China's infant formula market upheaval is creating short-term challenges for Southland milk processor Mataura Valley Milk (MVM).
He says NZ and China have a strong relationship, but “from time to time, there will be things on which we disagree”.
“New Zealand has made its views known in a careful and diplomatic way,” he told Rural News. “That should not affect our trade relations.”
China/Australia relations have been deteriorating since Australian Prime Minister Scott Morrison called for an international inquiry into the origins of the Covid-19 pandemic in April, a move that Beijing called “political manipulation”.
Since then the two sides have fought over several issues, particularly trade. China has slapped Australian winemakers with heavy tariffs, and banned, delayed or taxed exports of other products, including beef and barley. Australian exporters are worried that tariffs could spread to dairy exports.
Jacobi believes there is always potential for things to get worse if care is not taken.
“We hope Australia and China can get back to talking directly to each other as soon as possible,” he told Rural News.
“It does no good for New Zealand to see close friends and partners at odds with each other. Both China and Australia have recently signed the Regional Comprehensive Economic Partnership (RCEP), as has New Zealand – we should all focus more on deepening our co-operation in this way.”
China remains New Zealand’s biggest export market.
In 2020, New Zealand’s exports to China exceeded $16.7 billion, which was more than double that of our next biggest export market, Australia. The top three exports were dairy products (milk powder, butter, and cheese), wood (logs, wood, and wood articles), meat (meat and edible offal).
Last week, Fonterra chief executive Miles Hurrell said the dairy co-operative has a strong reliance on China and is watching geopolitical tensions closely.
“But we don’t get our nose involved in such disputes,” he says.
Jacobi doesn’t expect China to target NZ companies or products.
“There would be no reason for China to do this,” he says.
He also points out that NZ products enjoy a great reputation in China.
“We maintain positive political relations despite occasional disagreements. There is no reason for this to change.”
Earlier this month, the NZ Government raised concerns about China’s use on social media of a doctored image of an Australian soldier holding a knife to a child’s throat.
Last month, NZ signed a Five Eyes statement critical of a Chinese Government resolution, which led to the disqualification of four pro-democracy lawmakers in Hong Kong.