Navigating headwinds and Creating New Highlights ----Observations on China-New Zealand Economic and Trade Cooperation 2022

Dear Friend, Tenā koe.

The global economy has been facing risks and challenges throughout 2022 amid the lingering pandemic and mounting geopolitical tensions. Yet despite that, we China and New Zealand have not paused for a moment in advancing our economic and trade cooperation for mutual benefits. My conclusion is that on the whole, we have navigated the headwinds and created many new highlights in 2022. Here are some of my observations.

Bilateral trade in goods hit historic high, exceeding NZD 40 billion for the first time. We see trade in goodsbetween our two countries reached a record 40.21 billion. in 2022, up 9.3 percent on a yearly basis, a 37.6 percent increase compared with that before COVID in 2019. Against the backdrop of global uncertainties and turbulence, such growth is very impressive. It is worth applauding by us and could serve as a new starting point for the more ambitious goal of 50-billion two-way trade.

Electric vehicle (EV) stood out as a new growth engine for bilateral trade, fully demonstrating our commitments to green development. In 2022, New Zealand’s imports of EVs from China reached 380 million USD, up 167.1 percent. Notably, China’s BYD Atto 3 has just been named as New Zealand Car of the Year. This stands as a strong affirmation for China’s electric cars. As New Zealand is an important force leading green development worldwide, it is my firm belief, trading with China in green products such as EVs will surely contribute to the country’s drive towards a sustainable economy. New Zealand’s exports to China saw growth attributed to our bilateral FTA. I would like to recall that, John McKinnon, chair of the New Zealand-China Council, recently commented China would become even more important for New Zealand when the newly upgraded free trade agreement allows all New Zealand goods enter into the country tariff-free. Here is one example. New Zealand’s butter exports to China expanded 47.8 percent year on year to 780 million USD in 2022, marking a 88.9 percent increase from 2019. Such growth is indispensable to the phasing-out of special safeguard measures under our bilateral FTA. It is fair to say, since its entry into force, our FTA has successfully unleashed New Zealand’s export potential to China.

Bilateral trade in services embraced a gradual revival from the impact of the pandemic. I note that even with pandemic border restrictions in place in 2022, visitor arrivals from China still increased, from 259 in March quarter to 9924 in December quarter. Chinese students are also coming back to New Zealand campuses. Now the country is hosting more than 10,000 students from China. This year, more good news is coming. New Zealand is among the first 20 outbound travel destinations under China’s pilot program starting from February. On 3 March, the first Chinese tour group since COVID arrived at Auckland. The long-awaited resumption of people-to-people exchanges will certainly boost New Zealand service economy recovery.

The two countries injected new positive energy into the Asia-Pacific economic integration through close coordination. Both China and New Zealand are leading advocates in regional economic integration. Over the years, our coordination and collaboration have contributed tremendous positive energy to a prosperous Asia-Pacific. With our joint efforts, RCEP, the world’s largest FTA, came into force last year, thus opening a new chapter of the regional economic cooperation. New Zealand is also a founding member of CPTPP and DEPA, two leading additions to the regional architecture with wide global implications, and has taken the chair of CPTPP in 2023. As an applicant for both agreements, China is now in close and constructive communication with New Zealand. Through more frequent and fruitful discussions, I expect to see positive progress in the coming months.

While I see many highlights of our economic cooperation, I also note that topics on the prospect of China ’ s economy and our bilateral economic relations have stirred heated discussions in New Zealand. Here, I can assure my New Zealand friends, the Chinese economy enjoys strong resilience. The Chinese market remains open and is creating more business opportunities. All countries including New Zealand are welcomed to share the dividends of China’s high-quality development and institutional opening-up. In that regard, a closer look at China’s policy adjustments and economic performance early this year will be very helpful.

As China optimizes its COVID measures in light of the evolving situation, the flow of people and economic activities have made a strong comeback. In January, China’s PMI sub-index for new orders rebounded to a record high over the past 18 months. The country’ s offline consumption also witnessed a robust recovery and vitality. Notable to say, China convened the Two Sessions meetings a few days ago, and set its annual GDP growth target at around 5 percent for 2023. In terms of trade agenda, key priorities are steadily increasing the volume and quality of foreign trade and attracting more foreign investment. To this end, China will further expand market access and step up its institutional opening-up through joining high-standard agreements such as CPTPP and DEPA.

You can rest assure, as China’s policy adjustments take effect and the Chinese economy recovers, great opportunities will be created for the rest of the world including New Zealand like always. I strongly encourage my New Zealand friends to visit China this year. You are mostly welcomed to either reconnect with old contacts or explore new businesses. Through concerted efforts, our economic and trade cooperation is bound to advance to a new level in 2023.

Ngā mihi.

Sincerely yours, Wang Xiaolong Chinese Ambassador to New Zealand