories hit the media it became increasingly apparent that NZ-China education links were beginning to have an image problem.
The Chinese Government also became increasingly concerned, and concerns were raised at increasingly senior levels extending all the way to the Prime Minister: education became what is sometimes diplomatically termed “an irritant in the bilateral relationship”. Chinese media began to discourage Chinese families to send their children to study in New Zealand, including by publishing negative accounts of the experience. One went so far as to claim that New Zealand was the most dangerous study destination in the world – a label that would have shocked many kiwis (and most Chinese students happily studying with us) at the time.
In response, then Prime Minister Helen Clark requested Education Minister Trevor Mallard to address the issues raised. A cross-agency response team of officials from the Ministry of Education, Ministry of Foreign Affairs and Trade, NZQA, Immigration New Zealand, NZ Police, the Prime Minister’s Department and others was assembled. I was working in MFAT’s North Asia Division at the time under the management of former NZ Ambassador to China Tony Browne who took a close interest in the issue, and I became one of the two MFAT representatives in this group.
In 2002 Minister Mallard made the first of several visits to China with officials to hear the Chinese Government’s concerns. There was no mood for compromise, and the Minister undertook to address the key issues raised.
Ultimately, the changes in our international education sector that this crisis prompted set up New Zealand very well as a quality education destination over the longer term and up to today. Amongst the steps taken, the Ministry of Education developed a Code of Practice for the pastoral care of international students governing their homestay arrangements, handling of fees and quality of provider service, which was widely seen as world-leading at the time and remains in place (after several revisions). NZQA tightened the review and supervision of the education quality of PTEs. Tuition fees were waived for international post-doctoral students, in order to ensure we were attracting the right type of student. And New Zealand Police worked with the local Chinese community to strengthen liaison with students and institutions.
Another important element of the response was the Ministry of Education’s decision to post a representative as a diplomat to the New Zealand Embassy in Beijing, with the title of Education Counsellor. Not long after the SARS outbreak in 2003 I travelled up to Beijing as New Zealand’s first Education Counsellor to China, a role I held until the end of 2005. Very much part of the small but rapidly growing Embassy team, I recruited one local assistant and we worked very closely with MFAT, Immigration NZ and NZTE colleagues on a daily basis. Education New Zealand had not been established at this point, so NZTE had responsibility for marketing New Zealand education while I focused on policy engagement. It was a fuzzy line, but I was lucky to work with NZTE’s Trade Commissioner at the time Pat English, and we made it work on the ground.
Over 2004 and 2005 New Zealand made slow but steady progress to rehabilitate our international education sector in the eyes of China’s leaders, officials and the public, but it was a thankless task at times. The problems that needed to be addressed overshadowed the large majority of high-performing Chinese students achieving good results in our education institutions. In China we set up a New Zealand alumni network for returned students as one way to highlight these positive stories, but local media were not keen (or permitted) to spotlight them. I worried that these students would be tarred with a ‘rubbish student’ stereotypical brush regardless of their achievements. I have many Chinese friends who were students in New Zealand over that period, who have gone on to make significant contributions to New Zealand and NZ-China relations, as kiwis or back in China as alumni – genuine ‘people to people links’ we should all be grateful for and proud to recognise.
In 2005 Prime Minister Clark visited China and we organised an alumni network event at the NZ Embassy in Beijing. The reception the PM received from the hundreds of graduates who came to meet her stopped just short of Beatlemania-level hysteria, an amazing outpouring of the warmth that these young people felt towards their ‘second home’ despite the negative headlines at the time.
We also found it hard to make progress to convey some key messages to Chinese families, for example the need to make use of international bank transfers as a more responsible way to fund their children’s study in New Zealand. But some issues were mercifully not so serious: I once received a formal complaint from a Chinese family that their child was being treated as a slave by their New Zealand homestay family. An investigation revealed that the student had been included in the dishwashing roster at home alongside the family’s own children, a task completely alien to a child from a well-off Chinese family!
We got there in the end, and NZ-China education links are strong again. New Zealand (now through Education New Zealand) has just posted the fifth NZ Education Counsellor to China, Michael Zhang, and ENZ also has staff in Shanghai and Guangzhou. China remains New Zealand’s top source of international students, and hard work and innovation by our universities saw many Chinese students continue their studies in New Zealand or via distance learning during COVID. All our universities and many other tertiary institutions have multiple MOUs and cooperation agreements with Chinese partners, and a range of research collaboration receives support from both governments. I very much hope that both countries will be able to continue to focus on the many positive international education opportunities for New Zealand and China in future.
Alistair Crozier in currently the Executive Director of New Zealand China Council, having previously worked with Asia New Zealand Foundation. He was New Zealand’s first Consul General to Chengdu from 2014-2019, establishing the office there and Deputy Ambassador to Vietnam from 2009-2014.
Richard Fyers – NZCTA Chair 1998-2002, Buddle Findlay Partner 1990-1996
The following excerpts are from a diary Richard kept on his numerous visits to China.
The New Zealand China Trade Association
At the request of Buddle Findlay and in my role as its “Asian Desk” –I asked and was invited onto the NZCTA executive in about 1992. The NZCTA had been founded as an informal association in late 1972 at the time NZ formally recognised the PRC. It became an incorporated association in 1981. When I joined it had about 50 members and Vic Percival was chairman and another important figure was Don Roberts. Vic was a unique individual. In the early 2000s at an NZCTA lunch he asked the then minister of trade negotiations “Why doesn’t NZ have a free trade agreement with China? China would be interested.” The Minister replied “That would be a bit like the flea negotiating with the elephant. Perhaps we could talk to Hon Kong.” But the point must have been taken because almost immediately negotiations began and were soon completed.
My China story really began when I visited China for the first time in 1993 at the request of Lu Qing who had worked with me as a lawyer in Auckland before returning to Beijing to start a law firm. They called it King and Wood and it featured in an article in The Economist as one of the first law firms to be allowed in China. They asked me if I would work there for a few months which I did. This resulted in some Chinese legal work, further visits and long term friendships with high level Beijing lawyers. After Vic Percival stepped down in 1998 I became the NZCTA chairman for a four year period and it had its office in my law premises. I became acting chairman again for a short period later on. During the first decade of the millennium the NZCTA grew quite strongly and by 2015 it had over 300 members.
From about 2002 Stuart Ferguson was chairman. He was CEO of Cosco NZ and had spent time living in Shanghai, a charming ebullient man. NZCTA had its offices in the Cosco premises rent free then moved to premises shared with the NZ China Council, a small group formed by the government. Following him the chairman was a partner from KPMG and during his time the NZCTA Young Associates was formed.
During my involvement with the NZCTA I met many top leaders. I had a personal dinner in Newmarket with Zhu Rongji and his wife. Through her beautiful interpreter I learned she had been reading Isabel Allende. In English, Zhu told me he liked Arnold Schwarzenegger and we reflected on Terminator movies, later he discoursed on China’s tax rates. On his vist to NZ, I spoke one on one with Jiang Zemin, then introduced him to Doug Myers. Jiang asked, “One of you is the richest man in NZ. Is it Fyers or Myers?” In Beijing, I shook hands with Hu Jintao. Before he was chairman I lunched at the same table as Xi Jinping and also on his next visit as chairman.At the second meal, I sat next to a Mr Chen who was a vice minister of commerce and I assumed one of Xi’s circle.
There were many NZCTA events and trips to China involving factory visits, legal work and due diligences.
I kept a detailed diary of my work with King and Wood in 93/94 and later legal work visits which notes are full of client information. So I will only provide here some personal business trips and set out my notes almost verbatim. That is so to give a full flavour of the experience.
June 1994-Trade Mission to Shanghai.
I visited Beijing to join a trade mission led by Phillip Burdon, the minister of trade negotiations, and Chris Elder, the ambassador. At King and Wood the staff solicitors were now paid 800rmb per month. Buddle Findlay had asked me to get a license to open an office in China. King and Wood recommended Shanghai. I took to lunch an official from the head office of the Ministry of Justice. In KWs office he hand wrote a note and put his chop on it. Someone said “That is the approval and instruction to the Shanghai justice department.” I didn’t fill out an application form or pay any fee. There was no such process in the system at this early stage. Even Chinese lawyers could not practice independently of the state until 1992.
I met Richard Wright who was working for NZTE and had become close to and then married Lu Qing. I received instructions from the Kiwi Fruit Marketing Board (later Zespri) to help a Chinese farmer who had discovered a new kiwifruit. A KW junior accompanied me to Shanghai to interpret and help with both the kiwifruit matter and the Shanghai Bureau of Justice. We to met Mr Jiang, the Chief of Division who simply wanted to know who Buddle Findlay was in the NZ legal scene and what China business we had or would do. We had consent already from Beijing.
As usual the trade mission involved extravagant banquets. Phillip Burdon spoke to Chinese politicians about helping them join WTO. We toured by bus Suzhou/Singapore City, marvelling at the Tiger Mountain bonsai and the Lingering Garden. In the café at the hotel, an old man joined me for lunch. It was Vic Percival. Vic was doyen of China traders, gonged by NZ and China (twice). He had been explaining to the steel company the unique quality of NZ iron sands using a method invented by Richard Cooper, now deceased son of our old AGS headmaster Henry Cooper. Vic was a unique eccentric character, a bespectacled craggy grinning face with a bubbly personality. I had a lot to do with him over the years on the NZCTA and for a long period he phoned me almost weekly. He unstintingly welcomed and entertained hundreds of delegations to Auckland and was a celebrity among Chinese but virtually unknown in NZ.
September 1994- Xinjiang abattoir investigation
King and Wood had introduced me to Mr Yan Hou Zhong who was a senior official of the Xinjiang provincial government. He was also chairman and senior livestock expert of the Xinjiang Beef Company Ltd. He wanted to resurrect a failed US joint venture to build a sheep and cattle feedlot and slaughterhouse near Urumqi. I got funding from the NZ government aid programme to explore this opportunity. I flew to Urumqi with two NZ experts, (Bob Antram from AFFCO, and Bob Wensley from Blue Sky Meats) and Lai Lili (a solicitor from KW) for a big adventure.
Xinjiang province contains one sixth of China’s land area. It borders Afghanistan, Pakistan India and Mongolia. The feedlot was at Hutubi farm about 70km from Urumqi. It covered 60,000 acres and was worked by tenant farmers—about 8,000 people derived an income from the farm. Activity included maize, sugar beet, feed for stock, dairy farming and a small Russian built milk powder plant. Our hosts planned a feedlot for 40,000 cattle and 50,000 sheep per year to be obtained by purchase from the “free market.” They had a small dairy unit where women would each milk 12 Holsteins for payment of 250rmb per month. The cows averaged 5,000kgs milk pa.
At the free market all kinds of stock was offered by barter, there was no auction. A 450kg steer fetched about NZ$1,000, sheep $80 and goats $45.
1998 Swing around Zhejiang with Peter Adams.
I was invited to accompany the NZ ambassador, Peter Adams, on a tour of Zhejiang province I decided to take my young daughter Julia with me. We had a few days in Beijing, visited the wall, the summer palace and then flew to Hangzhou. We were entertained by the provincial governor in Mao Tse Tung’s guest house in a park on the edge of the West Lake. It had a grand reception hall with wonderful murals and the usual formal seating for guest and host with interpreter’s chairs slightly behind. We had a magnificent degustation meal and I still recall the dessert, a mandarin the inside of which was refilled with iced mandarin flesh. We began a bus tour, first to a historic theme park. Next stop was Xiaoxing, famous for its fabric market which stretched over many hectares, the largest such market in the world. For example the thin corduroy area would have on 2 or 3 levels, scores of container sized stores offering just thin corduroy fabric. Another magnificent feast for lunch. Next stop was Ningbo arriving on August 15th, Julia’s birthday. Julia a little blonde girl was a big novelty for our hosts. Our dinner host, the Mayor of Ningbo, presented her with a music box as a birthday present. The key attraction at Ningbo was its port, we inspected the massive facility built to unload Australian iron ore. We took a ferry ride about one hour to an island which had a famous Buddhist monastery and temple. Some of the team had a swim in the hot sea. Back in Beijing we stayed at the Kunlun.
In November 1999, I travelled to Chongqing as chairman of the NZ China Trade Association to meet with the local China Council for the Promotion of International Trade. Our small group was met at the airport by CCPIT in a fleet of black Audis. At this time I was a director of Frucor Beverages and our party contained another Frucor manager. So, during our short stay we were taken to a new citrus plantation. There were spring onions planted down the middle of the one lane country road and brassicas up to the road edge. We inspected new citrus seedlings planted among their vegetables on sloping country.
3-17 March 2002—China trade mission
I spent ten days on a trade mission with Jim Sutton the Minister of Trade Negotiations, and John McKinnon the ambassador. Jim with a relaxed confident style made short warm and appropriate speeches. Off duty he talked about wine and the origins of man which he said was his main interest. John McKinnon a superb diplomat always smiling and had an engaging personality. He spoke excellent Chinese and our various hosts were always attentive and responsive to him. Trade missions were an excellent way to see things that the tourists didn’t. Moreover one could get a great deal of detailed information. On this trip to Harbin, Dalian and Qingdao, we inspected farms, food processors, factories, a huge seafood farm and had many delicious banquets.
Harbin was icy and had a Russian feel. The supermarkets were well stocked, even tropical fruits. Wondersun dairy had 26 factories, 150,000 cows and sales of ~NZ$90m. A highlight was the vice governor’s banquet at the state guest house. At a seafood farm in Dalian, abalone sat on corrugated plastic sheeting in long concrete troughs. 2000 tons of seawater was purified per hour and kept at 7.5 C. An abalone took three years to grow to sellable size of 30mm, eating 7.3kgs of kelp each year. This required 25m tons of kelp pa growing on 25,000ha of sea bed. Their kina took a year to grow, and they sold sea slugs and sushi seaweed to Japan.
In the pretty ex German port of Qingdao I took a speedboat ride along the coast. There were scores of people harvesting what must have been tiny crustaceans and possibly seaweed. At a furniture factory started in 1984 they had over 1,000 staff paid about US$150 per month. They had ten branches and built mostly for export. Stacks of cedar, paulownia and oak logs from Siberia and Canada. It was very noisy in the factory but no ear muffs. It was quieter at Haier where we toured 6 floors of products at their head office. The chairman boasted that in just their air conditioner division they produced a new product every 2 days and a new patent every 3 days.
31 March – 11 April 2005. Shanghai
The Oriental Riverside Hotel and Shanghai International Convention Centre are on the bank of the Huangpu River opposite the Bund. I arrived late on Thursday night and met Richard Duncan briefly in the bar before retiring for the night. Richard Duncan had left Asia 2000 to team up with Chris Cambridge in a company called New Zealand Investment Services. Chris was about 60 and had been promoting Chinese cultural exchanges for many years. He had a joint venture with the Chinese Ministry of Commerce (Mr Yu) to bring investment opportunities to high net worth Chinese. Chris had arranged for Mike Moore (former NZ PM and ex-chairman of the WTO) to speak as a draw card along with me and the ANZ Bank.
Some of the forty seminar attendees were government officials just there to listen to Mike Moore and others were fund managers. One tall gregarious chap managed over US$5 billion of China Railway’s funds, another debonair gent (Edward Yang) worked for a Japanese fund.
We were introduced by a Chinese government official. Mike Moore’s speech was translated by Yang Gang who was from the Pacific Islands Trade Office in Beijing. Mike talked about how amazing China was, about the first Chinese coming to New Zealand, the government’s apology for the way they were originally treated and New Zealand’s relationship with China over the years. He talked briefly about the New Zealand investment and political environment.
Shanghai boat show
Maxwell Marine was exhibiting and I was a director. This was held over four days in a Victorian style exhibition centre. It was well advertised in the media as a blue chip event with a black tie dinner on Saturday night. The organiser was a UK company which has 7,000 employees and does exhibitions/fairs and publishing. The young Dutch organizer said they took 60,000 m² this year which was twice as big as last year. The elderly president of the China Boat Builders Association told me there were 262 recreational boat builders in China, he was also president of the Ship Builders Association.
New Zealand companies had the whole of a small wing in a good location. Ron Czerniak, Maxwell’s salesman, reported good enquiries. NZTE who partly financed our participation were full of praise for Ron’s work. Ron was shown on Shanghai TV talking about the boat show and NZ. Mercury Liu from Taiwan has been distributing Maxwell products for over 25 years. He only did south of the Yangtze River and had never been to Beijing.
Mercury and Andrew Chan had carved up the China market between them, Andrew supplied new boat yards and Mercury supplied any Taiwanese or US OEM’s who were manufacturing in PRC.
The show was organised by country, Italy and Australia shared a good area near one entrance. Other New Zealanders present included Kim McDell who had been pestered to set up boatbuilding joint ventures in China, High Modulus and Cruz Pro.
28 October—5 November 2007—Horticultural trade mission to China
Under the NZCTA banner, I organized and led a small trade mission focused on Chinese horticulture. Over 10 days we visited wet markets, farms, food processors, logistics, seed companies, warm houses, science laboratories and other businesses in Beijing, Shandong and Shanghai.
The group included David Catty (NZCTA executive director), John Scott, Michael Silm, Lou Crasborn, (all Freshmax) Graham Rule (Strait Freight), Gwenda Merriman (livestock exporting and kiwifruit), Andrew Locke (Port of Napier), Jenny Yu (Korean Air), We were joined in Beijing by David Whitwam, Susan Cao (NZTE) and Jonathan Watt (NZTE). We had three Chinese interpreters/guides. En route we stayed overnight at the Hyatt Regency in Incheon – a well-appointed casino hotel with Roy Lichtenstein and Frank Stella art in the lobby.
Xinfadi Market (Monday)
The bus driver got lost trying to find the Xinfadi fruit and vegetable market in the south west of Beijing. It was close to an expressway crossroads and had a heavily guarded entry to its well formed internal roadway. There are 2 or 3 such wholesale markets in Beijing. The market was laid out in sections with green vegetables, an onion area, a potato area and a fruit area on one side of the roadway. We pulled into the fruit area where we met the daughter of the owner of the entire complex. She said wholesalers paid them 15,000 rmb per month for 100 x 108 square metre coolstores in the fruit area. The Zespri agents cool room stored citrus, apples and other fruit with only 10% of Zespri kiwifruit. We saw citrus from Australia, and other produce from South America, South Africa and Holland. There was Chinese organic product, like pears each packed in a hard-plastic container and huge grapefruit shrink wrapped. The banana section had ripening rooms and a lot of lady fingers.
Garlic Farm
The young executive director of Shandong Yi Ping Group had a degree in micro engineering and drove a black Audi 8 but dreamt of a Porsche. He was one of four shareholders. The major shareholder had 40% and was the wife of the chairman. The factory was on a six hectare site. They grew 600 hectares of garlic and 12 hectares of ginger. They had land use rights for 70 years. Their main business was preserving, dehydrating and canning garlic, ginger and peanuts which they processed, stored and distributed. They process 15,000 tonnes of garlic each year and 5,000 tonnes of ginger. 85% of the raw material was purchased from local farmers and they grew 15% themselves. 95% export 5% for the local market. Main markets were the America’s, Europe and Australia. They were operating at 80% of capacity. They had a permanent management of 108 and 300 workers and employed up to 1,000 temporary staff during the peak of the season. In 2006, their sales were US$30 million.
The garlic is grown by working up the land, spraying pre emergence weedicide, planting seed, laying by hand clear plastic about 2 metres wide and when sprouts appeared, holes were made for them to come through. They used pesticides and synthetic NPK. I asked why they didn’t plant seed through holes in the plastic. The chairman didn’t reply but looked like he had just had a thought.
We watched the bottom being cut from each bulb of garlic by hand machine. The garlic was then put through machines which separated the cloves, blew out the skins, washed, sliced, dried and bagged them. They had vast vats where garlic cloves were pickled for weeks.
Yiping had paid up capital of 60 million rmb and he talked about listing in 3-5 years. He was chairman of the Garlic Growers Association which had 3,000 members. Fierce competition meant the price had dropped to marginally economic levels. He wanted to import fruit and vegetables to China and asked about the price of onions from New Zealand.
Nursery
At Shouguang near Zibo, we met Annie Wei. She had started Hongmei Horticulture in 2002 after saving US$10,000 and borrowing US$30,000 from friends. She had a degree in floriculture from Beijing University and had worked in Kunming on flowers. In a 30,000 m² glass house they grew seedling bell peppers, cucumbers, tomatoes and other vegetables. She imported seed from Israel and the Netherlands growing 20 million seedlings each year for sale at 1 rmb though seedlings from local seeds were cheaper. For five or six Japanese buyers she grew ivy hanging plants, shipping them in 40 foot containers taking three days at the same cost as 50 kg airfreight. She was a whirlwind, surrounded by staff and giving orders left and right.
Warmhouses
Annie Wei took us to Wang Leyi village, the famous professor who twenty years ago invented the solar powered earth wall green house. There are now over 1 million in the region. A pit is dug one mu (666 square metres) by one metre deep. The excavated earth forms a wall on the northern side about three metres thick. From the top of the wall an arch extends supporting a plastic roof at an angle of 23 degrees (important). The warm house faces south but with a slight angle to favour the trapping of afternoon sun. This house can produce sufficient heat even when the temperature outside is as low as -15 degrees centigrade such that melons can be grown in the winter. Straw would be rolled down over the clear plastic to stop sun coming through or to trap heat at night. Irrigation was by channel, and was also used to control temperature.
Watermelons were grafted on to pumpkin stock and grown as vines. Because the land had been farmed for so long, a lot of chemicals were used to keep down pests and diseases. There were few vegetables grown outside because of terrible white fly. Each village would specialise, melon village, bell pepper village. Small local businesses manufactured cartons for each village. Each family would have perhaps 1-8 mu (average 2 mu) of warm houses. Each warm house would produce US$3,000 – 7,000 income. Local dealers would bring their trucks to each village and pay the farmers in cash for their produce. The supermarkets have their own buyers. A little production was sold to Russia and Hong Kong.
Shouguang market
This wholesale market is owned by the local government, vegetables only, from all over China. They say you can buy or sell any vegetable here. It is the largest market in China (about 100 acres) employing 500 people and turnover $1.5 billion. The sellers pay a commission of 1% or 2%. Produce is sold by weight. It attracts produce in season from distant area where it cannot all be consumed. Before the advent of warm houses Shandong grew only cabbage in the winter.
Perhaps 30,000 people visit the market each day. There are three trading halls, for Shouguang itself, for Shandong province and one for outsiders. There are maybe 1,000 traders, minimum volume purchases and reserve prices may apply. Nearby, Syngenta Seed Company had ten hectares for showing varieties to buyers. They claimed a tomato plant that could produce 10,000 fruit, especially for the Shouguang fair held in April.
Laixi and wine
We inspected a vineyard contracted for 15 years to Changyu Winery. It was 17 hectares (15 mu per ha) notable for beautiful granite posts four metres long, two metres buried in the ground. The vines of several varieties, six years old, looked poorly kept. They had been harvested in September and some withered bunches still hung on the vines.
We were escorted by police cars through red lights as we entered Laixi, a city of 750,000 with large areas of apartment blocks under construction. We had an excellent lunch in Laixi City with the voluble Deputy Mayor accompanied by a lot of Changyu wine.
The area around Shouguang had many farmers on small lots but towards Laixi and the two hours drive from there to Yantai, the land got drier, hillier and the farms much bigger. Around Qixia were large areas of Fuji apples. We saw one block with Australian trellises, but most of the orchards were rustic.
Yantai
The Yantai Lushun Foodstuff factory is owned by a couple who have a house in Auckland. The business started in 1996, 90 staff now turned over US$5 million, 100% export, only profitable recently. They sold: sultanas (2,000 tonnes in 12.5kg packs for German bakeries); apple (310 tonnes in 7-10kg bags for Nestle in Australia); pears (200 tonnes); wolf berries, goji and kiwifruit. They wanted capital ($2m) to expand and could not meet demand. They bought already dried fruit, resorted and repacked it.
Yantai Huafu Foods was an apple packhouse which paid cash for local Fuji apples. Each apple had been encased in a paper bag until two weeks before harvest when the bag was removed for a blush to develop. Consequently, the skins were tender. Apples were placed in a soft plastic sock when harvested. Each apple was inspected at the packhouse by hand then machine graded. After grading, a sticker was placed by hand on each apple then packed in locally produced cartons under customer brands required. Some were destined for Indonesia.
The pack house had good hand and electric fork lifts. The CA stores were being filled. The manager was having to pay more for apples this year than last year.
Tian Yuan fish farm
We had dinner with the director of the Fisheries Bureau. He was responsible for 25,000 square kilometres of sea. Yantai produced 2 million tonnes of seafood each year over 60% from aquaculture. They import annually 5,000 tonnes of squid from New Zealand and process North Atlantic fish.
We drove past the Changyu winery, a newish faux chateau on the outskirts of Yantai and soon arrived at a windswept barren coast. There were some hangar shaped buildings, an office building and apartments were being built. Inside the hangars were slightly hexagonal concrete tanks with 3 or 4 feet of water growing turbot. They were crossing UK, Danish, Japanese and Chinese fish. Females would only release their eggs in the wild under 30 metres of water pressure so egg release had to be artificially induced. Sperm was extracted and mixed with the eggs.
They could produce 100,000 saleable fry from one female, twice per year. The fry was grown for three months until five millimetres in length then sold to local farmers for 3 rmb each. The farmers would grow the fish one year to commercial size taking one year. The fish would then be marketed by the breeder which offered a guaranteed price and a profit share. The breeder had an outlet in the local market. We saw the almost microscopic fertilised eggs on the surface of the water of one tank. They raised a few commercial sized fish themselves and one tank had some old breeders with stickers saying they were for sale. The manager showed us huge Japanese turbot, perhaps ten kgs. For sale at 300 rmb per kg as compared with around 60 rmb per kg for other varieties. They had sea urchin from which they were extracting enzymes. They had competitors but were the largest turbot breeder.
Chaucer Foods
This subsidiary of a French company set up in 2001 was managed by two New Zealanders. It was a wholly foreign owned enterprise with a turnover of US$55 million. It produced freeze dried products mostly fruit for breakfast cereals made by Kelloggs and others also mushroom extracts and croutons. It had had difficulty getting chemical free product from China and was therefore establishing its own farms starting with a 150 ha leased strawberry farm joint venture.
Hengtai
This company set up in 1994 was listed on the Hong Kong stock exchange in 2001. It started a fresh fruit business in about 2002.
It was an hours drive from Nanjing Road to Hengtai’s new office and coolstore complex with six loading bays. The well-appointed offices looked under used. Hengtai had an HK market cap of NZ$500 million with NZ$150 million worth of assets. The CEO Chu Ki gave the first presentation, his key word was glocal – global, local, focal. They targeted high margin, high cost products, patience and relationships. Nexus a logistics company did temperature management from door to door in JV with Hengtai. They had 12,000 m² of cool storage in Shanghai. There were only 5,200 proper refrigerated trucks in China. It took three days to drive from their Zhongshan distribution centre in Southern China to Beijing (two days drive to Shanghai). There were other presentations from the fresh produce cold chain manager and the GM of Sino Combo, a company being spun out of Hengtai to own the coolchain hardware. Only about 20% of Hengtai’s business is fruit and vegetable distribution which it is trying to grow with joint venture pack houses and cool stores in China and Thailand.
April 2008—FTA China Trip
A delegation of 150 accompanied Phil Goff, Helen Clarke and Chris Carter to the signing of the Free Trade Agreement in Beijing. My main responsibility was to look after my friend Victor Percival who was being taken to the event as an honoured guest of the government. Rob Fyfe the CEO of Air NZ was also a personal friend of mine and Vic was tickled pink when Rob carried his bag for him upon arrival in China. It was Vic who instigated the negotiation of the FTA by raising the issue with the government at an NZCTA lunch.
Vic started trading with China in 1952 and was to have his 80th birthday in Beijing on 8 April. He was an NZCTA stalwart, attending innumerable meetings and welcoming Chinese delegations to Auckland—until at 82 years he was found dead in the hallway of his house in Onehunga.
During the flight, Phil Goff read stacks of briefing notes about the FTA but found time to talk, earnestly. I also spoke with Paul Holmes (who was attending as a maker of olive oil) and Paul Morgan, the chief executive of the federation of Maori authorities as well as Whakatu, a Maori corporation which owns a Nelson coolstore with my client Freshmax.
About 200 delegates including NZ Beijing residents were briefed by Phil Goff, David Walker, the lead FTA negotiator and later addressed by Helen Clark. We were given a summary of the highlights of the FTA, tariffs would be removed from New Zealand exports over the next five years and by 2017, some 70% of our exports would be tariff free. As well, there were improvements to customs clearance (goods couldn’t be held for more than 48 hours), specific policy statements on intellectual property protection, environmental matters and the Treaty of Waitangi. There was also a “Most Favoured Nation” clause so that NZ would benefit from future free trade agreements which gave another country a better deal. There was a great deal of mixing after the briefing. I had dinner with Victor and China’s ambassador to New Zealand, Mr Zhang Yuanyuan, a great guy.
On Monday, 7 April, we bused to the Great Hall of People. It was the third time I had eaten there. Contrary to our briefing, the security check was very quick. We climbed the stairs from the North Hall and were seated looking at a large wall hanging of a mountainous Chinese landscape with pine trees in the foreground and the Great Wall in the background. On a prior dinner at the Great Hall I had managed to explore the premises with a friend—each province had its own beautiful room with its provincial art and objects.
There was a lot of media at the FTA event. Eventually the official party came in, led by the Prime Minister, Wen Jiabo, and trade minister, Chen Demming. The New Zealand party included the three cabinet ministers, Tony Browne (the NZ ambassador), and Heather Simpson (the Prime Minister’s private secretary).
A smaller group was invited by Mr Wen to lunch in the West Hall. A large band quietly played light music, including Po Karekare Ana. The best courses were a soup of sponge bamboo and abalone, stewed veal, mandarin fish with lychees and almond cream with water chestnuts. We drank Great Wall 2002 wines from Hebei. I forgot such meals often finish abruptly and I never did get to eat the usual watermelon finisher. I did not get to speak to Mr Wen.
In the evening, there was a dinner for 600 in the Sofitel, my guests, Lu Qing and Harry Du partners at King and Wood, were put on a different table so I gathered them up and we found seating for three towards the back of the room. The meal featured New Zealand food and wine and there was Maori entertainment off and on but it wasn’t intrusive.
Tony Browne – New Zealand Ambassador to China (2004-2009)
Reflections on NZ-China 1970’s and 2000’s
1970s
We saw few business visitors in Beijing in the 1970s as the Canton Fair remained the principal venue for commercial negotiations. The most regular visitors were from the Wool Board.
In 1977 New Zealand’s Trade Commissioner in China, the late Rod Cumming, hosted a celebration of our reaching the landmark of our exports to China reaching $3 million in a year. We were confident that this would grow, but none of us had any inkling of just how far.
We learned more than we might have wanted as Rod reported enthusiastically on the various appendages and other animal parts that Chinese traditional medicine importers came to him to source from New Zealand.
In Beijing Mao’s death in 1976 led to a sweeping away of much of his legacy: political advancement and appointment to positions in government agencies saw professional competence become more important than ideological purity. My first visit to Peking in 1974 had seen plenty of evidence of the “better red than expert” philosophy and how destructive it had been.
I became involved in the efforts of the New Zealand horticultural industry to boost its connections with Chinese scientists and obtain new plant varieties of the “Chinese Gooseberry” (actinidia chinensis or 猕猴桃mihoutao). Dr Ted Bollard, the head of the plant and Food Division of the DSIR and who had been on the Royal Society of NZ’s first visit to China in 1974 set me on the search for a scientist from Xiamen who had ended up working for the DSIR during the war. These enquiries ended up with the Chinese Academy of Sciences welcoming NZ scientists to work with their Chinese counterparts over the next 25 or so years. It also saw the Academy provide New Zealand with new varieties of actinidia seeds that contributed significantly to the growth of the industry in NZ.
2000s
The 2000s began under a cloud from the failed Central North Island Forestry Partnership between Fletcher Forests and CITIC, a NZ$2.2 billion investment in 1996 to buy 190,000 hectares of forests from the government. It was, at the time, one of China’s largest foreign investments ever and its largest failure. When Helen Clark visited China in 2001 the message was signalled ahead to us that China would ask her not only to apologise for the failure, but provide CITIC with compensation for its losses. She didn’t.
I arrived in Beijing to take up the Ambassador’s position in November 2004 on the first day of the first round of the discussions that culminated in the signing of the NZ-China FTA in April 2008. The majority of the 15 rounds of negotiations were in China, with a team of up to 35 officials coming from Wellington for most rounds. It was far from clear, right to the end, that agreement would be reached; the 14th Round in November 2007 ended in general gloom. The final Round, in December, was scheduled to last six days. On the sixth day the Chinese delegation cancelled plans to go to a meeting in Geneva and continued to talk for another week. There had been any number of issues could have derailed the whole deal, and indeed looked quite likely to do so right to the end. The text exceeded 1000 pages.
In retrospect it seems a no-brainer that New Zealand should have chased an FTA with China. But in 2003 when we began to explore options to build the trade and economic relationship there was hesitation and doubt at all levels of government. There was doubt about the readiness of China to enter such a negotiation, there was push back at the highest levels over China’s insistence on being recognised as a market economy before it would consider further steps towards a trade negotiation, there was pressure from our trading partners not to get out of step with a wider western policy of refusing additional concessions to China without further domestic economic liberalisation.
The Chinese bureaucracy was deeply divided over the merits of this negotiation. Those agencies wanting further domestic reform to build on the changes that had been needed to secure China’s entry to the WTO pushed for it. The Agriculture Ministry was at the forefront of those determined to halt any further concessions beyond those agreed in the context of the WTO entry, and they regularly called me in to argue the case why China should not accept New Zealand’s demands. The were overruled by Premier Wen Jiabao who visited New Zealand in 2006. His accompanying ministers, including Bo Xilai, made it clear that it took a decision at the Premier’s level to agree to have dairy included in the FTA package.
Chinese negotiators were to say to us that the negotiations across the table with the New Zealand negotiating teams were easy in comparison with the battles they first had to fight inside the Chinese bureaucracy.
The Olympics and Paralympics had had so much financial and reputational investment by China that failure was unthinkable. It was a great time for New Zealanders to be in Beijing. New Zealand athletes in both Games brought home a liberal haul of medals. Both groups of athletes and supporters made generous inclusion of embassy staff in their activities. On the cultural side the NZSO, invited to represent New Zealand and Australia in the Olympics Cultural Festival, brought credit to New Zealand that barely registered at home. But the timing of the Games exacerbated one of the most serious issues the relationship with China has faced in the 50 years.
Milk consumption in China had grown hugely in the early 2000s. To meet the demand companies throughout China saw large scale foreign investment in the sector. With the growing demand came efforts to inflate the value and the volume of milk being supplied by so called “milk aggregators”, people who collected milk from small farmers and sold in bulk to milk processing companies. The company most compromised by this was San Lu, the company in which Fonterra had bought a 43% stake for over $200 million. Strict control over what the media could and could not report did not assist efforts to manage the issue properly when San Lu became aware of the extent to which its product had been compromised. Those controlling the media in the leadup to and during the Olympics had listed food safety as one of the proscribed topics that the media was banned from discussing. Efforts by Fonterra’s management to institute a full product recall were completely and repeatedly blocked. Fonterra staff were threatened with unspecified action against them if they persisted in demanding the recall. In the end the Embassy, at the government’s direction, approached central government ministries in Beijing to force the issue to a head.
The San Lu incident showed how essential political connections, and political access were to manage and resolve a crisis, even though the government had no direct stake in the issue.
Tony Browne was also posted to Beijing from 1976-78 and was New Zealand High Commissioner to Vanuatu 1987-90, Director of New Zealand Commerce and Industry Office in Taipei 1994-97, Director of North Asia Division at MFAT 2002-2004 and following his return from Beijing as New Zealand Ambassador to China in 2011, became Chair of the New Zealand Contemporary China Research Centre.
Carl Worker – New Zealand Ambassador to China (2009-2014)
NZ-China Trade and Economic Developments and Trends
I took up appointment as Ambassador to China in April 2009 with three recent developments imparting new impetus to the New Zealand-China trade and economic relationship.
First, the New Zealand China Free Trade Agreement, China’s first FTA with a developed country, had come into effect in October 2008, offering unprecedented prospects for boosting and diversifying New Zealand exports to China and improving the balance in a trade relationship that had already grown rapidly in recent years but heavily in China’s favour, benefitting from New Zealand’s already open markets.
Second, by early 2009, there was evidence that China did not see New Zealand’s dairy industry champion Fonterra as materially responsible for the mishandling of the 2008 national adulterated milk food safety tragedy in which 43% Fonterra-owned San Lu played a prominent role. The consequences for Fonterra would be principally financial, with Fonterra welcome to rebuild its operations and reputation in the China market going forward, confirmed during the April 2009 visit to Beijing by recently elected New Zealand Prime Minister John Key.
Third, the China trade and economic relationship had been made an explicit priority by the new government under Prime Minister John Key, operationalised by his decision to lead a senior business delegation to China as his first official bilateral overseas visit in April 2009. The scale of ambition for growing business with China – at a time when other opportunities were dampened by the effects of the Global Financial Crisis – was underlined by Prime Minister Key’s agreement with his Chinese counterpart to strive for a doubling of bilateral trade by 2015.
The resulting growth of bilateral trade during the first 6 years of the FTA was spectacular, with the goal of doubling by 2015 achieved ahead of time. This was achieved through growth in both directions but with significantly faster growth of New Zealand exports, resulting in a both bigger and better balanced trading relationship.
Buoyant New Zealand export growth spanned established export products including milk powder, kiwifruit, seafood, logs, wool and honey, and a range of newly important commodities including infant formula, cheese, meat, and apples. Exports of services to China grew rapidly, with rapid expansion of Chinese tourism to New Zealand facilitated by new direct air links spearheaded by Air New Zealand and China Southern, and a resumption of growth of Chinese fee-paying students in New Zealand.
Chinese foreign direct investment in New Zealand became significant during the period, including in dairy processing and waste management. In the other direction, Fonterra embarked on a major new investment programme in milk production facilities in northern China.
Growing pains and learning opportunities
The change in China’s trade and economic importance for New Zealand was dramatic. China moved from being New Zealand’s fourth largest country commodity export market in 2008, behind Australia, USA and Japan, to our largest market in 2013, a position China has retained ever since. China also moved to become New Zealand’s largest country source of commodity imports, a position it also has retained.
There is no free lunch. This enormous growth in China’s absolute and relative economic importance to New Zealand did not take place without a number of growing pains along the way. Addressing these required significant learnings and adjustment of attitudes towards China, and reprioritisation of resources, by both the New Zealand private and public sectors. This was handled remarkably successfully.
Dairy
A hard and expensive lesson had been learned by Fonterra about the risks of relatively hands-off governance of major milk processing investments in China with the San Lu debacle of 2008. Part of the thoughtful response was to commit to a major investment programme in hands-on, high quality milk production facilities, also seen as positively supporting the technological upgrading and recovery of the wider Chinese milk sector. Other lessons were required to be learned from a major food safety scare in 2013, including that with China now New Zealand’s largest global dairy market, Chinese consumer and regulatory requirements needed to be accorded a correspondingly high priority with appropriate specialist communications and relationship management support.
Fonterra’s presence on the ground in China and range of specialist local expertise continued to grow rapidly. As well as sustained buoyant growth of milk powder exports, Fonterra’s success in China increasingly was underpinned by a profitable food services business supporting the fast growing and modernising Chinese food processing and catering sectors. The impressive new ‘dairy farm’ state of the art milk production facilities, while never apparently profitable in their own right, significantly helped underpin the rehabilitation and future positive positioning of the Fonterra and wider New Zealand dairy brands in China.
Kiwifruit
Lessons also had to be learnt in the kiwifruits sector, where after a strong early start going back some years relying on previously commonplace but no longer fully conforming business practices, the scale of Zespri’s success brought to light the unsustainability of such risks and urgent requirement for modernisation of its China business arrangements. This was successfully accomplished, at significant short term cost, establishing the secure base from which Zespri has continued to grow its highly successful China business.
Meat
After a gradual start to the meat export trade, based largely around exports of lower value sheep meat cuts, the potential for much larger and more valuable meat exports to China became apparent to the New Zealand industry as China signalled intent to open its market wider. There was some initial undervaluing of the preferential access already enjoyed by New Zealand, and impatience with the gradual opening approach being signalled by China. But minds were soon sharpened by the consequences of a New Zealand administrative mishap that temporarily led to meat imports from New Zealand being suspended entirely. Wise heads in the New Zealand industry drew the lesson that the industry collectively needed to get to understand China better, including building stronger contacts with the Chinese industry and its regulators. Government for its part committed to greatly increase the advice and support available to the meat export industry from specialised officials both in China and New Zealand, led by a major enlargement of the MPI team in China. A solid base was established for the subsequent successful development of China as a major meat market for New Zealand.
Proactive government interest and support
The successful drive to make the most of the opportunities of the ground breaking NZ-China FTA was led by the New Zealand private sector but both encouraged and supported proactively by government during the period.
Setting the example from the top, Prime Minister Key visited China five times between 2009 and 2014, accompanied on most of the visits by large and senior business delegations. He hosted two visits in New Zealand by Xi Jinping – first as Vice President and later as President – and two visits by Li Keqiang – as Vice Premier and later as Premier. Most members of the Cabinet visited China, often accompanied by business delegations, with several senior Ministers visiting more than once. These included the Minister of Maori Affairs who led several delegations of senior Maori business and cultural leaders to promote first hand familiarity with China. As with Ministerial visits, senior official visits were actively encouraged and proved productive in increasing senior first-hand knowledge of China’s government and economy. As well as bequeathing the FTA, the previous government under Helen Clark had made a major financial commitment for an impressive New Zealand Pavilion at Shanghai Expo 2010. This was actively leveraged by both public and private sectors to promote New Zealand’s image as a desirable trade and economic, education and tourism partner for China.
Underlining New Zealand regard for the importance of the China relationship, the Government funded the construction of a new, enlarged New Zealand Embassy and Official Residence in Beijing, established a new Consulate-General in Chengdu in western China, and significantly increased staffing across New Zealand’s network of China posts.
Significant new resources were dedicated also to building China capability in New Zealand. A new Public Sector China Capability Project was established to increase China knowledge widely across the New Zealand public sector. A New Zealand China Council was established to bring together senior stakeholders from across New Zealand business and the wider community to help promote a healthy New Zealand-China relationship.
Carl Worker also served as New Zealand Ambassador to Argentina and Uruguay from 2019-21, New Zealand Consul-General in Hong Kong and Macao from 2017-19, New Zealand Ambassador for Counter Terrorism from 2016-17, New Zealand Chargé d’Affaires in Washington DC from Jun–Dec 2015, New Zealand Ambassador to Argentina, Uruguay and Paraguay from 2001-06 and New Zealand Consul-General in Hong Kong and Macao from 1994-98. Earlier overseas assignments included the roles of Deputy Head of Mission in Beijing and Suva, Fiji.
Phillip Gibson – New Zealand’s Commissioner General for the 2010 Shanghai World Expo
Expo paves a path for NZ in China
The Shanghai Expo in 2010 was a powerful opportunity to showcase New Zealand in China, a country of nearly one and a half billion people riding the crest of three decades of likely the fastest economic growth in world history.
It also provided a catalyst for putting the China story in front of New Zealanders – the critical importance of China, the massive opportunities for New Zealand there and the potential to accelerate our engagement following the landmark 2008 New Zealand/China Free Trade Agreement.
The Expo, the biggest ever was an emphatic statement by China about its place in the world moving into the 21st century: size, power, confidence and a sense of China reassuming its historical role as the world’s largest country and economy. It included 240 participants and attracted 73 million visitors over its six-month span. Following on from the Olympics, the Expo was part of China’s coming out party – and the world wanted to be there and score with the host.
That New Zealand was amongst the first to sign on for Shanghai was an important and deliberate message to China of the value we attached to the relationship and wish to grow it. The Government committed $30 million in funding and the private sector got strongly in behind with sponsorship and other support. Our participation in the Expo was very much a “NZ Inc” effort.
The site China allotted us for our Pavilion was excellent, highly visible, easily accessible, close to the China Pavilion one of the Expo’s main attractions and so assured of high foot traffic.
Our goal for the Expo was a distinctive New Zealand presence that made a powerful impression and communication and leveraging programmes that reinforced our interests and objectives in China.
Designed by Warren and Mahoney the Pavilion was a striking wedge-shaped structure encapsulating an interior walk through with a flying canopy at the front and as its exit a roof top representation of the New Zealand landscape.
The walk through captured a day in the life of a composite New Zealand city, with a carefully crafted mix of technology and visual and tactile experiences.
The overarching message was New Zealand as a dynamic multi-cultural Asia Pacific nation, clean and green, a compelling tourism and education destination, and at the same time, smart, innovative and a good place to do business and invest.
The queuing area at the entrance featured large inter-active Pou, the carving of a Waharoa and a magnificent, nearly two tonne Pounamu, which was especially popular – Jade has particular significance in China. In addition Kapa Haka groups performed throughout the day, consistently attracting enthusiastic audience response and wide TV coverage.
The final stage of the Pavilion experience was the roof top landscape combining New Zealand’s film industry special effects expertise and natural foliage. Among its messages was the importance of “Kaitiakitanga”, the Maori concept of guardianship and conservation of the environment.
As a special gesture of enduring friendship, the Waharoa when its carving on site was completed was gifted to a local museum.
The Pavilion was widely profiled in the Chinese media and officially judged by the Expo organisers in a highly competitive process at the Expo’s conclusion as one of the Expo’s best. It operated 13 hours a day, seven days a week and attracted just on 4.5 million visitors, a daily average of around 25,000. Our attendants, talented young New Zealand graduates all spoke Chinese, which added to the visitor experience.
Five Ministerial led Trade Missions were organised to leverage off our Expo presence. These spanned Meat and Fish, Aviation, Education, Maori business and Information and Communications Technology. In addition, the Prime Minister led a group of business leaders including core sponsors to mark New Zealand’s National Day, an occasion accorded each participating country.
Along with a range of institutional and private commercial initiatives, several regional delegations also visited, from Otago/Southland, Canterbury, Wellington, Hawkes Bay, Bay of Plenty, Waitakere, promoting trade, tourism, education and other particular interests. In China, Mayors open doors.
In total, more than 300 business and promotional events were hosted at the Pavilion’s VIP facilities involving more than 300 New Zealand companies and 9000 targeted guests. Several deals and relationship agreements were concluded on site.
Our Expo presence also featured New Zealand performing artists. In addition to the resident Kapa Haka groups they included over the Expos’ six months Zane Te Wiremu Jarvis, Elena Te Nahu, Aviale Cole, Footnote Dance, Moana and the Tribe and the New Zealand Trio, as well as the New Zealand Youth Choir and New Zealand Symphony Orchestra.
The Pavilion’s visual appeal naturally attracted media interest. We also pro-actively engaged with local journalists to get out key New Zealand messages and tracked over 1200 resulting articles, on average four a day. Similarly we worked through social media including blog sites involving several of China’s top travel and food bloggers. The scale and reach was extraordinary. Even a decade back the number of Chinese online was over 300 million.
Media interest domestically in New Zealand was high, including radio and TV. More than twenty New Zealand journalists visited Shanghai during the Expo and we tracked over 700 articles in New Zealand publications, overwhelmingly positive.
When New Zealand started planning for our participation in the Expo, China was our fourth largest trading partner. By the time the Expo was getting underway it was our third.
It is now our largest.
The exponential growth in New Zealand’s trade with China and pre-covid in our tourism and education links has been extraordinary.
New Zealand’s distinctive presence at the 2010 Shanghai Expo very much helped pave the way.
Phillip Gibson was New Zealand’s Commissioner General for the 2010 Shanghai World Expo. He was also New Zealand’s Commissioner General for the 2005 Aichi World Expo in Nagoya Japan. A career diplomat, he served as New Zealand’s Ambassador in Japan, Indonesia, and Thailand where he was also accredited to Vietnam, Cambodia, Laos and Myanmar. He was New Zealand’s first Ambassador to ASEAN and CEO of the Asia 2000 Foundation, now Asia New Zealand Foundation in its formative and growth years. Earlier diplomatic appointments were in the Philippines, Italy and at the United Nations New York.
Jeff Shepherd – NZTE Trade Commissioner Shanghai (2007-2011)
I first visited China in July 1985. I remember being in Shanghai, on the Bund looking across the Huang Pu River at Pudong (not much to see there at that time) and promising myself that one day I would return to Shanghai to work.
Some twenty two years later following a number of fleeting visits over the intervening years I returned in late 2007 to take up the Trade Commissioner role. Little did I know what lay ahead over the next four years.
It was an incredibly exciting time for NZTE and the New Zealand relationship with China. New Zealand and China signed the FTA in 2008, NZTE built New Zealand Central in Shanghai (opening in 2009), established the China Beachheads programme in the same year and New Zealand took part in Shanghai Expo 2010.
It was busy – Shanghai was changing on a daily basis, new roads and streets suddenly appeared, buildings sprung up, shops, malls, hotels, bars and restaurants seemed to open (and in some cases close) almost overnight. We had a steady stream of New Zealand companies visiting following the FTA and then an explosion of Ministerial led delegations leveraging off our participation in Shanghai Expo. It seemed a week wouldn’t go by without a major visit or event somewhere.
I learnt the true meaning of “legless” after a Mao Tai session with the local construction company who built our Expo pavilion and came to fully understand the term “every man and his dog” – given the sheer number of small and not so small exporters and businesses who put Shanghai on their travel schedule during those years. There were some that understood China or quicky learned and got it right, there were a some who didn’t and failed and there were more than a few who were simply passing through. A good ten years later I continue to be both impressed and somewhat in awe of the New Zealand companies who have built their business in China, often facing significant challenges and hurdles along the way but learning and achieving success and I am fortunate to have remained in touch and friends with many.
I am grateful to the many New Zealanders and those from foreign parts and particularly to the Chinese people I met for sharing their knowledge and experiences, for their support and hospitality, for the fun, laughter and on occasions more serious discussions and for their friendship. Shanghai was and continues to be a fascinating and unique city. I left exhausted but with memories that will last forever. Dreams (or plans) do come true and I consider myself very fortunate to have lived in China and Shanghai at such a special time.
Hon Tim Groser: New Zealand Minister of Trade (2008-2015)
My 50 Years With China
1972: My First Visit to China
My first trip to China was in 1972 as a student politician and one of the Leaders of a NZ Universities Delegation. We were the third ‘Western’ group to go into China at the tail end of the Cultural Revolution – the famous visit of the American table tennis players being the first. I took the picture below of our meeting in Beijing with the legendary New Zealander, Rewi Alley who was so pleased to meet a group of young New Zealanders – he was ensconsed in the Residence of the old Italian legation in Beijing. My overriding impression of him was that he had, to put it politely, ‘mixed emotions’ about his complex personal history in China.
When we returned to New Zealand I was asked by the Prime Minister’s office to call on the Prime Minister, the Rt Hon Sir Keith Holyoake and brief him – so rare were contacts between China and New Zealand. I recall giving the Prime Minister what I hoped was an ‘incisive analysis’ (I was 22 years old and therefore knew everything) as to why it was absurd for his Government to continue to recognise Taipei as the ‘capital of China’ and how we had thought China was beginning to reach out to the world. When I had finished my assessment, Sir Keith turned in his rotating chair, looked out the window for a minute or two, and gave me his response: “Tell me, Mr Groser. I have been told that in China people honk their horns a lot. Is that true?”
1972-2008: The Spectacular Growth of our Trade Relationship with China.
I had dozens of trips to China during this period, mostly as a senior Trade Negotiator for Aotearoa-New Zealand, or head of the think tank, the Asia-NZ Foundation, but regrettably – no surviving pictures. This was of course a momentous period for our trading relationship with China, culminating in the highly successful FTA which has underwritten NZ prosperity over the last two decades.
2008: My Meeting with Commerce Minister Chen Deming: the Sanlu Milk Scandal
I had just been appointed by Sir John Key, the newly elected Prime Minister, as Minister of Trade. Within days of the Election, I flew to Lima, Peru, for the APEC Leaders Meeting (and the customary meeting of APEC Trade and Foreign Ministers). From our point of view, we were embroiled in a potential disaster – most particularly on the human level: there were some 1300 babies in Chinese hospitals with renal failure caused by deeply contaminated infant formula. But beyond the human tragedy, there was also the potential of vast, and arguably needless, disruption of our trading relationship. My first meeting was with the Chinese Minister of Commerce, Chen Deming.
Neither he nor I (or any of our expert advisers) had any idea what had caused the contamination – or even if it was a natural or deliberate event. Only later did we find out it had nothing to do with New Zealand. It had been the result of criminals in China putting melamine into the milk to increase the nitrogen reading of deliberately diluted milk so the milk would pass the test by the Chinese authorities and the criminals could receive full payment. In 2008 I was told that in China they called milk ‘Liquid Gold’, so high was the price of milk at the time. Privately, I was worried that the Chinese Government – under huge pressure from young parents, all naturally terrified about the consequences for their infants- might simply ‘ban imports’, until it was clear what the source of the problem was. There are many precedents in trade in food and medicine for the ‘blame the foreigner’ playbook to be rolled out.
I had my meeting with Minister Chen Deming and at the end of the formal, and certainly uncomfortable discussion between the two of us, I said something informally (ie once the note-takers had closed their books) along these lines, “You know Minister, there is personal element to this for me. My first grandchild was born in Hong Kong about 9 months ago and the day after I was appointed Trade Minister, my daughter-in-law rang me to congratulate me but, more importantly, to add that she could not find any infant formula anywhere in Hong Kong for my own grandchild (who had just been weaned) and to ask me what was I going to do about it.” All the ’safe’ infant formula had vanished off the supermarket shelves in China and Hong Kong as the crisis deepened. Chen Deming looked at me and said (through the interpreter): “What a coincidence. I too have just had my first grandchild and my daughter rang me with exactly the same message. We must fix this together’.
I had the unmistakable feeling that no longer were we talking about politics and trade – the Trade Minister of a tiny country and the Trade (Commerce) Minister of the largest country in the world by population. We were talking as youngish (late ‘50s) grandfathers on a personal basis facing the same family problem. That formed a close bond that lasted through our shared terms as Ministers. The Chinese Government took a highly responsible and professional approach to an exceedingly sensitive matter and I have never forgotten this.
2011: Meeting With Minister Wang Yi: Laying the Political Foundations for our Trade Agreement with Chinese Taipei
NZ Trade Ministers always attend the customary meeting of around 30 Trade Ministers that is held in the margins of the annual Davos meeting in Switzerland. I attended my first Davos meeting in 1982 when it was called the European Management Forum (it is now the World Management Forum) when I was a young official working as Foreign Policy Adviser for the Prime Minister (first Sir Robert Muldoon, later David Lange). The Davos meeting itself is, in my view, best summed up by the acerbic comment of the brilliant Washington bureau chief of the Financial Times (and author), Ed Luce who said in his ‘Decline of Western Liberalism’ – “Davos specialises in projecting the future from a recent past that took it by surprise..Davos has made a brand of its blowed dried conventional wisdom”
But the meetings on the margins of this can indeed be useful. Accompanied by our then Ambassador to the WTO, Dr David Walker, I had a meeting with Minister Chen Deming’s Deputy (whom I had known well when I was Ambassador to the WTO). It was in a coffee bar in the Davos village. No NZ Trade Minister can afford the exorbitant hotel bills in Davos during the Davos Symposium so we had to drive every day up to Davos and use a coffee bar for our meetings. I said to this senior official (who spoke flawless English): “I want to drop an atomic bomb on China”, to which he repled “What exactly have you got in mind Tim?”.
I went through the political logic. The previous Labour Government under Helen Clark had negotiated the outstanding FTA with China – China’s first ever FTA with NZ; In 2009-10, and as now as Sir John Key’s Trade Minister, I had just completed a comparable trade agreement with the separate customs territory of Hong Kong, Macau and associated islands; I now wanted to extend this pattern of successful engagement to the third (and separate) customs territory of Chinese Taipei (the official name in the WTO for the Island of Taiwan). My Chinese interlocuteur listened very carefully as I elaborated the thinking and said ‘we’ll get back to you’.
Within a matter of weeks, in spite of its obvious political sensitivity, this had all been digested professionally in Beijing and I was invited to discuss it with the Minister of Cross Straits Relations, Minister Wang Yi (now China’s Foreign Minister). We established the necesssary political understandings and my longstanding colleague, Mr Charles Finny (no longer an MFAT official) negotiated this equally outstanding trade agreement. Over the last ten years, that agreement has again created prosperity for Aotearoa-NZ; the wealth creation process that underpins our small and pleasant country does not happen automatically – it needs care and attention; something that certain groups seem to overlook.
2017: US/China Trading Relationship Starts to Unravel
I had had over many years a close and productive relationship with the Chinese Vice Minister of Commerce (the real ‘front-line’ negotiator on trade with China at the professional negotiator level), Wang Shouwen – another highly professional and accomplished Chinese official and also fluent in English.
Former President Trump, having carried through on his totally counter-productive threat to withdraw from the TPP (Trans-Pacific Partnership) Agreement as the first course in making a meal out of trade, decided for dessert to launch a series of unilateral tariff increases on Chinese imports.
I was in 2017 our Ambassador to the United States. Vice Minister Wang Shouwen, along with his senior negotiators, after they had finished their official talks with the key US agencies, called on me at the NZ Ambassador’s Residence in Washington. Our Residence in Observatory Circle is, incidentally, directly opposite the Vice President’s Residence, next door to the vast and heavily guarded British Ambassador’s Residence and across our back fence is the private home of former President Clinton. The NZ Government does not have to spend a lot of money on physical security: we can free ride theirs. Goodness knows what the US agencies, who are monitoring the passage of every passing chipmunk up and down Observatory Circle, would have made of a small busload of Chinese negotiators piling out to call on the NZ Ambassador.
We discussed US trade policy and I gave the Chinese my private view as to where this was moving.
Prior to becoming a Member of Parliament in 2005 Hon. Tim Groser held a range of senior trade and economic roles with the Ministry of Foreign Affairs and Trade and was the New Zealand Ambassador to Indonesia from 1994-1997, Chief Executive of the Asia-New Zealand Foundation from 1999-2002 and New Zealand Ambassador to WTO from 2002-2005. While in Government he was also the Minister for Climate Change Issues, Minister for Conservation and Associate Minister of Foreign Affairs.
Rt Hon Sir John Key – Prime Minister of New Zealand (2008-2016)
As Prime Minister of New Zealand, right from the start of my relationship with China the Chinese government rolled out the red carpet, literally and figuratively.
It was obvious to both sides that the relationship stood to be a win win and the scale of the opportunity was enormous. That was why the Premier and I agreed on such an ambitious target.
Both New Zealand and China are trading nations. Our scale is of course completely different but China has always looked to New Zealand as a trusted partner for food supply.
New Zealand is, I believe, uniquely placed to be a great conduit between the East and the West . Our history, culture and commitment to the China New Zealand relationship is something to be proud of and carefully maintained as future generations of New Zealanders and their businesses will benefit greatly from such unparalleled access to what one day will be the largest economy in the world.
Pat English – NZTE Trade Commissioner to Shanghai (1997-2000), Beijing (2002-2005) and Guangzhou (2009-2013)
My time dealing with and working with China covers about 30 years, I’ve experienced and seen how China has changed and evolved; as a people, as a cultural and as an economy. China has defied all predictions and exceeded all expectations; with growth outpacing all that was expected of it and more. China has mobilized and energised it’s economy, its infrastructure and it’s industries. China has leapfrogged technologies and created from nothing global service models and systems. China can never be what we expect it to be; it will always need to be more, do more and grow more.
Rod MacKenzie – NZTE Group General Manager North Asia (2003-2011) and Regional Director China (2011-2014)
North Asia was my main focus at NZTE for nearly eleven years, from 2003 onwards. My previous assignment had been North America where I had not been required to take much notice of Asia. The CEO of NZTE who, as it turned out, knew much more than I did assured me that I would revel in the Asian region. And I did. In fact, 20 years on I am still based here, no longer with the NZ Government but working with a long-established Cantonese food group.
During those eleven years a monumental shift occurred in both the importance of China to New Zealand and, of course, the value. The 2008 FTA signing obviously caught the attention of New Zealand exporters. But there had already been a marked surge in NZ goods and services heading to China. The FTA improved things and gave the PRC more visibility in New Zealand, but the enthusiasm for doing business in the greater China area had already been growing fast.
Far more analytically minded people than me have studied the FTA and the significant benefits it delivered. But when I reflect on the surge in business that occurred both before and after the signing, I think that there was much more going that generated the explosion in China/New Zealand trade. The prospect of China excited New Zealanders then and still does today.
One of the more obvious signs that things were going to happen, and fast, was the number of people that visited China and made use of NZTE’s services. Pre-FTA there were already far more visitors meeting with us than I had ever experienced in North America. People who had never visited China before, didn’t speak the language and had little idea of the culture would appear out of the blue and want to know how they were going to make money selling to 1.4 billion people. Post-FTA signing and particularly during the Shanghai Expo in 2010, all of the NZ Government agencies in China were swamped with potential exporters, keen to learn about doing business and how to get started.
The Shanghai Expo was effectively 6 months of non-stop trade missions led by, what felt like at the time, every Minister in Cabinet. Some, including the PM himself, multiple times. My doubts about the cost effectiveness of large-scale Expos were dispelled by the clear impact these visits had on New Zealanders and Chinese alike. The former because the missions gave them access to people and places they wouldn’t normally go and the latter because they were generally interested in what New Zealand could offer. Many relationships were formed around this time.
When New Zealanders and Chinese get together, they usually get on very well. And that’s important. It’s virtually a cliche in Chinese business that the signing of a contract is just the very beginning. It’s the relationships that matter. China is not a short term, light touch market. It’s an endurance race. The New Zealand companies that understood this have largely succeeded.
New Zealanders’ preparedness and attitudes also improved markedly over this time. The incremental effect of the many online resources, seminars, in-market resources and everything else that was put together by both Government and NGOs over the eleven years made an impact. People learned very quickly not to take China lightly.
It’s why we built ‘New Zealand Central’ in Shanghai. It was designed to be a place where New Zealand companies could establish a short-term presence in China and to showcase their products, right in the heart of one of Shanghai’s more upmarket areas. The Australians never forgave us. And it’s still there – 13 years later.
There’s astonishing potential to be realized in China. In this very different role that I now have I see that opportunity but also the threats. These need vigilance and perseverance and cannot be easily handled long distance. Whether it’s a pandemic, a sudden change in business regulations, lockdowns or any number of other issues that can occur, it’s vital that New Zealanders doing business with China do it whole-heartedly and preferably in person. Those that have done so have usually found that it’s well worth it.
Mike Arand : NZTE Trade Commissioner Shanghai (2011-2014)
After first visiting China in 1989, I spent much of 2009 and 2010 bringing a NZ brand into China and I recall, as I travelled to various places, the phenomenal growth over the two decades evident in China, together with the incredible pace of change that was happening at the time. I was then Trade Commissioner in Shanghai from early 2011 to 2014, and following on from the FTA signed in 2008 and the Expo in 2010, it was a hugely exciting (and busy) time with massive interest in developing the China market from NZ companies. What struck me most during that time, is that the successful NZ companies formed a realistic understanding of both their opportunities and also their challenges in China.
John Cochrane: Commtest 2002-2011 and NZTE Trade Commissioner to Guangzhou (2011-2017)
Beijing Years – 2002 to 2011
Arrived in Beijing one late autumn afternoon feeling very much alone and very much intimidated. I was forced to go, ordered by my boss to go to China and “check it out”. I arrived with only a single local sales contact to help me find my feet in this massive and confusing city. A city I would later fall in love with and call my second home.
As the General Manager of Commtest Instruments Ltd, I was enjoying a wonderful and somewhat nomadic life managing strategic relationships in what was then our very Europe-weighted business. I was able to spend several weeks and weekends every year in some of the most desirable spots in Europe. Then my life quite literally changed forever, and for the good, when I was directed by our Chairman to go explore China to understand whether our industrial products had potential there, and whether we could establish local sales partnerships in the country.
Without speaking a single word of Chinese, and only catching small glimpses of China from movies, I accepted the challenge to venture into and explore, and to dig deep into the country and culture, to determine whether or not our company could flourish in this very “foreign” environment.
What struck me immediately about Beijing was the mass and density of the city, one that I had not encountered before in extensive world travel. Yet I was also humbled by the kindness, humility, and helpfulness of the people I met along the way. Both locals and other visiting foreigners and longer term expats warmly embraced me. And this is my biggest takeaway from years spent living (on and off) in Beijing. It’s the people – the wonderful people in the city – who bent over backwards to help me succeed, for no other reason than kindness.
One evening in particular I recall playing billiards in Chaoyang district with an eclectic mix of professionals from China, America, Italy, Poland, Spain, Ireland, and yes, New Zealand. All of whom I had only met that evening. Yet, over a few beers and several laughs at my comically inept playing, I learned more in one evening about how to navigate China than I could have learned in weeks of formal classes or some other format. And this is just one example.
Amazing Kiwis and Chinese working in the Embassy and other Kiwi professionals in Beijing, most notably Tony Browne and David Mahon, where extraordinarily generous with their time and insights, as well as genuine friendship and camaraderie, helping me cross the river by feeling the stones.
In a series of months and years, and yes, with a few setbacks, we built a solid and profitable business in China. We directly employed up to 15 local staff in Beijing in a variety of roles and positions, many of whom remain friends to this day. We swiftly became the most successful foreign company in our product category, which in turn led to a major US corporation acquiring our business, primarily based on our success in China.
Yet far beyond commercial success measured solely in dollars and cents, the real successes I treasure were in the areas of career building, life experience enrichment, enduring friendships, cross-culture understanding and empathy, worker safety, positive environmental impact, higher productivity, all leading to an enhanced quality of life by those we were so fortunate to work with.
Guangzhou Years – December 2011 to January 2017
Arrived in Guangzhou without having visited southern China previously. The farthest south I had been was Shanghai. My previous working and living experience in China (2002 to 2011) had been heavily focussed on Beijing and the adjacent “Dongbei” region, the heavy industry “rust belt” of China. Yet the challenge of learning about and settling into a new region, and a new culture, and new attitudes, all proved very interesting to me. The time spent in Guangzhou, and serving seven southern provinces, clearly showed to me the wonderful diversity of China.
In early 2013 we hosted the first New Zealand PM visit in 26 years. Sir John Key and his delegation chose Guangzhou as their first stop in country. This is somewhat out of bounds in terms of Diplomatic protocol, as Beijing is ordinarily the required first stop. And yet the request to begin the mission in Guangzhou was accepted by the Chinese side.
Guangzhou and Guangdong systems were not particularly well oiled for receiving foreign heads of state, or heads of government, especially as the first official entry point into China. And so working closely alongside the Embassy in Beijing, and alongside MFAT colleagues posted into Guangzhou for the visit planning, a detailed minute-by-minute plan was prepared that ensured the events occurred without the slightest hitch.
One special highlight during the PM visit was an announcement that there would be a significant agency expansion (and relocation) of the Guangzhou Consulate. The PM signalled a ‘doubling down’ on southern China.
At the time of this announcement, the Guangzhou Consulate was entirely an NZTE post, with the Trade Commissioner performing double duties as Consul-General, paired with a single representative from Immigration NZ. In the span of several months following the PM Mission, the Consulate grew to include MFAT seconded and local staff, NZ Police, Education, Tourism, with INZ remaining and increasing. We eventually became a fully functional six-agency post offering full services to New Zealand citizens and businesses in Southern China.
Over these years we hosted numerous New Zealand Mayors, Cabinet Ministers, and other official delegations, all of which helped to put Guangzhou, and southern China in general, on the radar for a greater number of New Zealand business people and government officials.
Being part of the team who turned what was once an obscure seldom-visited diplomatic post into one of the most active and dynamic in the world was an experience of a life-time. Commercially speaking, across five years, the NZTE team facilitated the introduction of over 40 new products into southern China, opened three new retail channels, all contributing to a total of NZ$145mn in goods trade that would not have otherwise occurred.
The most gratifying to me was when it was revealed in an NZTE customer satisfaction survey that the Guangzhou team provided the strongest value-add and were rated as the international team that provided the highest level of customer satisfaction. No longer hidden, no longer obscure, it was our Guangzhou team’s time to shine.
Liam Corkery: NZTE Trade Commissioner to Beijing (2014-2018)
As I reflect on the five years I spent living in Beijing supporting the development of New Zealand’s trade and investment relationship with China, it feels like it was very much a game of two halves.
For the first half we were charging along with unstoppable momentum. Sailing conditions were perfect, the winds were behind us, and the seas were smooth. In the second half, the winds began to shift and seas became more choppy. This caused many to worry, but despite the more challenging conditions we continue to hold our course.
John Key was New Zealand’s Prime Minister and Xi Jinping was in the early stages of his first term when I arrived. The sentiment among both political and business leaders was one of enthusiasm and optimism. Everyone was focused on the seizing opportunities, and with rising purchasing power China had quickly and somewhat unexpectedly emerged as the most important market for many New Zealand industries.
John Key championed the seizing of these opportunities during his many visits to China, but it was Xi Jinping’s visit to New Zealand in late 2014 that I think was the most catalytic. That visit provided Chinese companies with an important signal, and in the years that followed in-bound investment flows grew dramatically. By the time I left China we could point to more than $10 billion of Chinese direct investment into New Zealand companies. Two-way trade had also grown beyond the stretch-target of $30 billion that Xi Jinping and John Key had set together.
New Zealand companies steadily increased their commitment to China and many opened new offices. Like them, NZTE grew its team, opened a new office in Chengdu and moved into a large new Embassy in Beijing. Despite this enthusiasm New Zealand’s outbound investment into China was comparatively modest.
In hindsight conditions began to shift after President Trump came to power and the US re-framed its China relationship as one of strategic competition. Their diplomatic relationship deteriorated, trade measures followed and then tech sector restrictions. This changing mood in the US slowly but surely influenced sentiments in New Zealand as well. The mood of business in New Zealand has shifted somewhat from seizing opportunities to being mindful of the risks associated with over-exposure to China.
Despite these geopolitical challenges, and the Covid challenges that followed, bilateral trade has held-up remarkably well with few major issues. I am encouraged by this resilience, and I attribute it to the personal relationships that I saw developed by the many good and well-meaning people that were engaged in international business at the time. It is these relationships, the manaakitanga shown by both sides, and the enduring friendships that resulted that I think give ballast to the bi-lateral relationship. This ballast gives me confidence that together we will continue to hold a steady course, and maintain our speed as we navigate whatever choppy seas we may yet encounter.
Damon Paling – NZTE Trade Commissioner to Shanghai (2016-2019)
The trade relationship between the two countries is influenced by political factors, such as trade policies and geopolitical tensions, and in recent years both governments have done a fine job in navigating through what is an increasingly complex world. This stability in the relationships creates a sound platform upon which New Zealand businesses, large and small, can invest and make commercial decisions.
In the past decade or so, for many New Zealand exporters, China has transformed from an emerging to a mature consumer market. The economic power of Chinese consumers has grown considerably over the past decade and this underscores the importance of understanding their evolving needs and preferences in order to succeed. Examples of this include shifting demographics such as an aging population, the growing middle class, urbanisation, a shrinking workforce, and the rise of e-commerce.
Those New Zealand exporters who are truly across these new consumer preferences and purchasing patterns have all engaged Chinese talent at various levels and divisions within the organisation – both at head quarters and in the market. The successful recruitment and engagement of Chinese talent is now a differentiating factor for long-term performance in the market.