4 Oct 2013

Chinese confidence knocked but fixable - Maklouf

11:11 am on 4 October 2013

Chinese confidence in New Zealand's food exports has been knocked but it is fixable, Treasury head Gabriel Maklouf says.

Mr Maklouf has been in China recently visiting organisations including the country's Ministry of Finance, the People's Bank of China and the International Monetary Fund.

He said Chinese growth had slowed to about 7% annually, which was still healthy, and he expected its growing demand for dairy products to drive New Zealand's exports.

However recent food safety and access issues in China had tarnished New Zealand's reputation. The issues had highlighted the importance of developing deep relationships between people, and not just focusing on the trade opportunities.

"It's undoubtedly true that the food scare issue has had an impact," Mr Maklouf said. "Certainly food safety in China is a big issue for the Chinese and the confidence I think that people had in New Zealand, in the quality of New Zealand's product and in the safety of New Zealand's product has been shaken."

New Zealand government agencies operating in Beijing were doing a good job but there was work to be done to restore some of that confidence, Mr Maklouf said.

A key to doing that was appreciating how much relationships mattered to Asians, and to the Chinese in particular.

"So we need to make sure that we are investing in developing relationships with key interlocutors, whether they're business people, whether they're part of civic society, whether they're government regulators," he said.

"We need to build relationships. We can't rely on just a transactional relationship. We need to build something much deeper."

That would have a significant impact on the way the Chinese saw New Zealand, and how they worked with us.

"I think there is a general awareness here that relationships in China matter and we need to invest in them. I think it's just been brought home to me more," Mr Maklouf said.