Hon Phil Goff
Minister of Trade

08 April 2008 Beijing

Speech Notes

Navigating China Seminar

It has been a long and demanding path to get to the conclusion of a Free Trade Agreement.

The proposal for investigating the implications of such an agreement was made in 2003. It was obviously a big challenge. On one side the world’s most populous nation of 1.3 billion people, on the other side a small South Pacific country of just 4 million people. The former a developing country, the latter a developed country.

It was important to seize the opportunity of negotiating an agreement. China is vitally important to us as our fourth largest market. On the surface we were of somewhat lesser importance to China as its 50th ranked market.

The advantage we had was that we had established ourselves as a useful and well-regarded partner, having been the first to negotiate an agreement with China for its accession to the WTO and to not discriminate against China by recognising it as a market economy. That worked in our favour.

It was also an advantage that as countries we are largely complementary in what we produce and specialise in.

Yesterday, we were therefore able to celebrate the historic occasion of establishing the fourth first of being the first developed country to conclude a free trade agreement with China. Furthermore, it was an agreement in which we went well beyond what China had negotiated with any other country.

Negotiating the agreement was a role for government, which through the skilled and committed efforts of David Walker and his team we were successful in concluding. To get to where we did, we worked in partnership with our private sector stakeholders, consulting as much as we could so that your interests and needs were taken into account as fully as possible as the negotiations proceeded.

The agreement opens the door for trade with China more widely than before and opens up big new opportunities. The occasion of its signing and the process of the negotiations has raised New Zealand’s profile and provided the opportunity to leverage off that profile.

But now the challenge shifts from being predominantly one for government to a challenge facing business.

Governments don’t trade. Private sector businesses do.
Your willingness, commitment and ability to create a product or service for which there is a demand and to market it effectively will determine the extent to which New Zealand gains value from the Free Trade Agreement.

That however does not mean that you are on your own and that the Government opts out at this point. The partnership and the New Zealand Inc approach which worked so well during the negotiations continues to be important.

This seminar, the roadshows which New Zealand Trade and Enterprise have planned over the next few months, the NZTE Website www.ChinaFTA.govt.nz and a number of other initiatives are designed to inform New Zealand enterprises about the content of the FTA and how to take advantage of the opportunities it opens up.

NZTE in February set up a North Asia Beachheads advisory board chaired by David Mahon, managing director of Mahon China.

David has been in business and lived in China since before 1984, establishing a successful private equity firm here. He knows China well.

With support from NZTE, David will be recruiting additional advisers to the Beachheads board. Each will have experience, extensive networks and considerable knowledge which will be made available to New Zealand companies seeking advice.

Experience with other Beachheads has shown that access to this sort of advice is a hugely valuable resource for New Zealand companies wanting to enter the market or expand their presence here.

NZTE already has offices in Beijing, Shanghai and Guangzhou working with New Zealand businesses. It is planning to open up to five more offices in China over the next four years. This will enhance its ability to assist businesses wanting to operate beyond the main centres.

NZTE will also be opening a New Zealand Concept Centre in Shanghai. The centre will be designed to help New Zealand businesses build connections, brand awareness and capability in China.

In Shanghai we are also preparing for New Zealand’s presence at Expo in 2010, with a prime site four times larger than we had in Aichi, ready for the estimated 70 million visitors to the Shanghai Expo. This is a unique and important opportunity to showcase New Zealand.

New Zealand is also establishing a presence for the Food and Beverage sector at the annual Food and Hotel China trade shows which was very successful last year.

Further attention will need to be given to New Zealand’s overall image and branding in China. NZTE research found that New Zealand business culture was seen as being ‘high on human values, but low on business acumen’.

We were seen as enthusiastic but lacking the ability to compete in international markets.

New Zealand benefits from a ‘clean green’ image but needs to develop beyond this into being seen as a clever, innovative, highly developed and high tech country to avoid being dismissed as simply an agricultural backyard of Australia.

As a country of 4.2 million people endeavouring to make an impact in a country of 1.3 billion, we need to target our approach to those areas in which we are international leaders.

That suggests a focus on areas such as food and beverage, wood innovation, ICT, agri-technology, education, creative industries and environment technologies.

Can I finally welcome the large number of businesses which have taken advantage of the occasion of signing the free trade agreement to come up to China.

For those of you for whom this is a new experience there is no substitute for being in the market in person and with the help of others with more experience getting to know it at first hand.

You will find that there are others who are happy to share their experiences with you.

The Website includes comments and advice from those who are familiar with the market. New Zealand people based in China have established a Kiwi Expatriates Abroad organisation now numbering around 430, with members largely from Shanghai and Beijing. They have in-market experience which they are keen to share with other Kiwis.

Kea China is managed by a regional manager and an 18-member advisory board. They represent not only an accumulation of significant China business experience but also a ready made network of business contacts available to delegation members.

You will have the opportunity to meet with some of them tonight.

Another resource is the large number of New Zealand-Chinese businesspeople who are part of the delegation. The New Zealand Chinese community are strongly placed with a knowledge of Chinese language and business methods and opportunities. This can also be of considerable help in a New Zealand Inc approach.

I hope you have found this morning’s insights helpful while this afternoon you will get further advice on market entry, human resources, intellectual property and communications.

Thank you again for the interest and commitment you have shown in taking up opportunities to trade with China which the FTA has opened up. Best wishes for your future business endeavours.

ENDS

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