New Zealand stands to gain from Australia’s loss in China
Stark comparison offers lesson for other US allies in approach to China
Published: May 12, 2021 08:53 PM
A man walks along a wharf in Wellington, capital of New Zealand, on September 22, 2020. Photo: Xinhua

A man walks along a wharf in Wellington, capital of New Zealand, on September 22, 2020. Photo: Xinhua

New Zealand has been charting "a very positive and clear path" in relation to China, in stark contrast to Australia's hostile actions, which could result in major gains for New Zealand products and services in the Chinese market as Australia stands to lose, according to Chinese and New Zealand trade representatives. 

The lift in New Zealand's exports, with their quality in some cases outperforming that of goods from Australia, would gradually erode the shares of products from Australia - a very similar economy - in the Chinese market. Specifically, New Zealand is likely to see increasing demand from Chinese consumers in such sectors as health, dairy, meat and horticulture in the near term amid warming ties.

Analysts said that the trend is a vivid display of how the two neighbors, both members of the Five Eyes alliance with one being relatively independent from the US and the other acting as an attack dog, could gain or lose ground from their relations with the world's second-largest economy with enormous business opportunities.

"New Zealand has the capacity to fill the gap of Australian farm and pasture exports to China," Wang Jiazheng, chief representative of the Guangdong Economic and Trade Representative Office in New Zealand (GETRONZ), told the Global Times on Wednesday. 

Wang noted that Australia and New Zealand have overlapping advantages in many industries, and their main exports share similarities. "Products from New Zealand are in no way inferior to those of Australia, thanks to a unique geographic environment and climate. Some are even superior." 

According to industry insiders, New Zealand's wine exports to China have been jumping in recent months, after the upgrade of the China-New Zealand Free Trade Agreement (FTA) in January, which came on the heels of the signing of the mega Regional Comprehensive Economic Partnership deal. 

Last year, China imposed anti-dumping duties of up to 218.4 percent on Australian wine against the backdrop of freezing ties caused by Australia's constant and unreasonable provocations against China.

A person with a New Zealand-listed company in the wine business, who spoke on condition of anonymity, told the Global Times on Wednesday that "New Zealand wine is quite popular in the Chinese market."

The person said that according to his knowledge, New Zealand Trade & Enterprise, a trade promotion agency, would hold a trade tour next week to promote New Zealand wine in a couple of Chinese cities.

"In particular, white wine from New Zealand has gained wider recognition, especially in coastal areas," said Wang.

Meanwhile, from December to March, Australian wine shipments to China fell about 96 percent year-on-year to just A$12 million ($9 million), industry figures showed.

In addition to wine, a laundry list of Australian exports to China - from lobsters to timber and from hay to coal - have run into hurdles since bilateral relations deteriorated.

"It is fair to say that [New Zealand] demonstrates a difference in approach to that currently being taken by Australia in relation to China," Martin Thomson, chairman of the New Zealand China Trade Association, said at a summit on the upgrading of the China-Australia FTA and the Guangdong-Hong Kong-Macao Greater Bay Area's development. 

The forum was hosted in New Zealand on Tuesday.

Thomson said that New Zealand's relationship with China is very important and there is "a very positive and clear approach to the strengthening of the relationship going forward" despite some difficulties.

Under the upgraded FTA, all New Zealand dairy exports to China will be duty-free as of January 1, 2024, which will improve the competitiveness of New Zealand dairy products in China and speed up the replacement of Australian exports, industry insiders said. 

"The market in China is enormous and substantial," Gao Yan, honorary chairperson of Mengniu Yashili New Zealand Dairy, said at the forum, urging the governments of China and New Zealand to continue working together "to provide political stability for potential economic growth."

In 2020, New Zealand's dairy exports to China topped 26.6 billion yuan ($4.13 billion), up 25 percent year-on-year, despite the challenges related to COVID-19, data sent by GETRONZ showed. That accounted for 40 percent of China's dairy market.

In terms of tourism and international education, New Zealand could also serve as an alternative to Australia, according to analysts.

"We hope steps may be taken to facilitate the gradual opening of borders with China, particularly for students and businesspeople," Thomson noted.

"Unlike New Zealand, which has been continuously looking to improve its ties with China, Australia's cold-war mentality has disrupted normal bilateral communications and cooperation with China, which weighs on its economy and inflicts damage on dozens of its core industries," Wang said.

The stark comparison should teach Australia and other Western economies a lesson, according to analysts. 

Wang added that the key to sustaining mutually beneficial economic ties is to respect one another, improve communication and use mutual understanding to properly handle disputes.