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Summary
- New Zealand authorities call for the diversification of the country’s exports.
- Exports to China in April 2020 are as high as 30% compared to other countries.
- In case of any diplomatic tension between the two countries, New Zealand’s trade would be adversely affected.
The Jacinda Ardern-led government does not want to take the nation to a trade conflict with China; the same that one can witness between its neighbouring country, Australia, and China in the current times.
Source: © Nionx | Megapixl.com
New Zealand's trade dependence on China is ever-growing and the authorities have cautioned NZ exporters about their over-reliance on China, fearing any unfavourable situation may adversely affect the relation with the Asian country, which may throw the nation’s trade off balance.
Read: Ardern Keen On US Ties And Clears NZ’s Stand Regarding Five Eyes Alliance
China: NZ’s major business partner
NZ’s major exports to China comprise dairy products, wood, and meat, etc.
Since 2017, China has been Aotearoa’s biggest trading associate. The country’s exports with China were valued at $20.1 billion and imports stood at $13.3 billion in 2019, which resulted in a trade surplus of $6.8 billion.
However, with the remaining countries, the trade surplus just accounted for $2.6 billion by the end of 2019.
Despite the initial effects of the coronavirus pandemic, consignments to China totalled NZ$17.8 billion, i.e. nearly 30% of the total exports for the fiscal year ended April 2020. On the other hand, exports to other countries such as Australia, the US, and Japan were only 13%, 11% and 5.5%, respectively.
Read: Jacinda Ardern Optimistic About NZ’s Growth With Possible FTAs With UK And EU In Future
Such a skewed trade relation could hamper NZ’s trade viability in case of any diplomatic tension.
Australia and China at loggerheads
Recently, Australia faced the Chinese government’s wrath when it questioned the origin of COVID-19 and had cancelled certain Chinese investments, including Victoria’s Belt and Road agreement.
Read: New Zealand In Awkward Spot As Tension Between Australia And China Soars
Following this, the Canberra Government suffered an enormous business loss worth $20 billion when Beijing blocked the former's shipments of wine, lobsters, coal, etc., into its territory and instructed its citizens not to visit Australia.
This has further escalated tensions between both the countries and has given a rise to a cold war-like situation between them.
Five Eyes denounces China
Moreover, the open condemnation by the Five Eyes alliance on the ill-treatment given to the Uyghurs in China's Xinjiang region, and the Hong Kong issue, have enraged the Beijing Government.
It vehemently negated the allegations and labelled it as a vice on China’s sovereignty.
Need of the hour: Diversification of Kiwi exports to other markets
Recently, NZ’s Foreign Minister, Nanaia Mahuta, has advocated the diversification of the country's export market, as New Zealand is feeling the heat from its Western allies to take a stand against China on the above-mentioned issues.
Read: NZ PM Hints At Disagreements With China At The China Business Summit
The country feared that its exports might take a hit and the country may be penalised with tariffs and other charges.
Following this, one of the officials from the Beijing Government expressed that Wellington must not pay heed to external distractions and should work for the mutual benefits of both the countries.
