China trade: Over-exposed or cashing in?

Wednesday 4 May 2022

 
(BusinessDesk) New Zealand has never been more exposed to China as a market for our goods, but we may have more of a buffer against the impacts of a trade disruption than many appreciate. That's according to a report from the New Zealand China Council released last week.

The log export trade is rated in the report as one of the most-exposed of our New Zealand commodity exports (see graphic).

In the event of trade disruption with China, those goods on which China relies on NZ for supply would likely still flow, while other goods which are more easily replaced by China or less essential could be redirected to other export markets, the council said.

Therefore, opening up new export markets through trade negotiation was the most prudent way of "supporting optionality for exporters".

Additionally, China offers NZ a large and growing market for primary goods that is not easily replaced, the report said. NZ China Council chair John McKinnon said China would continue to be a key market for NZ exporters, despite the possibility of a covid lockdown creating an economic downturn.

"The Chinese economy is going to have its ups and downs, but it is going to be a significant economy in the world and there are going to be people there who are going to want to buy the things that we produce," he said.

Big but not unprecedented - China accounted for 33% of all NZ's goods exports in 2021, up from 25% in 2018 and 13% in 2011. The increased concentration is a result of a 20% growth in goods exports to China combined with declines in other markets such as the UK and Australia.

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Source: BusinessDesk
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