5 - Trade and Investment Overview: A New Zealand Perspective

Summary

Sir Dryden stated that his analysis was based largely on a review commissioned by the Asia New Zealand Foundation, written by Professor Anthony Smith, who was also present at the symposium.

Professor Anthony Smith had stated, and correctly, according to Sir Dryden, that New Zealand's “lack of capacity, small size and distance from Southeast Asia puts limitations on the types of relationships that it can realistically expect”. This helped to explain why New Zealand was perceived internationally as a team player respected for its neutrality, and for working multilaterally through international forums, Sir Dryden continued.

He announced that about one-third of New Zealand's trade was with Asia, and this included an intensifying courtship between Beijing and Wellington, as highlighted by the recent visit to New Zealand by Chinese Premier Wen Jiabao. China was now New Zealand's fourth largest trading partner behind Japan. This relationship was worth US$3.4 billion per year. He noted that the two countries were presently working towards a preferential trade deal that was expected to increase New Zealand's exports to China by between US$34 million and US$248 million annually. Imports from China should also increase by US$43 million to US$62 million annually.

Furthermore, Sir Dryden said, there were almost 30,000 Chinese students enrolled in New Zealand at various levels. He added that Air New Zealand was in the process of starting direct flights to Shanghai, which was understandable given that 85,000 Chinese tourists visited New Zealand every year.

This state of affairs, he stated, contrasted greatly with New Zealand's relations with ASEAN as a whole. Despite having 500 million people with a combined GDP of US$737 billion, the region accounted for only 8 per cent of New Zealand's exports. Imports from the region were just as low, and New Zealand's FDI in the ASEAN region was minimal.

Southeast Asia was a region that New Zealand could not afford to pass up, said Sir Dryden. While exports to China were expected to grow from 10 per cent of New Zealand's total to 20 per cent within ten years, exports to Malaysia, Thailand, Singapore and Vietnam were projected to remain the same, or even decline.