Photo : D.R.
Since it joined the World Trade Organisation (WTO) in 2001, China has become the workshop of the world, inundating foreign markets with its products. Beijing is also gradually opening its vast domestic market, totalling 1.3 billion people, to foreign exporters. A first step in this direction was made when China entered into a free trade agreement with New Zealand in 2008, the first agreement between the Dragon and an industrialised country. Beijing already has various agreements with other countries in south-east Asia and Latin America, but this is the very first time it has opened to a developed economy. Negotiations are currently underway with Australia.
“We export dairy products, wood, mining products, fish and meat. We also promote our education services and tourist industry abroad. The free trade agreement will help bring our two countries together, will give a boost to trade and above all give us a significant advantage over our competitors, the United States and the European Union countries,” explained Charles Finny, President of the Regional Chamber of Commerce in Wellington, the country’s capital on the southern tip of the North Island.
Of course, China is well aware of the opportunities it is offering New Zealand but also of the potential risk of abuses. In order to avoid this, it has asked Wellington to set up a system certifying that products exported to China are indeed of New Zealand origin. The New Zealand Chambers of Commerce are authorised to issue certificates of origin. “For us, it is also a way of generating revenues, which we reinvest in promoting trade in China,” continued Charles Finny. “New Zealand and Australia both have a free trade agreement with Thailand, but the Australians have gained more from this than our businesses because the Australian Chamber of Commerce has promoted the agreement with its members. We are determined not to make the same mistake again. Since June 2008, we have been organising seminars, sometimes free of charge, to encourage our members to export to China.”
The world crisis has led to a drastic fall in the New Zealand dollar against the greenback and the euro, a further opportunity to strengthen the country’s attractiveness in China. For instance, it helps significantly boost the New Zealand tourist industry, one of the economy's key sectors. Moreover, as Charles Finny explained, “many young Chinese students will be unable to go to the United States of America, where universities have become even more expensive, or to Europe, where living costs are higher than in New Zealand.”
Three questions for
Chris Pyke, Marketing Manager at Taylor Preston Ltd, a meat export company based in Wellington, New Zeland.
Commerce International: When did you start doing business in China?
Chris Pyke: “About ten years ago, we mainly worked through intermediaries in China. The majority of our exports – without any intermediaries for the last five years – are low-value products destined for processing. In 2008, we exported 2,600 million tonnes of meat to China, to the value of 5.8 million US dollars (4.6 million euros)."
How did you manage to enter this market?
C.P.: “China began to appreciate the quality of New-Zealand’s meat-based products in the 1990s. From then on, demand has increased constantly; every week, we are contacted by potential new clients. However, Taylor Preston Ltd is trying to limit its marketing channels with China, in a view to intensifying its relations with existing clients. Trade relations with this country have been promoted by various government programmes, with support from New Zealand Trade and Enterprise (New Zealand’s economic development agency).”
What do you hope to see as a result of the recent free trade agreement between Beijing and Wellington?
C.P.: “It is a positive mechanism designed to boost trade between our two countries. Our aim now is to increase the variety and the value of the products we sell in China. This enormous market offers a host of opportunities to market higher added value products in niche markets. The free trade agreement will help meet this objective.”
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