Weekly Global Economic Round-up – 21 November 2022

Prepared by the Economic Division at the Ministry of Foreign Affairs and Trade.

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Highlights

  • US President Biden met with Chinese President Xi Jinping the day before the G20 summit in Bali, Indonesia. This was the pairs first in person meeting since President Biden entered office in 2021. In a three-hour meeting the leaders discussed a wide range of topics including Taiwan, North Korea, and Russia’s invasion of Ukraine. According to the White House readout(external link) of the meeting President Biden raised concerns about China’s non-market practices, and underlined that the US and China must work together to address transnational challenges including macroeconomic stability.
  • Prime Minister Jacinda Ardern also met with Chinese leader Xi Jinping for roughly 50 minutes on the sidelines of the Asia-Pacific Economic Co-operation forum in Bangkok, Thailand, late on Friday evening (NZ time). The two leaders discussed the bilateral relationship, including welcoming the 50th anniversary of diplomatic relations between New Zealand and China this year. Among the issues Prime Minister Ardern also raised were the situation in Hong Kong, tension in the Taiwan Strait, the South China Sea, and the issue of the Uyghur people. President Xi said he wanted to “take the China-New Zealand comprehensive strategic partnership to a higher level".
  • Negotiations on the upgrade of the ASEAN-Australia-New Zealand agreement establishing a Free Trade Area (AANZFTA) have now been substantively concluded. New Zealand already benefits from 99% tariff free goods access into the ASEAN region. The focus of the upgrade package is to modernise and improve an already high-quality FTA, bringing it into line with our current trade policy while also introducing new value-add areas. The key benefits can be summarised as: addressing barriers to trade; improving trade facilitation; delivering on Trade for All learning lessons from COVID-19. The upgrade is expected to be signed and enter into force in 2023.

Regional Updates

Domestic Updates

  • 2000 visas a year are to be granted through the resumption of the Parent Category Expressions of Interest(external link) (EOIs). The first selection of EOIs was made on 14 November and will continue to be selected in date order with the oldest EOIs being selected first. Selections will take place every quarter, with up to 2,000 visas a year granted to people with existing expressions of interest.
  • New Zealand had taken first place in the recently released sustainable trade index(external link) for members of APEC and CPTPP.
  • Aotearoa New Zealand recently hosted the third Global Trade and Gender Arrangement (GTAGA) implementation event which profiled “Women in STEM”. The virtual event brought together speakers and presenters from New Zealand, Canada, Chile, Mexico, Colombia and Peru, with an audience of around 120 people from more than 20 countries. Cathy Clennett, Co-founder of Hiringa Energy, represented New Zealand on the panel, and the event MC was Anna Guenther, NZTE’s Women in Export Lead. New Zealand’s work through the GTAGA and the Inclusive Trade Action Group (ITAG) are an important international facing element of our Trade for All agenda

Australia and the Pacific

  • President Xi Jinping met with Australian Prime Minister Anthony Albanese in the sidelines of the G20. This meeting marks an end to three years of no contact at leader level between China and Australia. Prior to the engagement Australia’s Foreign Minister Hon Penny Wong delivered a scene-setting speech, emphasizing the importance of continuing to “stabilise” Australia’s relationship with China. Wong identified areas such as climate change as offering mutual opportunity.

Europe

  • On 4 November, German Chancellor Olaf Scholz travelled to China, the first G7 leader to do so since the pandemic. During the 11 hour ‘bubble’ visit, Scholz met with both President Xi Jinping and Premier Li Keqiang. A small business delegation accompanied the Chancellor to reconnect with major business operations in China after COVID had prevented in-person contact.

Asia

  • Prime Minister Jacinda Ardern met Prime Minister Pham Minh Chinh of Viet Nam for a Prime Ministers’ Summit in Ha Noi, Viet Nam. The Prime Ministers reaffirmed New Zealand and Viet Nam’s economic ties(external link). Following the conclusion of the Prime Ministers’ Summit, they witnessed the signing of Civil Aviation and Education cooperation arrangements between New Zealand and Viet Nam.
  • China has announced it will reduce its mandatory quarantine period for foreigners arriving in mainland China by two days (5 days centralised quarantine and 3 days home isolation). China has also reduced its pre-departure testing requirements to 1 PCR test within 48 hours of boarding a flight to mainland China, and removed the ‘circuit breaker’ rule for airlines that exceeded a certain number of COVID cases per flight.

Americas

  • Amidst inflation and with a recession potentially looming, Deputy Prime Minister and Minister of Finance Chrystia Freeland presented Canada’s Fall Economic Statement last week. This delivered on several promises from the Budget in April, as well as announcing some limited spending on several new initiatives, with the two themes of making life more affordable and investing in inclusive jobs, growth and economy. Its narrative charts a plan to strengthen industry and build a net-zero economy with opportunities and jobs, across the economy.
  • US inflation data came in below expectations according to the Reserve Bank of New Zealand, decreasing from 8.2 percent in September to 7.7 percent. This is a positive result, despite remaining above the US Federal Reserve’s targets.
  • Prime Minister Ardern spoke to US President Joe Biden on the side of the East Asian Summit’s leaders’ dinner. The conversation followed on from their meeting earlier in the year, and included an update on the contribution of New Zealand producers to addressing the US shortage of infant formula, as well as aluminum and steel tariffs.

Market reports released this week

External links

The following links may provide useful information to businesses:

  • NZTE(external link) has a website focused on providing COVID-19 information for exporters. They’ve also launched myNZTE(external link), an interactive digital portal of insights and tools available to all New Zealand exporters.
  • The Treasury releases a weekly economic update(external link) every Friday. Stats NZ has published a data portal(external link) with near real-time economic indicators.
  • MBIE publishes a sector reports series(external link) which provides regularly updated reports on all industry sectors that make up the New Zealand economy. These include official economic data and the challenges and opportunities that face New Zealand’s industry sectors.
  • Business.govt.nz(external link) provides tools and advice from across government to save small businesses’ time and help make the business a success.
  • MFAT has created a tariff finder(external link) which is designed to help goods exporters and importers maximise benefits from New Zealand’s Free Trade Agreements and compare tariffs in 136 other markets.
  • The all of government Trade Barriers(external link) website can be used to register any trade barriers experienced or issues exporting to an offshore market. Queries can be sent via the website or through the MFAT Exporter Helpline 0800 824 605. Enquiries will be sent to the government agency best placed to answer.
  • Tatauranga Aotearoa Stats NZ provides official data on the value of New Zealand’s exports and imports of both goods and services, by commodity type via the New Zealand Trade Dashboard(external link). This interactive dashboard is updated every quarter and allows for filtering by country and by commodity type.

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Disclaimer

This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.

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