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Speech to the Nelson Seriously Asia Workshop

12.30PM
23 SEPTEMBER 2003
Speech to the Nelson Seriously Asia Workshop

Asia 2000 Foundation Executive Director Mr Christopher Butler


Welcome to the Nelson workshop, part of Asia 2000’s Seriously Asia project.
What I want do today is to explain what this project is about and how you can help us reach our goals. I also want to underline how important it is that we should reach them.

I realise that many of you here know why Asia is important. But just to reinforce the point, I thought I would paint a hypothetical picture that illustrates why we need to work harder at unleashing the energy of New Zealand’s Asian links.

But first of all what is Seriously Asia?

New Zealand’s economy is strongly linked to Asia:
- 35% of trade
- one third tourism revenues
- 80% international education sector
- nearly 20% of total inward investment

For New Zealand the importance of Asia to New Zealand cannot be overestimated. Based on my ‘back of the envelope’ calculations, the value of New Zealand’s links with Asia are equivalent to just over one fifth of the New Zealand economy when you take into account exports and imports to and from Asia, export education revenue and tourism.

It is interesting to note too that the Maori economy, which makes up 1.4% of NZ’s total economy, is more significantly open to the rest of the world than the New Zealand economy as a whole. And that openness includes Asia of course.

This exposure is driven by deep Maori involvement in the fishing, forestry, tourism, and agricultural industries. In the fishing sector for instance 20% of NZ's quota is jointly controlled by two Maori businesses, Sealord and Moana Pacific Fisheries. In agriculture, Maori agricultural output is estimated to be about 7.4% of the NZ total. Both sectors are high export earners for NZ, especially in the Asian region.

Those of you who are already dealing with Asia will know the importance of this region to New Zealand’s future. If anyone has any doubts imagine what New Zealand might be like without one fifth of its economy.

A very bleak picture would be painted if New Zealand cannot maintain, let alone increase, the ‘Asian’ share of the economy. Already we are concerned about not being in the top half of the OECD growth table. Without one fifth of our economy we would be worrying about being on the growth table at all.

If we are not earning export dollars from the Asian region we cannot spend on imports either. And imports from Asia have improved the quality of daily life for virtually every person in the country.

I am not just talking about cheaper cars from Japan. I am also talking about the household savings that have resulted from high value clothing and house wares from China, and electronic goods from Malaysia or Korea. While we may be able to source similar products from other countries, they would be from less efficient suppliers and would not provide shoppers with the same kind of value for money.

Other impacts would come from the loss of tourist spend. Many hotel industry chains are Asian owned and many Asian tourists fill their rooms. Without these tourists, who brought in one third of all tourism revenue last year, NZ jobs would go. A rough calculation is that for every dollar an Asian tourist brings in there is a multiplier of around four, and a good proportion of those four dollars are spent in regional economies.

There is a similar story with respect to international education receipts – valued last year at over one and a half billion dollars. Many student dollars have been spread around public utilities such as transport, home-stay households and small businesses. And the students have also had a significant impact on the tourism sector. According to an Australian study, every student provides a reason for four other visitor arrivals.

Our wool industry’s fortune is dependent on whether China is buying wool or not, and when it does not our wool receipts plunge. A similar Asia factor holds true for other industries represented so well here in Nelson, such as seafood, horticulture and forestry.

The lesson from this picture is very simple. It is very much in New Zealand’s interests to look seriously at its engagement with the Asian region.

This is not simply for defensive reasons. The one fifth of our economy that Asia now represents can develop further and faster because Asian economies continue to outstrip the world in terms of growth. While world GDP grew 1.7 percent last year, East Asia and the Pacific grew at 6.7 percent. The projected growth for East Asia (excluding Japan) is 5.6% for 2003, and Japan itself (the world’s second largest economy) has also returned to growth.

Despite this economic dynamism in our own part of the world, the paradox is that the value of NZ exports to Asia fell 12% in the year to June 2003.
It is a fact that we need Asia more than Asia needs us!

We need to ask ourselves whether oversimplified or outdated perceptions of Asia are putting at risk both present gains and future opportunities. New Zealand gained an idea of potential impact following the financial crisis of 1997. The number of tourists from Korea plummeted, and there were similar declines in students from Malaysia and other origins. There was a smaller parallel experience with last year’s SARS outbreak.

While these impacts resulted from external events, there are times when we need to ask ourselves what we can do to avoid shooting ourselves in the foot closer to home.

I was appalled to read in the NZ Herald about recent coverage of New Zealand in overseas Asian media. An internet newsgroup (soc.culture.japan) reportedly described NZ as ‘the most racist nation in the South Pacific’. In China, the country of origin for up to 40% of our international students, the semi-official People’s Daily with a circulation of 3 million, reported that young Asian students in NZ are getting hooked on crime and that at least 20 have died in the last 6 months.

Of course there is an argument as to whether such claims are accurate, but the mere fact that a popular image of this kind is being put into the minds of crucial partners is very concerning indeed. It is particularly concerning when you consider the power of word of mouth in shaping decisions on tourism and educational outcomes.

There is a very tight linkage between trade, investment, tourism and education and the bottom line of all of them is contained in that Asian keyword “relationships”. How is it that sufficient misunderstanding has arisen in our relationships that images such as those reported by the NZ Herald can even begin to exist?

In response to such negative media coverage Education Minister Trevor Mallard led a mission to Beijing last week to reassure Chinese leaders of the quality of New Zealand’s education system and the pastoral care systems which have now been put in place.

In other news, New Zealand was voted the top holiday destination by one of Britain’s top travel magazines, for the third time in a row. That is very fine, of course, but the number of visitors from Asian origins is twice the number of those from Britain.

This includes not only established markets like Japan, new markets like Korea and China, but also emerging markets like India. Last year we had over 17,000 visitors from India, a market that has huge potential and from which high growth rates are expected. Are we prepared for the same kind of learning curve we experienced when visitors from Japan first started to arrive in numbers?

For New Zealand the Asian region is the ‘new world’ as we ourselves used to be, and our challenge is that we do not yet know enough about this region, its culture, peoples, history, languages and societies.

Having Asian knowledge is becoming imperative as we watch the region develop at an astounding rate and as Asia increasingly touches New Zealand’s shore in the form of residents, students, investors, traders and tourists - and as we eat sushi, sleep on futons or use a dryer made in China.

Asia is no longer ‘out there’ it is increasingly part of New Zealand. I recently saw a homemade poster on a university pin-board. It read “Future Proof your Degree – Include Asian Studies”.

New Zealanders will continue to engage more closely and deeply with a region situated on our doorstep. We must recognise that Asia is more than just China, that opportunities exist in countries such as Vietnam and India, that there are differences between and within each country, and that the word ‘Asia’, while a useful shorthand, actually conceals more than it reveals.

Those of you here already involved with Asia have important knowledge about the cultures and traditions of its countries, how business operates, and about how relationships are created and maintained. Such knowledge could be shared to the significant benefit of New Zealand’s emerging traders. If each established trader mentored another business wishing to engage with Asia, and they once established mentored another business, you could make a real difference.

Another means of sharing knowledge is your participation in this workshop today. You are here because you are either already dealing with the Asian region or you want to. You are here to tell us your experiences, and to tell us what would make engagement easier or better for you. I am looking forward to learning from you and welcome the opportunity of sharing our Seriously Asia project.

Seriously Asia project outline:

See www.seriouslyasia.org.nz

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