Chinese tourists are now our second biggest tourism market with 400,000 visiting in 2016 and spending $1.6b and are expected to eclipse Australians as number one in 2024 by spending $3b.
In 2018 our two-way trade with China was $27b and exceeded $30b this year just gone.
Since the free-trade agreement was signed in 2008 goods exports to China have quadrupled, all going some way to explaining this golden run that many of us exporters have experienced.
However, those of us selling wool where China is a major buyer know the perils of being exposed to this large market.
The dairy sector learned this lesson in its last downturn. It remains a command economy with the ability to turn demand on and off quickly.
But despite that, China is a crucial country for our own prosperity and future.
So why has this Government seemingly mismanaged this relationship over the last 18 months?
I think one reason for this apparent cooling is that global politics beyond our shores come into play.
The United States-China trade war as these two countries jostle for economic supremacy has seen smaller nations caught in the crossfire.
Both these countries are important to us and we need to tread a fine line.
And then there is the Government Communications and Security Bureau’s decision to block Huawei’s involvement in the 5G network because of security concerns. Given that other western countries have evidence their security has been breached by foreign governments we would be naive to think we are not a target. But the decision has naturally got up the Chinese noses.
However, last week Prime Minister Jacinda Ardern did finally make the trip to China to meet both premier and president, two of the most powerful people on the planet and certainly able to hold great sway over our future.
Last week I listened to an interesting interview with American John Pomfret, who, as a journalist, lived in China for many years. He is a Mandarin speaker with great insights into that country that most of us still know little about.
He gave the outsider’s view of our Ardern and her performance, particularly over recent weeks.
He said she was a global rock star given her and the whole nation’s extraordinary reaction to the tragedy in Christchurch.
He went on to say the pixie dust she has is exactly why the Chinese leaders were so keen to host her and be photographed beside her on her visit.
“The soft power your country has now you don’t even understand,” he said.
Former Prime Minister John Key benefitted from his Hawaii and golf connections with Obama, which no doubt helped our relationship with the US, again the gift of soft power.
Pomfret also discussed President Xi Jinping’s move last year to remove the term restriction on the presidential role, thus setting himself up as president for life or as other commentators have noted, as a new Chinese emperor.
For the last 30 or so years the president has always ensured there was a sound successor installed into the politburo by their second five-year term to make sure there was a smooth and orderly transition of power.
Xi is 65 now and without the use of this safeguard he has put his country at the risk of great future instability because, like all of us, he will get old and frail. Then there will be factional power struggles and an unstable China will present the world and particularly small countries like ourselves with difficulties, especially NZ if we continue to become more dependent on that economy for our own prosperity.
We do need to keep looking for a diverse range of markets for our exports to guard against overexposure to one economy.
