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Prospects for China-New Zealand Economic and Trade Relations in a New Era

(From Chinese Embassy in New Zealand)

2022-11-29 18:00

Executive Director Stephen Jacobi,
Chair John McKinnon, 
Ladies and gentleman,

Thank you for having me here today. For me, it is always a great pleasure to speak to friends from the business community to share my views and at the same time listen to you. As many of you are working first hand at the cutting edge of the evolving relationship between China and New Zealand, you are better placed than most to tell the stories about what is going on in this relationship important for both sides. NZIBF, as a crucial bridge connecting corporates New Zealand and other countries including China, has made important contribution to our bilateral economic agenda and how we interact in the wider regional and global contexts. I wish to take this opportunity to thank Stephen and his team for that invaluable work.

A month ago, the Communist Party of China successfully held its 20th National Congress, which laid out the blueprint for China’s development in the next five years and beyond. I am glad to see that the New Zealand business community pays close attention to the Congress as a window to gain an in-depth understanding of China’s future development. Based on the spirit of the Congress and your interest, I would like to share with you my perspectives on China’s economic policy, reform and opening up, economic growth and China-New Zealand economic and trade relations. 

My views can be summed up in five points: the centrality of pursuing economic development in China has not, and will not change; reform and opening up as China’s national fundamental policy has not, and will not change; China’s commitment to working with New Zealand to promote mutually beneficial cooperation has not, and will not change; the bright prospects for China-New Zealand economic and trade relations have not, and will not change; and the fundamentals of China’s long-term sound economic growth have not, and will not change.

I shall take them up one by one in that order.

One, China will continue to focus on promoting high-quality development. The Congress Report reiterates that development remains the Party’s top priority. The fundamental and central task of China’s future development is to realize the Second Centenary Goal of building China into a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation through a Chinese path to modernization. Translated into plain English, the top priority for the Chinese Communist Party and Government is still to promote economic development so as to meet the aspirations of the Chinese people for a better life. 

This is determined by what we call the principal contradiction or the primary challenge facing Chinese society, namely, the gap between the unbalanced and inadequate development and the people’s ever-growing needs for a good life. As the largest developing country, China is still in the primary stage of socialism and is going through an extensive and profound social transformation. For that reason, China must continue to grow our economy as our central task. We must work hard to promote high-quality development by implementing the philosophy that development must be innovative, coordinated, green, open and shared, and fostering a new pattern of development that features a positive interplay between domestic and international economic circulations. There have been allegations that China has pivoted away from economic development as its central mission, which is, I can assure you, a misconception or misrepresentation of China’s policy priorities.

Two, China will continue to advance high-standard opening up. Over the past decade, China has pursued a more proactive strategy of opening up, which generated opportunities and dividends for not only China but also the rest of the world. Data from the World Bank showed that from 2013 to 2021, China’s contribution to global economic growth averaged 38.6 percent, higher than that of the Group of Seven (G7) combined. In that process, China has become the major trading partner of over 140 countries in the world. The China-New Zealand economic and trade cooperation has always been mutually beneficial in nature. China has accounted for 62.5 percent of New Zealand’s export growth over the past decade, with the past five years seeing it rise to over 70 percent. Figures tell, and NZ is but one of the many examples of how the rest of world, developing and developed countries alike, have reaped material and tangible benefits from China’s opening to the outside world.

The Congress Report clearly states that China remains committed to deepening reform and opening up, which is a sure path to high-quality development, and identifies several key policy priorities, such as steadily expanding institutional opening up, integrating ourselves deeper into the global industrial and supply chains, enhancing the diversity, stability and resilience of the country’s external economic and trade relations. This upgrade of China’s opening up post the 20th Congress, or opening up on a higher level, will surely provide more opportunities for the rest of the world to share in the dividends from China’s growth and development. It is predicted that China’s imported goods will exceed 10 trillion US dollars in value in the next five years. As far as NZ is concerned, China will import more Kiwi products, welcome more investors from New Zealand to do business in the country, and work more proactively to align with high-standard international economic and trade rules that New Zealand supports as a global and regional leader. You can rest assured that China’s door will only open wider, and that the Chinese market will generate increasing opportunities for the rest of the world.

Three, China will continue to cooperate with New Zealand bilaterally and at regional and global levels to achieve win-win results. The Congress Report states that China will adhere to the right course of economic globalization and upholds true multilateralism. It is committed to working with other countries to foster an international environment conducive to development, create new drivers for global growth, and build an open global economy. In this regard, China and New Zealand share important common interests. As a pioneer and consistent advocate for Asia-Pacific regional cooperation, New Zealand has been a major driving force behind APEC, and is a founding member of CPTPP and DEPA which are among the leading new additions to the regional architecture. China has applied for membership of both agreements, ready to make commitments that exceed its existing FTA practices, to pursue high-quality development of its own, and to provide CPTPP and DEPA members with more business opportunities with regards to goods and services trade, digital economy, green economy, just to name a few. I hope friends of NZIBF will speak out and support China’s accession to CPTPP and DEPA.

I notice that New Zealand has now joined the Indo Pacific Economic Framework for Prosperity (IPEF), and Stephen - you have done a lot of research - I would like to quote from you. You said, the term Indo-Pacific, meant to replace Asia-Pacific, causes “geographical confusion”. It “seems to be defined as much as by who is out, as who is in.” “Leaving some out can have unforeseen consequences.” “And IPEF comes at a cost.” The way I see it, New Zealand business communities are clear-eyed about its implications. The Herald’s Mood of the Boardroom 2022 CEOs Survey showed, only some 32 percent of respondents thought it was worthwhile pursuing IPEF. I would like to reiterate, the key to the success for the Asia-Pacific is win-win cooperation, inclusiveness and open regionalism, not exclusions, zero-sum divisions or even confrontation. Both China and New Zealand follow a development strategy that features openness, promote free trade, supports building an Asia-Pacific community with a shared future and an open and inclusive world economy. This approach has proven to serve the best interests of all of us, including China and NZ, that seek respective and common prosperity.

Four, China-New Zealand economic and trade relations have great potentials and a promising future. We are celebrating 50 years of our diplomatic relationship. China-New Zealand economic and trade relations have maintained a strong growth momentum over the past five decades. Our bilateral trade has increased from NZD7 million in the early days of diplomatic ties to NZD37.7 billion last year. Bilateral economic and trade cooperation has expanded from trade in goods to trade in services, investment, scientific and technological cooperation, digital economy, green economy and other fields. This year, the entry into force of RCEP and the China-New Zealand FTA Upgrade Protocol has further injected new impetus into our bilateral cooperation. New Zealand statistics show that in the first three quarters of this year, our bilateral trade rose by 13.3 percent year-on-year to NZD29.2 billion. China remains New Zealand’s top export destination. In short, as the two countries have a high degree of mutual complementarity and enjoy deeply integrated interests, our economic and trade relations have a rock-solid foundation.

I also note that there is some talk about diversifying New Zealand’s trade. Indeed, all countries, including China, would like to expand market around the world. Meanwhile, a country’s trade pattern is the result of a combination of factors, such as stewardship and support from the government, complementarity and divergence between industrial structures, and more importantly, choices made by businesses and consumers based on market principles. China-New Zealand economic and trade relations have evolved as the result of joint efforts of both sides, and are mutually beneficial in nature. China would like to work with New Zealand to consolidate gains already made while unlocking new potentials, so that we can better benefit our two peoples.

Looking ahead to the next 50 years of China-New Zealand economic and trade relations, I would like to emphasize again that the high-quality development and expanding institutional opening up of the Chinese economy will induce a growing need for green development, innovation and high-end consumption in China. New Zealand leads the world in sectors such as low-carbon agricultural technologies, green energy, innovation, software and creative industries, where the two countries could explore further collaboration. As a result of hard work on both sides, New Zealand enjoys a very positive national branding on the Chinese market. This invaluable intangible asset could generate more tangible benefits for both sides as New Zealand integrates deeper into China’s high-quality development process.

Ladies and gentlemen,

Finally, on the outlook for the Chinese economy. The global economy currently faces downward pressures from a resurgent Covid-19 pandemic, geopolitical tensions, growing inflation and ongoing disruption of supply chain. These external cyclical and structural factors have added to the headwinds for all of us, including the Chinese economy. In response, the Chinese Government has adopted a package of measures and follow-up policies for stabilizing and growing the economy. In the first three quarters of this year, China’s GDP reached 87 trillion yuan, up 3 percent year on year. China’s foreign trade reached 31 trillion yuan, up 9.9 percent. China’s incoming FDI exceeded 1 trillion yuan, up 15.6 percent. China maintained equilibrium in the balance of payments and the scale of the surplus accounted for 2.4 percent of its GDP, remaining well within a reasonable range. These figures show that for China’s economy, the fundamentals sustaining its long-term growth, and its potential and resilience remain unchanged.

An indication of the international community’s continued confidence in China’s economic growth is the latest projections released by leading international economic organizations like IMF and OECD that China remains one of the fastest growing economies globally. It is forecasted that China’s economy will grow around 3.3 percent in 2022, higher than the growth of Group of Twenty(G20) as a whole, which is 3.0 percent, much higher than the growth of US and Japan, which is 1.8 percent and 1.6 percent respectively. In 2023, while growth in major economies is projected to be subdued further, growth for China will bounce back to 4.6 percent. China remains a ballast and stabilizer for the global economy. As a matter of fact, China’s economic aggregate has reached over 110 trillion yuan and accounted for 18.5 percent of the world’s total. That is to say, even a growth rate relatively slower than before would still be tremendous growth in absolute terms. As New Zealand’s largest trading partner, Chinese economy will continue to play a positive role in New Zealand’s economic recovery and growth.

Ladies and gentlemen, 

A few days ago, President Xi and Prime Minister Ardern met face to face for the first time since COVID. The two leaders renewed their consensus on strengthening our comprehensive strategic partnership and offered strategic guidance for the development of bilateral relations going forward, imparting stronger momentum to our joint efforts to expand and deepen economic and trade cooperation from a higher starting point. 

On a new journey for China-New Zealand diplomatic relationship, China is ready to work with New Zealand to implement the important consensus reached by our leaders, so as to achieve innovative, substantive and sustainable development to the benefit of our two peoples. I believe, the China-New Zealand economic and trade relations in the new era will set a fine example of international relations featuring win-win cooperation. I hope NZIBF and all member companies can contribute more to bilateral economic and trade relations. I also recommend that you take some time to read the report of the 20th Congress. The report is rich in content. It is arguably the best guide to understanding contemporary China and a must-read for anyone who is interested in China or working with China. 

Thank you.

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