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Speech to China Agricultural University, Beijing

Rt Hon John Key
Prime Minister

Speech to China Agricultural University, Beijing

It is a great pleasure to be in Beijing today.

And I’m pleased to be here at the China Agricultural University for the first time - thank you for your warm welcome.

This is my fourth visit to China, reflecting the strength of the bilateral relationship between our two countries.

It also demonstrates the importance we place on the relationship and the potential we have to take it even further forward.

With me today are New Zealand’s Minister of Trade Tim Groser, and our Food Safety Minister, Nikki Kaye.

Agriculture is a key theme of my visit so it is particularly appropriate for me to be at this university.

The first university president from China to visit New Zealand was President An from CAU, back in the early 1980s when your university was known as Beijing Agriculture University.

CAU has longstanding relationships with two New Zealand universities, Massey and Lincoln.

There is another link which is quite unique – this university is the home of rugby in China.

I must say it’s great to see that New Zealand’s national sport has been exported here to Beijing.

Yesterday I had a successful meeting with Premier Li Keqiang in the Great Hall of the People.

We agreed that New Zealand-China relations are continuing to develop and mature, whether it’s political engagement, trade flows, people-to-people links, or even in working together to deliver development assistance in the Pacific.

Defence exercises and cultural exchanges are also areas of development.

For New Zealand, China is a very significant relationship.

Last year we celebrated the 40th anniversary of diplomatic relations between our two countries and took some time to reflect on how far we have come.

Our economic, political and security relationships are built on solid foundations and continue to strengthen, with all the signs suggesting that will continue.

Today I’d like to talk mostly about our economic relationship, and in particular New Zealand’s role as a high quality, efficient producer of food.

Bilateral economic relationship

New Zealand’s economic relationship with China has deepened markedly in recent years.

We have seen rapidly escalating demand from China as people have become wealthier, and naturally turn to higher quality products. As a high quality food producer, New Zealand is well placed to help meet that demand.

Our 2013 trade statistics show that New Zealand’s exports to China were up by 45 per cent to just under NZ$10 billion.

This confirms China’s position as the number one market for our goods.

To put this into perspective, when I first visited China as Prime Minister in 2009, the same figure was just over $2 billion.

So we have gone from $2 billion of exports to $10 billion very quickly, thanks to the historic Free Trade Agreement – the first in the world between China and a developed country - that was signed in 2008.

China has also benefited significantly from the FTA.

Our imports from China are increasing faster than from any other country – rising more than seven per cent, or three times higher than New Zealand’s total growth in imports.

Clearly our trading relationship is on the way to achieving our shared goal of $20 billion in total trade by 2015. Currently, our two way trade stands at $18.2 billion.

Our people to people links

Our relationship is built on much more than just trade, however. It has been exciting to witness the growth in our people to people links.

Over the past five years, visitors from China have more than doubled.

China has overtaken the United Kingdom to become our second largest source of tourists, with 240,000 visitors last year. China is also our largest source of international students.

In turn, about 130,000 New Zealanders visited China last year, enjoying your fascinating country, with its rich history and culture.

Our investment relationship

Another feature of our strong bilateral relationship is two-way investment.

The biggest New Zealand investment in China is Fonterra’s dairy farm programme. By 2020 it is estimated that Fonterra will have invested $1.5 billion into 30 farms.

China only started investing in New Zealand in the last five years or so, but growth has been rapid and across a range of sectors. Nearly half is in infrastructure and utilities, 20 per cent in primary industries and a further 17 per cent in manufacturing.

The single largest Chinese investment is Haier’s $927 million investment in Fisher & Paykel, a New Zealand brand famous for its smart household appliances. The most rapidly growing new sector is the tourism industry.

My government welcomes overseas investment in New Zealand, because it adds to what New Zealanders can invest on their own.

It creates jobs and increases incomes.

We have transparent and fair investment rules and we apply them consistently across all potential investors.

In short, we are a good country to do business with. According to the latest Ease of Doing Business survey, New Zealand ranks third best in the world overall, behind Singapore and Hong Kong, and number one in terms of investor protection.

If we take a closer look at our trade relationship with China, most of the strong gains in exports in recent years have come from the booming dairy trade.

Less known is that there has also been strong growth in wood, meat and a range of other products, and there is potential for those areas to keep growing strongly.

Partnering with China

We see China as much more than a place to simply sell our products.

We see China as a partner.

The future for New Zealand’s food production is in partnering with others in our region. What can we offer those partners?

We have knowledge and expertise.

We are world-class, highly-efficient food producers.

We have very high food safety standards, backed by world-leading technology, so consumers can have the utmost confidence in our products.

To us, food safety is paramount.

We are the world’s largest exporter of trusted dairy products and lamb, and a major supplier of high quality beef, kiwifruit, apples, honey and seafood.

We have been exporting food for over 130 years, and we now export to over 100 countries worldwide.

Our natural environment, our open spaces, our long history of caring for our land, resources and animals means we produce some of the best and safest food in the world.

One of New Zealand's greatest assets is our relative geographical isolation - less than 10 per cent of the world's pests and diseases occur in New Zealand.

A stringent border security and biosecurity regime makes sure it stays that way.

Because food production is central to our economy, New Zealand has invested heavily in food and agricultural science, research and innovation over many years.

We have specialist agriculture universities - Massey and Lincoln universities - and we encourage students to take up study in these areas, including Chinese students.

As a government we have launched the Primary Growth Partnership, which sees long-term innovation programmes jointly funded by government and industry.

We are also part of the Global Research Alliance – along with China - to find scientific solutions to greenhouse gas emissions from agriculture production.

We’ve improved the way we produce food remarkably over the years.

We can partner with China in technology transfer, including in animal husbandry. New Zealand has already achieved significant agricultural production improvements while China is keen to learn from New Zealand’s ‘advanced knowledge’.

In sheep management, for instance, how does New Zealand keep producing the same amount of wool and meat even though our sheep numbers have reduced by one-third?

It’s because of our sophisticated technology. This is something China could benefit from, given your commitment to protecting grasslands, and therefore needing to reduce per unit consumption of grass.

Cooperation is already underway in some areas. New Zealand scientists are working with Chinese counterparts in western China on producing sheep that can breed all year round.

And there is a joint food security project underway between New Zealand scientists and China Agricultural University.

Technology has taken us forward in many ways, improving our efficiency, making our products more environmentally friendly, and improving overall quality.

New Zealand’s food safety system

In New Zealand we also have a robust and high quality food safety regulatory system.

This was the finding of a recent independent review of the food safety system in 2013.

The Inquiry report found that New Zealand’s food safety regulatory model is among the best in the world.

The focus of our system is on effectively identifying and using science and best practice processes to manage risks.

New Zealand’s food system is underpinned by laws which regulate all aspects of animal production—including dairy and seafood products—up until they are exported.

New Zealand also regulates what medicines can be given to our animals, and what fertilisers and pesticides can be used on plants and pasture.

We pride ourselves on the high quality food we produce and export around the world – this is an integral part of our economy and our reputation as a trusted food supplier.

New Zealand’s food safety laws are based on a central principle of New Zealand's Government – transparency, which means being open about issues and concerns.

This is why we act quickly to communicate potential food safety issues with consumers domestically and overseas, even before we know for sure there’s a problem.

To ensure our food safety system remains safe and trusted, we are always looking for areas where we can improve.

If we identify an issue, then we investigate it and make the needed improvements—and we do so openly.

China’s food safety regulatory systems are undergoing extensive changes, and we want to work more closely together as China develops new regulations.

We have, for instance, signed a Food Safety Cooperation Agreement last November.

Under that, our Ministry for Primary Industries and the China Food and Drug Administration will launch a scholarship programme. Details are still being worked through, but it is likely to cover food safety policy development training, internships and risk management development programmes.

In New Zealand, our regulatory system covers the entire supply chain and ensures its integrity and accountability. This means commercial supply chain arrangements in New Zealand can be flexible, while meeting required food safety standards.

New Zealand recognises that consumer health and safety—both in New Zealand and overseas—should always be the paramount concern when regulating food.

The New Zealand government has a work programme in place to further strengthen confidence in our systems to match the rapid growth in our exports.

As I said earlier, we do not see China just as a place to sell our products.

Agricultural cooperation

We are looking to partnerships where they can make sense, such as agri-business.

New Zealand can make some further efficiency and productivity improvements, but the fact is we do not have much more land for agricultural production.

Our future lies in more and more sophisticated product development, and in investing globally.

We support the significant advancements made in modernising Chinese agriculture which have already lifted hundreds of millions of people out of poverty.

We also understand that this is an ongoing process. Although New Zealand is much smaller than China in size and population, we are a committed partner, and have deep experience in certain areas.

We can offer unparalleled expertise, reputation and capability in pastoral farming systems.

Whether it’s sheep or cattle, we lead the world in our ability to efficiently convert pasture to protein, and the smart systems and technologies that surround it.

These range from food safety to processing and logistics. This is expertise that can be applied in other countries to support their farming systems.

During this visit to China I have announced a new programme of agricultural cooperation between New Zealand and China.

New Zealand agribusiness technology and management companies are also working with China’s agriculture sector, particularly in dairy and sheep farming and food safety.

There are opportunities to work together on milking systems, animal genetics, animal management and feed conversion efficiencies.

So we look forward to many more partnerships here in China and in New Zealand that take our relationship to new levels.

To conclude, I’d like to reiterate that the New Zealand government and companies are committed to continuing to improve our relationship with China.

Our trade relationship has changed rapidly over the past five years. The successful Free Trade Agreement has helped provide a strong foundation on which we can build further.

Our economies can be complementary to one another, and our people-to-people links can continue to strengthen.

We look forward to China hosting APEC later this year and to working cooperatively with you to ensure that the goals set for the year ahead are achieved.

It’s a pleasure to be here today, and I’d like to take your questions now.

Thank you.


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