Impact Of China’s Economic Emergence

New Zealand Businesses More Negative Than Positive About Impact Of China’s Economic Emergence

The emergence of China as an economic force has, on balance, been negative in the view of New Zealand businesses.

According to results released today from the Grant Thornton International Business Report survey, some New Zealand businesses are capitalising on opportunities with the fast-growing BRIC economies (those of Brazil, Russia, India and China).

But when it comes to the economic expansion of China, the survey shows that while 20% of New Zealand respondents have increased business, 27% have experienced a decline. The majority (53%) reported no impact either way.

In the previous year’s survey, 22% said they had increased business, but only 14% cited a fall.

The international accounting and business advisory firm’s survey showed the impact of India’s boom has so far been less marked for New Zealand businesses. In this case there was barely a real net gain, with 10% saying they had increased business and 9% noting a decrease. By far the majority (80%) recorded no impact either way.

Grant Thornton New Zealand spokesperson Peter Sherwin said it was a pity that the positive figures were not higher in the case of both China and India, and it appeared that North American and European countries were doing far better when it came to China in particular.

“Admittedly, New Zealand is a small country, but in an export sense it is not as if we haven’t been knocking on doors in China before this,” he said. “Given that we have been hearing the messages about China for more than a decade, we probably should have more positives, rather than slippage in business growth.”

Mr Sherwin said that there was, however, clearly a level of nervousness within New Zealand commerce about China.

“In the case of India, there may yet be more opportunity and more success. The focus on the potential brought about by the economic advance of India has been more recent, so there may be some improvement ahead. After all, Indian business owners themselves are the most optimistic in the world, according to earlier results from the Grant Thornton survey, and that should be good for New Zealand companies looking for a new market.”

Mr Sherwin noted that business owners in Brazil and Russia (as well as China) were also more confident about their countries’ economic prospects than the global average and it would make sense for New Zealand companies to consider these markets too.

“At present, 95% of the New Zealand businesses surveyed indicate no impact either way from the economic emergence of both Russia and Brazil. Effectively, this indicates little interest, but where there is business optimism there are trade opportunities.

“Clearly, it would be worth New Zealand companies looking at the BRIC economies and assessing the potential that each one contains. Staying alert to economic patterns is one of the ways we can beat the effective stagnation in our export growth.”

ENDS

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