22 Jul 2021

Trade minister not expecting retaliation from China over cyber attacks criticism

7:40 pm on 22 July 2021

Days after New Zealand joined its Western allies in firing a warning shot across China's bows, the trade minister says security and trade are separate issues.

Damien O'Connor

Photo: RNZ / Samuel Rillstone

At a trade policy roadshow in Auckland, Damien O'Connor said he isn't expecting any retaliation after the government's criticism of Chinese state-sponsored cyber attacks. He said the government was working on trade agreements so businesses can have more options.

The political side of trading with China had some businesses concerned. Frank Olsson, the president of the New Zealand Europe Business Council, was among them.

"It seems that the gap is opening up there between what the politicians want and what the businesses want," he said.

However, others weren't worried about trade relationships - like Chinese-owned diary company Yashili New Zealand, which exports 70 percent of its products to China.

Commerical manager Amanda Zhu said there has been a long and good relationship and they were unaware of any issues.

"I'm not really worried about that," she said.

O'Connor didn't think the criticism was cause for concern over our trading relationship.

"This is a security issue. It's not a trade issue. We have no reason to believe that there should be any reaction," he said.

He said New Zealand will continue to have healthy trade connections with China, which is "a significant trading partner", but the government is exploring other opportunities in the trade recovery strategy - working alongside the traditional markets of the European Union, the United Kingdom, the US and Australia, as well as with China and East Asia.

"If you're a small business, a big business or your country, and you have a huge reliance on any one market, then that exposes you and that's why we're building trade agreements and trade connections with a whole range of markets, so our exporters and importers can have a range of options."

The deputy secretary of trade and economic at the Ministry of Foreign Affairs and Trade, Vangelis Vitalis, said China is a key trading relationship for New Zealand and many other countries.

Although trading is an important driver of export growth, employment and productivity here - it's not the only thing, he said.

"At the same time, what you hope to have with China is to have a mature relationship where you could talk about the range of things that are important to New Zealanders are not just business but to New Zealanders in general as well as business."

Vitalis said the free trade agreement with China has given businesses advantages.

He also said diversification has been a challenge for New Zealand for nearly 30 years. For example - the government has been negotiating with the EU for five years and it took more than a decade to launch those talks.

"If we're going to talk about diversification, we are actually going to need these free trade agreements to give us that leveling of the playing field so people have choice and then businesses can make their own decisions about where they need to be," Vitalis said.

"It's not my business to tell people where they get where they should go, or where they should export, but it is my business to try to make sure that there are those opportunities and those opportunities are fair."

O'Connor said the government is working through challenges and is determined to reach a free-trade agreement with the UK by the end of August.

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