Amid uncertainty in the international environment, New Zealand's relationship with China appears particularly stable and important.
In an interview with YIJU, New Zealand Ambassador to China Dr Jonathan Austin, whose Chinese name is Qiao Wenbo, spoke candidly about a common tendency in international discussions about China: people keep talking about “finding alternatives” without fully recognising China's weight in the global economy.
This is no exaggeration. Austin noted that China's economy accounts for close to a fifth of global GDP. Its population, economic size, industrial capacity, market depth and position in global trade networks all place it in a distinctive position. For those reasons, New Zealand's relationship with China should not be casually oversimplified, let alone underestimated.
A substantial and stable trading relationship
Economic ties between New Zealand and China have grown significantly over the past twenty years. Today, the scale of that relationship is remarkable. In the interview, New Zealand Ambassador to China Jonathan Austin said bilateral trade currently amounts to about NZ$112,000,000 a day, a figure that helps illustrate its magnitude. “If you compare that with New Zealand's trade with other countries, the difference is very clear. Some countries' total annual trade with New Zealand is equivalent to just two days of our trade with China.”
China has become one of New Zealand's most important trading partners. In goods trade, about a quarter of New Zealand's goods exports go to China, which accounts for approximately 26% of New Zealand's total trade. Demand in China is particularly strong for New Zealand's food and fibre products, including dairy, meat and forestry products.
However, the ambassador emphasised that trade between China and New Zealand is not just an “export story”; it is also an “import story”. Although New Zealand has long maintained a trade surplus with China, and is among the few OECD countries to do so, that surplus is gradually narrowing as China becomes an increasingly important source of imports.
He believes this change is not necessarily negative. High-quality Chinese-made products entering New Zealand can bring greater competition and help improve productivity. In construction, for example, access to more reasonably priced, reliable imported products could reduce industry costs and lift overall productivity.
Overall, Jonathan Austin believes the economic and trading relationship between China and New Zealand continues to grow strongly. Last year, New Zealand's exports to China recorded double-digit growth. He sees three important reasons behind that growth.
First, New Zealand and China have a high-quality free trade agreement: the New Zealand–China Free Trade Agreement adopted in 2008. This provides a lasting institutional foundation for trade between the two countries.
Second, the two countries have established longstanding, stable business relationships. Businesses know and understand each other, know what each can offer and know how to work together.
Third, the trading relationship itself is highly complementary.
New Zealand exports food, fibre and high-quality primary products to China, while its imports from China are largely manufactured goods. New Zealand does not seek to compete directly with China in large-scale manufacturing. Austin put it plainly: New Zealand does not make cars and will not compete for a share of the car manufacturing market. Its strengths lie in producing the world's best dairy products or becoming a global leader in certain advanced, specialised manufacturing fields. Unlike some countries, New Zealand does not face substantial pressure to protect domestic industries in its trade with China. For many countries, China represents overcapacity, trade imbalances and pressure on domestic industries; for New Zealand, the situation is not quite the same. Decades ago, New Zealand made some difficult but realistic choices, recognising that it was not well placed to compete in certain manufacturing sectors.
Austin recalled growing up in the Hutt Valley in the nineteen-seventies and eighties, when it still had four vehicle assembly plants. They have long since disappeared, because New Zealand recognised early that this was not an area in which it was truly competitive.
These factors have helped keep the trading relationship between China and New Zealand stable amid uncertainty in the current international trading environment.
Twenty years of change: from a peripheral market to a core partner
Looking back over the past twenty years, Jonathan Austin sees the enormous increase in scale as the most striking change in the relationship between China and New Zealand.
Around 2008, when the two countries signed their free trade agreement, only about 3% to 4% of New Zealand's exports went to China. Today, that share has risen to about a quarter.
He noted that trading with multiple markets is always a sensible strategy for businesses, but the scale and demand of China's market give it particular importance. China accounts for about a sixth of the world's population and close to a fifth of the global economy, while absorbing about a quarter of New Zealand's exports. A market like that cannot simply be replaced.
He said Chinese consumers continue to place a high value on New Zealand products: their quality, trustworthiness, robust food safety systems and the country's “clean, green, safe and friendly” image all give them distinctive advantages in China. At the same time, New Zealand consumers are increasingly seeing value in Chinese imports, which offer competitive prices alongside continually improving quality and increasingly advanced technology.
This change means the economic and trading relationship between China and New Zealand is gradually developing into a mature, complementary partnership: New Zealand continues to draw on its strengths in food, agriculture and natural resources, while China supplies a wide range of competitive manufactured and technology products.
Austin cited electric vehicles as an example. Over roughly the past year, increasing numbers of Chinese-brand electric vehicles have entered New Zealand, offering a clear price advantage and convincing product quality. He believes similar changes are occurring in sectors such as building products.
Challenges and cooperation: from trade to broader connections
The relationship between China and New Zealand does, of course, face challenges. The ambassador noted that China's economy is under some pressure, and that demographic changes and population decline could affect future economic growth. But he also emphasised that these issues have not so far noticeably weakened the overall resilience of New Zealand's exports to China. Those exports are still growing, which itself demonstrates continuing, stable demand in China for New Zealand's quality food and high-standard products.
From the perspective of New Zealand consumers, however, fierce competition among Chinese businesses often brings benefits: prices fall while quality continues to improve. For an importing market such as New Zealand, this means more choice, better value and greater benefits from technological advances. Electric vehicles are a clear example. In recent years, many Chinese-brand electric vehicles have entered New Zealand, offering good quality and technology at relatively reasonable prices. Similar developments are occurring in areas such as building materials.
Beyond trade, tourism, education and investment are also important parts of the relationship between China and New Zealand.
In tourism, although visitor numbers from China are still gradually recovering, tourism revenue has largely returned to pre-pandemic levels. New Zealand is more interested in attracting visitors who want deeper experiences and spend more, rather than large, low-cost tour groups. There are currently about 60 direct flights a week between mainland China and New Zealand, with more connections available via Hong Kong. Strong air links provide a foundation for tourism and business travel.
Education also sustains longstanding connections. New Zealand has long been regarded as a safe and friendly destination for international students, with all its universities ranked in the world's top 2%. More importantly, education brings not just tuition revenue, but lasting connections through skills and personal networks. Many Chinese New Zealanders initially arrived as international students, then stayed to live and establish businesses, building enduring commercial and social links between the two countries. These lasting personal ties often reach further than trade alone.
In investment, the New Zealand Government is also working to attract more foreign capital, including from China. For a country that has long been short of capital, foreign investment is an important driver of economic growth. New Zealand is seeking to send a clearer message: we welcome investment, want processes to be more efficient and transparent, and want to make this market easier for investors to understand and enter. New Zealand's strengths are clear rules, transparent laws and predictable institutions. Those rules apply equally to all investors, regardless of their country of origin. That stability is itself a competitive advantage.
Beyond a “transactional relationship”
At the end of the interview, Austin addressed an important question: how can the relationship between New Zealand and China move beyond a “transactional relationship” to a higher level?
His answer was that the relationship has long been about more than simply buying and selling goods.
China is, of course, a vast and complex country, and New Zealand and China do not agree on every issue. The two countries have differences and take different positions on some international matters. But in Austin's view, the key is that those differences should not define the entire relationship.
Beyond trade and economics, China and New Zealand share tourism, education, cultural and personal connections, as well as New Zealand's large and important Chinese community. Today, about 5% of New Zealand's population is of Chinese descent. These connections add depth and richness to the relationship, distinguishing it from many bilateral relationships sustained by a single issue.
Austin said the Government would of course continue supporting organisations such as the Asia New Zealand Foundation to strengthen these connections across cultures and societies, and that there would always be more scope to promote exchange, cooperation and understanding. Ultimately, this relationship has shown resilience in a complex international environment precisely because it is about more than “I buy your goods, and you buy mine”.
At a time when the rules-based international system is under pressure and the global economic and trading order is increasingly unsettled, the economic and trading relationship between New Zealand and China continues to show strong resilience. Austin's assessment is clear: at least economically and commercially, the relationship remains in very sound shape and is as vital to New Zealand as ever.