Deer Industry NZ 2012 Conference Kefeng Chu Director China Operations New Zealand Trade and Enterprise
New Zealand s exports to China have been growing strongly while the trade deficit has been shrinking NZ $BN Trade with China 2006-2011
It is not just about milk powder and logs $3.5 billion out of $5.9 billion of New Zealand s exports to China are in these two product categories. The rest $2.5 billion is not dairy and wood products. How big is $2.5 billion? As recently as 2008 total NZ exports including dairy and logs were just over $2 billion. So we can say the our broader economic relationship with China is not just benefiting our dairy and forestry sectors. - Hon Tim Groser, Minister of Trade 15 March 2012
NZTE as a lead agency for Goals 2 and 4
Sectors we focus on for the China market Non-commodity Commodity Value (NZ$ Bn) 12 11 10 9 8 7 6 Agritech ICT Spec. Man. 5 4 3 Food & Beverage 2 1 2008 2011 2015 Illustrative
for example, putting NZ on the menu
..for example, kiwifruit is now in reach of the new Chinese middle class Exports of kiwifruit to China 2003-2011 NZD million
It is also about improving investment flows State Owned Enterprises Sovereign Wealth Funds 80% Private companies VC and PE funds Migrant investors HNWI 20% China invested approximately US$60 billion internationally in 2010-11 In 2015, China s overseas direct investment will reach US$500 billion (from US$4b in 1990 to US$249b in end of 2009) Into NZ companies Infrastructure NZ funds
We are sharpening our focus strategy is about choice Export goods earnings, year to June 2011* $36 billion 260 Companies earning >$25m 2000 NZTE CUSTOMERS $5 billion $3 billion 12,000 Companies < $5m 460 Companies $5-$25m Focus 500 Number of New Zealand exporters *Figures are rounded to the nearest billion and are for exports of goods only. **NZTE customer numbers include service companies
NZTE: key facts 2000 customers ( Focus 500 ) Crown entity, private Board 550 people (50% offshore) 36 international offices $150 million investment Our purpose Grow New Zealand companies internationally Build capability in NZ Partner in market
Opportunities and Challenges Food and beverage Clean & green technology NZ pure/safe foods/maori culture brand NZ s small size outside dairy develop key relationships, high value added products, IP, consortium approach, joint venture
Collaborative Approach Towards the China Market Example 1 NZ Pine Exporters Background Started in 2001 to enhance the industry s scale to respond to bigger market and promotional opportunities in China Includes saw millers, processors and traders from pine industry with common focus on timber NZTE initial support previous Exporters Network and Enterprise Network Sharing information, including market intelligence, knowing competitors from other countries, promotion(sharing expenses) Operates as a formal network, meets about 3 times a year, monthly telecon Benefits 1. Trust among the group 2. Achieve scale 3. Share information and market development activities 4. Reduce cost for marketing/promotion 5. Share business relationship 6. Mutual support in the market For more info - www.nzpec.co.nz
Collaborative Approach Towards the China Market Example 2 greenshell mussel Before collaboration: NZ suppliers competed against each other Driving selling price down Almost killing the market in China Collaboration: Initiated by Minister Groser Concept investigation/research (NZTE) NZTE seconded a staff to set up a WOFE PNZGM later became its GM Price moved up Benefits: Less up-front cost to establish the WOFE Clearer marketing messages and one brand Sharing network and expanding presence Less-ongoing costs Possible expansion to further products
Booklet providing practical advice for NZ businesses looking to set-up or expand in China Case studies from NZ business people with handson experience of doing business in China Navigating China Call NZTE 0800 555 888 for copies Into NZ companies Infrastructure NZ funds