Good morning and welcome to this New Zealand – China FTA Road Show.

I’d like first to acknowledge and express condolences to the people of China for the huge loss of life caused by the earthquake in Sichuan.   

We extend our sympathy to all those who have lost their loved ones and most particularly to the parents who lost their children in the school buildings which collapsed in the earthquake.  

The Chinese Government has responded in a determined and transparent manner to the needs of the survivors and we congratulate them on their efforts and have tried to assist where we can.

Signing a Free Trade Agreement with China is a hugely significant achievement for New Zealand.   With the removal of tariffs and other obstacles to trade, it gives our enterprises a competitive head start in the fastest growing economy in the world.  That creates for us opportunities to export to achieve growth, a better standard of living and more jobs for New Zealand.

Turning opportunity into realising its full potential requires a lot of work.  The FTA Road Show is a part of this effort. 

Now we have the signed the agreement, and with the enabling legislation making good progress through Parliament, we have entered a second critical phase.   Securing the benefits has moved from being predominantly a challenge for government to one also for business.

Governments don’t trade, businesses do. It is businesses’ commitment and ability to create a product or service for which there is a demand and to market it effectively that will determine the extent to which New Zealand gains value from the FTA.

Securing the Free Trade Agreement was a major achievement.   On one side of the negotiation was China, the world’s most populous nation – of 1.3 billion people – and on the other side there was New Zealand, a small South Pacific country of just over 4 million people.

It took more than three years of very hard work and fifteen negotiating rounds to secure the deal.

Throughout that process, we worked in partnership with our private sector stakeholders – consulting as much as we could so that your interests were taken into account as fully as possible as the negotiations proceeded.

Strategically, it was critical for New Zealand to be first to seize the opportunity of negotiating an agreement with China.  Although China is New Zealand’s fourth largest export market, we are China’s 50^th.   

This means that had we not got in first, our exporters would have faced not the advantages we now have but the disadvantage that others would have gained preferential entry before New Zealand.

China is the fastest growing major economy in the world, currently growing at 9.5 percent each year. China’s middle class is now estimated to be more than 100 million people and growing, with another 150 million with increasing disposable income.

This will fuel the demand for New Zealand’s exports of goods and services. There will also be new opportunities for investment in both directions. 

Being the first developed country to negotiate a comprehensive FTA with China gives New Zealand for a time a unique competitive advantage. This will better enable us to strengthen existing commercial relationships, and create new ones.

Furthermore, beyond the economics of the agreement, the FTA also supports New Zealand’s objective of broadening and deepening relations in Asia  and goes towards the goal of strengthening economic integration in the Asia-Pacific.

New opportunities for free trade agreements being explored and progressed with Korea, Japan and India have gained some momentum from the success of completing the China FTA.

One of the key advantages New Zealand had in gaining the FTA was that we had established ourselves as a useful and well-regarded partner.

China frequently raises the four “firsts” in our bi-lateral relationship. 

• New Zealand was the first country to agree bilaterally to China becoming a member of the WTO.
• New Zealand was the first developed country to recognise that China has established a market economy system.
• In November 2004, New Zealand was the first developed country to begin negotiating an FTA with China
• In April 2008, New Zealand was the first developed country to conclude an FTA with China.

China had through the first two initiatives developed a level of trust and confidence in New Zealand which was important in its decision to launch and conclude FTA negotiations with us. 

Additionally there was advantage to China in negotiating with us a high quality, comprehensive agreement to serve as a template for future negotiations.

It was also an advantage that as countries we are largely complementary in what we produce and specialise in, which lessened the number of sensitive issues to resolve.

Over the next two days you will be receiving in depth information from a range of agencies including the experts who negotiated the deal for New Zealand, led by lead negotiator David Walker who did an excellent job for our country.   

Presentations will include advice on tariffs, trade remedies, rules of origin, intellectual property, investment, services and technical barriers to trade.   

You will also be aware of the FTA Website which can be found at ChinaFTA.govt.nz. The site provides detail on the FTA, including the text of the document itself, the National Interest Analysis, fact sheets and key outcomes for New Zealand. It also contains links to all New Zealand Government agencies that are connected to doing business in China.

A tariff finder tool on the site allows people to view tariff rates on 7000 different items – the current rates and the eventual rates that will result from the FTA.

It is indicative of the huge interest in the FTA with China that the Website has already received, at last count two weeks ago, more than 159,000 hits. That is after being in operation for just six weeks.

This Road Show series, which MFAT and NZTE are delivering throughout the country, are designed to inform New Zealand enterprises about the content of the FTA and how to take advantage of the opportunities it opens up.

That is just one part of what is being put in place to ensure that New Zealand can capitalise on the opportunities opened up by the FTA, and to showcase New Zealand to the booming Chinese economy.

The FTA will provide additional market access and a less regulated, more predictable environment for New Zealand businesses.

What we are now committed to doing is to providing the resources and creating the infrastructure to help New Zealand businesses to take advantage of those benefits.

In February this year we announced the first Chair of New Zealand Trade and Enterprise’s North Asia Beachheads Advisory Board, expatriate New Zealander David Mahon.

David has worked in Beijing for more than two decades, establishing a successful private equity firm Mahon China Investment Management Limited.

He will be recruiting additional advisors to the Advisory Board, each of whom will have relevant experience, extensive networks and considerable knowledge to share with companies seeking their advice.

The Advisory Board will be a critical resource for New Zealand companies looking to establish themselves, or expand into China.

NZTE also plans to open up to five more offices in China over the next four years.  These new offices will work closely with New Zealand businesses and increase their engagement with potential trade and investment partners.

These offices will likely be satellite offices beyond its larger existing offices in Beijing, Shanghai and Guangzhou and will enhance the capacity for New Zealand businesses to operate beyond the main centres.

I am also pleased to announce today that the Government is establishing a New Zealand Concept Centre in Shanghai. This will help New Zealand businesses build connections, brand awareness and capability in China.

The centre will offer function and event space, a demonstration kitchen, meeting rooms, serviced office facilities and hot desks.   It will give New Zealand companies the opportunity to demonstrate the best of their capability in a highly branded and professional New Zealand environment.   We hope to open this before the end of this year.

The food and beverage sector will have major new opportunities benefiting from the FTA’s phased reduction in tariffs.  We will be participating again this year at the major Food and Hotel China trade show where we had significant success last time.

With the Shanghai Expo only two years away, plans for a significant presence in and around the Expo are well advanced.  New Zealand’s official participation agreement will be signed on 27 May.   We will be strengthening our presence in Shanghai progressively over the next two years, in the lead-up to the event.

We anticipate some 17 million people will visit our pavilion at the Expo, and have quadrupled the size of the pavilion in comparison to the one we had at Aichi.

All of these Government initiatives are designed to give New Zealand the best possible chance of maximising the benefits of the FTA.

It is an encouraging example of the ‘New Zealand Inc’ approach, where the Government and private sector work closely together.   This approach has worked very well.   As a small country it makes absolute sense to pool our resources.

Another excellent example of ‘NZ Inc’ in action is the Kiwi Expatriates Abroad (KEA) organisation in China.

KEA China now numbers about 430 members, mainly in Shanghai and Beijing. They have great local knowledge, and they are keen to share this with other Kiwis wanting to move into the market.   You will hear during this Road Show from companies who will share their experiences on working in China.

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 a ready-made network of business contacts available to delegation members.

They can give you help to fast track your entry into the market.

The large and growing number of ethnic Chinese-New Zealand business people is a further significant resource for New Zealand.  Chinese New Zealanders were heavily represented in the delegation of New Zealand business people who travelled to Beijing in April.

The New Zealand Chinese community is strongly placed to provide insight and know-how of how the Chinese market works.   As well as their Chinese language skills they understand China’s business practises and the opportunities that exist. This can also be of considerable help in a ‘NZ Inc’ approach.

New Zealand is in an excellent position. But we should not under-estimate the challenges that lie ahead.

New Zealand is not well known in China, especially in relation to trade and investment.  We are largely seen as a tourist and education destination.

Recent research commissioned by NZTE found that international business perceptions of New Zealand were that we lacked strong business acumen. We need to work hard to change these perceptions. 

Researching the market, developing a deeper understanding of it and being committed to a plan for succeeding are critical to our success.

For a country of 4.2 million to succeed in a country of over 1.3 billion, business and government agencies will need to take an approach which targets where we can best succeed in the market.

We will need to work together to ensure we achieve the goals of economic transformation of New Zealand so that it becomes a high skilled, high value added, high tech and high wage economy.

We need an internationalist outlook so that we can benefit from the economies of scale and high productivity associated with trading as part of the globalised economy.

These are both general imperatives and also important for a breakthrough and major expansion into China’s market.  I wish you a productive conference over the next two days and every success in realising the potential for your companies in the world’s fastest growing market.

Thank you.