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In today's increasingly competitive international environment, countries like China and New Zealand need to take every opportunity to improve both countries' competitiveness, to forge partnerships that will strengthen their positions in the global economy and encourage the sustainable development of the two nations. Efforts of China and New Zealand towards trade liberalisation at the bilateral level build on and promote their efforts at the multilateral level, including in the WTO and APEC.
China and New Zealand have an excellent relationship underpinned by a high level of interaction between Chinese and New Zealanders through trade and investment connections, education, tourism, and other people to people exchanges. We also have a long history of working together internationally and in the Asia-Pacific region to promote trade and economic liberalisation, facilitation, and cooperation.
The relationship is characterised by regular high-level contacts, an expanding range of official dialogues (both formal and informal), healthy and diversifying trade and economic flows in both directions, and strengthening people to people contacts.
2002 marked the 30th anniversary of diplomatic relations between China and New Zealand. During this period, the bilateral relationship has become one of New Zealand's most important. As a permanent member of the United Nations Security Council, a new and significant member of the WTO, a major player in APEC, New Zealand's fourth-largest trading partner, and a major source of migrants, students and tourists, China is increasingly important to New Zealand as a bilateral, regional and multilateral partner. China also attaches great importance to developing ties with New Zealand. New Zealand is an active supporter of the trade and investment liberalisation process in APEC and one of China's most important trading partners in agricultural and forestry products. China looks forward to promoting all-round cooperation with New Zealand, particularly in education, technology, agriculture and tourism.
Channels of communication on trade and economic issues between China and New Zealand have expanded over the years. Economic and trade talks are held regularly by senior officials. In 1988 China and New Zealand signed a bilateral Investment Promotion and Protection Agreement. Memoranda of Understanding establishing mechanisms for dialogue and cooperation on sanitary and phytosanitary issues, agriculture, and forestry were signed in November 2001. A Joint Ministerial Commission has now been established as a forum for regular trade and economic dialogue.
The trade and economic relationship was lifted to a new level of cooperation in 2003 when President Hu Jintao visited New Zealand and agreed with Prime Minister Helen Clark that China and New Zealand should begin negotiations on a Trade and Economic Cooperation Framework. Additionally, in the course of the visit five economic arrangements and agreements were signed: two meat access protocols, an arrangement for consultation on technical barriers to trade (TBT), a renewed Science and Technology Agreement and an Arrangement on Mutual Recognition of Academic Degrees in Higher Education.
China and New Zealand have enjoyed close cooperation in APEC for a number of years. Their close association in the WTO was characterised by New Zealand being the first WTO member to finalise the bilateral negotiation associated with China's accession to the WTO. This close relationship has continued in the WTO with China and New Zealand working closely on many areas of the routine agendas and the Doha Development Agenda (DDA). China and New Zealand see the negotiation of an FTA as an extension of this cooperation. A high quality agreement covering all goods, service and investment offers the potential to add momentum to the WTO process, and to contribute to the achievement of APEC's important Bogor Goals.
Bilateral economic cooperation between China and New Zealand is now underpinned by the Trade and Economic Cooperation Framework (the TECF), which was signed in New Zealand in May 2004 by Chinese Minister of Commerce Bo Xilai and New Zealand Minister for Trade Negotiations Jim Sutton.
The TECF covers the commencement of the FTA study, consequent FTA negotiations and New Zealand's recognition that China has established a market economy system (the first country to do so). It establishes a Joint Ministerial Commission as a forum for regular trade and economic dialogue and outlines the practical steps that China and New Zealand will be taking to strengthen cooperation across a range of economic sectors. It reaffirms objectives that the two countries have been working on through existing mechanisms in areas such as agriculture, including wool, forestry, science and technology, tourism, education, environmental protection and investment. It promotes opportunities for dialogue between business and academic communities.
The TECF lays the foundations for future economic and trade cooperation between the two states.
The TECF also sets out the following terms of reference for this joint feasibility study:
Chapter One of this study provides an overview of bilateral economic relations between China and New Zealand, describes the TECF and sets out the objectives and structure of this study. Chapter Two provides factual information about the Chinese and New Zealand economies and an overview of trends in trade, investment and economic cooperation between China and New Zealand. It also describes the international context of the bilateral relationship.
Chapters Three, Four and Five consider the trends in the bilateral trade in specific goods and services sectors, and investment. They provide an overview of tariffs and other policies affecting trade and assess the impacts of liberalisation in each sector. Chapter Six identifies areas for strengthening bilateral cooperation between China and New Zealand. Chapter Seven covers competition and government procurement, and Chapter Eight assesses the feasibility of an FTA between China and New Zealand. Chapter Nine contains the conclusions and recommendations of this study.
This study was prepared jointly by China and New Zealand between May and September 2004.
All values quoted in this study are in US dollars unless otherwise specified. The Chinese RMB is pegged to the US dollar so a constant rate is shown throughout this period. The New Zealand dollar however is floating and as a result, unless otherwise stated, the exchange rates used in this study are the average exchange rate in existence over the period of the calendar year as shown in the table below:
Table 1.0 China and New Zealand exchange rates used in this study (US dollars)
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | |
| New Zealand | 0.526 | 0.512 | 0.409 | 0.415 | 0.496 | 0.625 |
| China | 0.121 | 0.121 | 0.121 | 0.121 | 0.121 | 0.121 |
Due to differences in the methods of compiling statistics in China and New Zealand there are some differences in statistics presented in this study.1 Where possible these differences have been reconciled.
1
These differences arise due to a number of
reasons, including because of differences in the methods of valuation of
goods, and also because some products shipped via intermediate ports or
investments lodged via intermediate countries, appear as trade and
investment flows with those intermediate countries instead of between
China and New Zealand.
