23 Feb 2012

NZ firms told to take advantage of China free trade agreement

7:00 am on 23 February 2012

Firms are being warned to move quickly to take advantage of New Zealand's free trade agreement with China or they could miss out.

BNZ chief economist Tony Alexander has launched a monthly publication called Growing with China, aimed at small to medium sized companies.

He says exports to China have grown 151% to nearly $6 billion in the three years since the free trade agreement was signed, and within eight years China will be New Zealand's biggest trading partner.

But Mr Alexander says firms are not doing enough to profit from China's growth.

He says the challenge is to move beyond simple commodity exports such as milk powder and logs, into higher value added commodities, but also a far greater range of goods and services.

Mr Alexander says it's in the area of the non-primary exports that growth has been very low at only 14% over the past three years.

He says China recognises that high quality safe food products and agricultural technology and information processes can be sourced from New Zealand.

Mr Alexander says business people need to be prepared to spend time in China if they want to succeed.

And he warns against waiting for the buyers to come to them.

Mr Alexander says the risk is that China will sign trade agreements with other economies and they will get the tariff free access that New Zealand goods will have by 2016.

He says the earlier a country gets in, the earlier it can establish its brand, which is important to consumers as they get higher disposable incomes.

Mr Alexander says it's a chance to establish both a general New Zealand brand and a company specific brand before other companies get established.