Strong wool eyes China
China looks set to play a key role in helping the New Zealand wool sector shift away from trading as a commodity supplier.
Last week, the US overtook China as New Zealand’s largest red meat market for April. It was a significant development because China has consistently been New Zealand’s largest meat market since July 2018, except for February 2020 when there was a significant drop at the start of the Covid pandemic.
It’s not only in red meat that China is our biggest market. China is the number one market for our dairy, accounting for nearly one-third of our dairy exports. When it comes to NZ log exports, China accounts for 89% of our total exports.
Speaking at the recent China Business Summit in Auckland, both Prime Minister Chris Luxon and Trade Minister Todd McClay spoke about the ‘China and….’ approach.
China remains a critical element in the Government’s strategy to double export value. With tariff free access for all New Zealand goods into China, and a burgeoning services trade, the economic relationship between the two countries continues to flourish. After all, we were the first country to sign a free trade agreement with China.
But as McClay points out, while NZ remains fundamentally committed to developing trade and economic relations with China, it is also vital that the country works to spread exposure across many markets, pursuing diversification and working hard to open as many doors as possible worldwide.
China’s economic slowdown has caused pain for some NZ exporters. Since Covid, China’s economy has failed to fire on all cylinders, although its economy grew a respectable 5.2% last year.
This underlines the importance of having a diversified export strategy. Such an approach is paying dividends for the red meat sector.
The Government knows that while China will remain a significant market, it must also be committed to a dynamic and energetic approach to the rest of the world and it’s rightly looking to the Middle East and India as potential trading partners.
