How the big NZ parties will tackle the Asian century

A fast-growing Asian population, controversial land sales to Chinese buyers and what is seen as an over reliance on China for dairy exports have been some of the hottest topics during New Zealand’s general election campaign.

"By continuing to boost our strong economic, cultural, and social ties … New Zealand can continue to build a brighter future in this Asian century."
John Key, New Zealand Prime Minister

With growing trade and cultural links, New Zealand’s relationship with Asia is seldom out of the news. As voters get ready to go to the polls in what promises to be a cliffhanger election, politicians have been scrambling to tap the mood of the nation on what is a fundamental cultural shift.

But behind the often heated rhetoric is an acceptance that how New Zealand responds to these issues will shape the country’s economic fortunes over the coming decades.

As part of BlueNotes Debates, we asked all political parties in parliament for their prescription for a more Asia-engaged New Zealand.  Four parties responded.  Here are their unedited comments.

National Party

'Our prescription for a more Asia-engaged New Zealand'

By Rt Hon John Key, Prime Minister

We all know from our own experiences with technology, communication, and travel that the world is more connected than ever.

New Zealand’s strong and growing relationship with Asia is a great example of this.

New Zealand was the first developed country to enter free trade agreement negotiations with China and, since signing our FTA, trade between our two countries has skyrocketed.

New Zealand now exports more than 10 times the value of product to China every day than we did in the whole of 1972.  Dairy exports alone have grown from $0.2 billion revenue in 2001 to $6.1 billion for the year ended March 2014.

In the five years prior to signing of the China FTA, our merchandise exports to China grew on average six per cent per annum, in the five years since, this has increased to an average of 32 per cent. 

In 2010, we agreed on the ambitious target of doubling two-way trade to $20 billion by 2015.

With two-way trade already at $18 billion, Chinese President Xi Jinping and I recently agreed to a new target of $30 billion by 2020 – triple what it was in 2010.

That is ambitious, but I think we can do it. 

We are working hard to make doing business with China easier.

In March we announced six new initiatives to help strengthen cooperation between our two countries – including the launch of direct trading of the New Zealand dollar against the Chinese Renminbi. 

New Zealand has free trade agreements in place with other Asian countries, including Hong Kong, Singapore, Thailand, and the ASEAN nations, and negotiations with South Korea, as well as Japan, Vietnam and others through the TPP.

The benefits of these agreements is immense. Exports to our FTA partners have increased by 43 per cent over the past five years, while exports to the rest of the world – countries we don’t have agreements with – have fallen by six per cent.

As the wealth of Asia increases, so too does the demand for the types of goods New Zealand is great at producing. This means more money for our exporters and more jobs for New Zealanders.

But our relationship with Asia does not end at the border.

New Zealand is increasingly becoming a more diverse and vibrant nation and Asian communities make an outstanding contribution to our country.

Our Asian population has nearly doubled in size since 2001, with the Asian region now being the most common place of birth for those born overseas. Asian New Zealanders are now our third-largest ethnic group.

This increased diversity brings a wider range of perspectives and international connections for us to draw on as we open up new markets and grow our industries.

The vibrancy and energy of New Zealand’s Asian communities is a fantastic part of Kiwi culture.

I really enjoy engaging with Asian communities across New Zealand and am struck by how vibrant and energetic people in these communities are.

By continuing to boost our strong economic, cultural, and social ties with our Asian neighbours, and with our Asian communities, New Zealand can continue to build a brighter future in this Asian century.

Labour Party 

'Our prescription for a more Asia-engaged New Zealand'

By Hon David Cunliffe, Labour Party Leader

As part of the Asia-Pacific region, New Zealand is situated in the most dynamic and fastest-growing area in the world. 

That’s why the former Labour government focussed its efforts on negotiating a comprehensive free trade agreement with China and South East Asia. In both cases, we reached a high quality agreement.

China has now moved to being our biggest export market for goods. In fact, exports to China have since more than quadrupled from $2 billion to $11 billion a year.

China is also our biggest source of international students and our second biggest source of tourists. However, there is much more we can do to improve our links with the region.

Trade agreements can lead to greater economic and cultural ties throughout the Asia region.

New Zealand is still waiting for the Government to provide enough information about the Trans Pacific Partnership to enable a proper and thoughtful debate.

However, such an agreement would make Japan and Malaysia significant new Asian trading partners. It would also open new routes into Singapore and Vietnam, which we already have established trade ties with. 

The Regional Comprehensive economic partnership agreement would bring India and other large Asian partners. Free trade agreements simply open the doors. We then have to ensure we take advantage of that access. Trade and Enterprise must be more active in working with the business community to secure these gains.

The recent botulism scares and DCD contamination showed that New Zealand was ill-prepared to deal with such problems. Complacency about our branding, cut backs in Foreign Affairs and the Ministry of Primary Industries, and inadequacies in communication were all weaknesses that were too late in being addressed. 

New Zealand must also work to broaden its export products and markets. We cannot afford to be left dependant on a narrow range of products in a single market as we were when Britain entered the European Economic Community in 1974.

That means more focus on value-added products and finding specialist niches in areas other than commodities such as ICT and elaborate manufacturing.

We need also to be more connected with our markets by better understanding the language and the cultures of our new trading partners. New Zealand must develop as a multilingual country.

We need to fully use the language, cultural and entrepreneurial skills that new migrants to New Zealand bring with them. They are invaluable in opening up new markets in Asia and beyond.

Green Party

'Our prescription for a more Asia-engaged New Zealand'

By Dr Russel Norman, Green Party Co-Leader

New Zealand’s current strategy for Asia is not just focused on one market, it is close to being based on one product.

We need to spend more effort getting to know our customers in Asia rather than just producing simple commodities like milk powder and raw logs.

The current strategy, if there is one, is to bet the farm on the farm. That makes us vulnerable.

Any investor knows you must diversify.

To do that, we need to get to know what people want. This is as true for the agrifood industry as for elaborately transformed manufactured exports. 

That means spending more engaging directly with Asia.

What you want is a much more complex set of products and services and to export them into a much more diverse set of markets. 

It’s all about value add and making sure we get development in sectors other than agrifood. We will work with the agri-food sector, but also look after the rest of the economy, making sure it does not get hammered by a constant focus on dairy.

If we want to be an affluent country, we need to export, not simply more commodities and not just what is easiest, but high value-added, manufactured goods and services that affluent countries desire.

To do that you need a smarter economy focused on innovation.

New Zealanders are renowned for our ability to solve problems – the can-do, No. 8 wire mentality - yet we starve innovators of the resources needed, spending half of the OECD average on R&D.

The Green Party has already announced that we will set up the Green Investment Bank to work alongside the private sector to spur us a greener, higher tech, more added-value economy.

We also further innovation policy as the campaign progresses.

We also need to make some adjustments to our foreign policy. Our relationship with Asia has been curtailed by our close security relationship with the United States.

Our membership of Five Eyes, and our close working relationship with the US, restricts our ability to work with China and others.

The tension between our defence arrangements with the US and our economic relationships with Asia will increasingly impinge on our economic interests and arrangements that now mainly lie with Asia.

So a more independent foreign policy would actually assist our engagement with Asia.

It is also important to understand why we have done well in China. It isn’t the Free Trade Agreement (FTA), it’s because China wants our products.

While there is a huge emphasis on trade agreements, protecting our environment is more important. There is a misunderstanding about why China buys our stuff – it’s not the FTA, it’s because they see our food as clean, green and safe.

Any trade agreement that undermines our ability to regulate and protect our environment will ultimately undermine our export potential.

Environmental protection is critical to our access to the Asian market. That needs to be a higher priority.

Maori Party

'Our prescription for a more Asia-engaged New Zealand'

By Te Ururoa Flavell, Maori Party Co-Leader, Waiariki MP

Māori connections to China stretch back through time. 2000 years ago the Chronicles of Hou Han Shu wrote that the skies above Beijing glowed red as blood. Incredibly, the scribes of Han had recorded New Zealand’s great Taupō eruption – one of the most powerful the world has seen.

The skies above Beijing have also glowed red, with a fireworks display the likes of which the world had never seen: on 8pm on the 8th of August 2008. The Opening Ceremony of the 29th Olympic Games was an epic spectacle celebrating a heritage both ancient and modern. A people striving for excellence, innovation and honour.

That ceremony reminded the world of the Chinese people’s phenomenal and ongoing contribution to global culture, economy and civilisation. And I am incredibly proud to say it is a civilisation, a heritage and a people that Māori are intrinsically linked to. Thousands of years ago our Polynesian ancestors set off from Asia.

As they left, they looked to the stars, using astronavigation to guide entire communities across millions of square miles of ocean. Using advanced science, they crafted the world’s first long-range, open-seafaring vessels.

From Papua in the west, Hawaii in the north, Rapanui in the east and Aotearoa in the south: over 80 generations they discovered and settled a third of the surface of our planet. I proudly acknowledge our shared heritage and pay tribute to all of our ancestors and acknowledge their courage, audacity and genius. 

As well as ancient ties to China, Māori recognise more recent ties. We recognise that China isn’t merely a foreign export market thousands of miles away – Chinese people have lived alongside us for nearly 200 years. Nearly a century ago the SS Ventnor ship sunk and the remains of 500-men – en route go Guangdong for burial – were also lost.

This tragedy devastated their families who contemplated an eternity where their loved ones souls could never be at rest. But a few years ago those men’s descendants discovered their forebears hadn’t been lost at sea, but had been laid to rest in sacred, tribal burial grounds.

As we prepare for the future – we can find inspiration in our not too distant past. We can look to our ancestors from across the Asia Pacific region, the ultimate explorers, leaders, innovators of their time.