Our Future with Asia

Executive Summary

New Zealand has vital political, security, trade and economic interests in Asia. What happens in the region affects us: when the region does well, New Zealand benefits; when it falters, New Zealand too suffers.

Dynamic growth in the Asian region is expected to continue over the medium term, fuelled by growth in China and India. No other region will provide as many opportunities for New Zealand over the next decade or two. In the future we will find ourselves dealing with a region which will carry greater global weight. The competition for Asia’s attention is intensifying.

If New Zealand is to keep pace with developments in Asia, we will have to lift our game. In our favour is much goodwill in the region towards New Zealand. Our ties with Asia are longstanding and active across many sectors, both governmental and non-governmental. But the onus is on New Zealand to accelerate the tempo of these relationships. Asia’s sheer size and diversity means that there can be no single approach to dealing with it. The region contains the world’s two most populous nations, a rich collection of cultures, religions and societies, and varied political and government structures.

Our relations with Asian countries vary widely, with some new and some longstanding links. We must take care not to neglect old friends in an effort to take up newer opportunities. There are two key elements that underpin New Zealand’s Asia strategy:

• New Zealand must invest more time and effort into strengthening its ties with Asia. No matter what the area of interest – business, politics, education, culture – building strong relationships is vital;
• New Zealand needs to look at ways in which it can build a greater shared future in the region, making a bigger contribution to Asia as well as focusing on what we can gain for New Zealand. Naturally we would like to increase our trade and investment links – but it has to be more than just that.

There are four specific challenges that New Zealand must tackle if we are to succeed in Asia and, by implication, globally.

1. Better integrating ourselves into an integrating region

The countries and economies of Asia are becoming progressively more integrated. They are strengthening regional collaboration and taking steps towards new mechanisms for political co-operation. Any new regional architecture in Asia will have important implications for New Zealand. We need to continue engaging actively to ensure our participation in decisions that are vital to our future. We seek to be part of emerging regional structures. New Zealand faces risks from the development of bilateral and other regional trade agreements in which it is not included.

We need active and regular engagement with Asian countries in areas of common interest. We have to develop a sense that our interests and the interests of the region are intertwined. And we need to highlight what we can offer the region so that Asian countries can see benefi t in engaging with us.

This will require effort from the Government, business, the education and science communities, local government, the cultural sector, NGOs and many others.

2. Being a good neighbour

To build a constructive future with Asia, we must act as a good international citizen and a good neighbour.

Being a good neighbour means working with Asian countries and regional groupings to develop stronger shared interests to:

• maintain regional security and stability;
• address trans-national issues of concern to the region;
• build up scientific knowledge and expertise in environmental protection;
• support development in poorer nations – after the Pacific, Asia is our top priority for official development assistance;
• protect and promote human rights.

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3. Boosting New Zealand’s growth by linking to the growth of the Asian economies

New Zealand businesses are not participating as fully as they might in the growth of Asia’s economies. Despite rapid economic growth in the region, New Zealand’s goods exports have not shown growth in New Zealand dollar terms since 2001.

Undoubtedly, however, the high rate of our dollar in recent times has been a factor in that. Tourism and education face intense competition from other countries. Investment flows are much smaller than they could be given the prominence of Asia in our trade profile, even though we are one of the easiest countries in the world in which to set up and run a company.

A 2007 survey of Asian businesses reported that New Zealand business people were well regarded and seen as trustworthy by Asian counterparts, but their Asia-related skills in language and culture were perceived to be low.

Our tourism sector emphasises New Zealand’s image in the Asian region as “clean and green” but we also have to communicate the message that we can – and do – offer a lot more, particularly when it comes to trade, investment and education.

To link ourselves more closely to the growth and dynamism of the Asian region, and so boost our productivity and global competitiveness, the Government needs to:

• raise awareness in Asia of the benefits of investing and doing business in New Zealand, and more effectively “brand” New Zealand as an innovative economy;
• invest more in building a reputation for quality, value and having a welcoming environment in tourism and education, our two most successful service exports;
• improve support for business connections between Asian countries and New Zealand;
• enhance access to markets through trade agreements;
• build the skills and capacity of New Zealand businesses to engage in Asia;
• build collaboration between Asian and New Zealand business institutions such as chambers of commerce and industry associations.

4. Becoming more “Asia literate”

At home, New Zealanders are coming into increasing contact with Asia and its people, through short-term visitors (students, tourists and business people) and through immigration from the region. Nine per cent of New Zealanders identify themselves as Asian; the figure is 19 per cent for Auckland.

New Zealanders need to become more “Asia literate” so we can better engage with the region in which we are increasingly making our living. We need more New Zealanders who are confident in their dealings with Asia and Asian societies, and that will only come through greater familiarity and knowledge of the region and its peoples.

If New Zealand is to become more Asia literate:

• developing Asian language and cultural skills must become a priority;
• more in-depth reporting from Asia is needed in our mainstream media. This would lift our understanding of the region. We need news that is New Zealand-relevant and able to offer a New Zealand perspective on what is happening;
• we need to tap more effectively into the skills and networks of our Asian migrants. Asian communities, both new and old, bring Asia-relevant skills and connections to the region. They also contribute to New Zealand’s reputation for being open and multicultural. Our migrant settlement strategy is focusing on helping migrants into jobs and providing opportunities for new Asian New Zealanders to become “New Zealand literate”;
• universities and other education providers will have to continue forging links with Asia through scholarships, research collaboration, joint degrees and alumni networks. Local government through its sister cities and other programmes, and organisations such as the Asia New Zealand Foundation, will also need to keep building up our non-offi cial and parallel contacts with Asia;
• personal contacts between New Zealanders and people from Asia are just as important as the formal relationships. These linkages are created by many interactions (business, education, cultural exchanges, travel).

Raising the tempo of our engagement with Asia

Increasing New Zealand’s engagement with Asia is not a task solely for the Government. All sectors have a role to play – many of those sectors are already actively involved. Effort on all parts is needed through:

• Leadership diplomacy – Official visits raise New Zealand’s profile, provide access to Asia’s leaders and help to build country-to-country relationships. Our tempo of official visits to Asian countries has not always been even. Encouraging more visits by leaders from Asia to New Zealand would allow key decision-makers to understand us better. In some cases there is a need for visits both ways to expand beyond the foreign affairs and trade portfolios.
• Official engagement – New Zealand has a network of official representation throughout the region to support our work in diplomacy, trade, education, development assistance, migration and other activities. We also have links to the region through the East Asia Summit, APEC, defence and security dialogues, and other regional processes. Our diplomacy demonstrates support for shared interests with Asian countries, raises awareness of New Zealand interests and what we have to offer, and helps us to understand our neighbours in Asia better. The Ministry of Foreign Affairs and Trade has a responsibility to ensure that the Government’s dealings with the region are managed for coherence.
• Business links – A number of New Zealand companies are engaged in exporting to markets in Asia. New Zealand Trade and Enterprise has a role to play in providing greater support for our businesses in key Asian markets, working with other agencies to build capability onshore, and building New Zealand’s “brand” in Asia. We also need stronger ties between New Zealand business and industry groups and counterpart groups and corporations in Asia to help our businesses gain access to local market information and networks.
• Non-official ties – Our relations with Asia go well beyond offi cial contacts. Academic, “Track II”, sister city, cultural and other people-to-people exchanges are valuable both in themselves and in strengthening our overall relationships with the region. The Asia New Zealand Foundation plays a role in this area. Making good use of our existing Asian migrant networks is also important.

New Zealand has to accelerate the tempo of relationships with the region – politically, economically and socially. It is never easy for a small country such as ours to deal with a region as vast and diverse as Asia. The New Zealand effort towards Asia needs to rest upon a “New Zealand Inc” approach:

• to maximise our resources, there has to be close co-ordination and policy cohesion among New Zealand Government agencies. The New Zealand Government has a major part to play, especially in organising its policies and efforts and in facilitating the contributions that others can make;
• our relations with Asia are not the sole property of the Government. The Government recognises and values the efforts undertaken by the non-government sectors in building their own Asia relationships. New Zealand has to work actively in its own interests. This requires a continuing renewal of the investment we make in our regional relationships.

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