Ladies and Gentlemen,
It is an honour and pleasure to address the China Business Summit again. First, I want to acknowledge NZINC and the Auckland Business Chamber for hosting this event. And thank you, Fran and Simon, for your kind invitation.
I would also like to acknowledge the speech by Rt Hon Prime Minister Hipkins, which speaks to not only the importance of this relationship, but also the approaches that would be adopted towards conducting the relationship going into the future. I also want to acknowledge Hon Minister Damien O’Connor and Senator Tim Ayres for your comments.
Not long ago, Prime Minister Chris Hipkins led arguably the largest-ever delegation, trade or otherwise, to China, and many guests present here today joined this successful visit. As a new milestone in China-New Zealand relations, the Prime Minister’s visit was productive and fruitful. I was privileged to accompany the delegation throughout their journey in China and would like to share with you three of my deepest impressions.
The first impression to share is that the visit has again showcased the broad consensus reached by the two countries at the highest level on the continued development of the bilateral relationship. Since the inception of our diplomatic ties, successive leaders of both countries have established a clear common understanding that a healthy, stable, and thriving bilateral relationship is in our mutual interest. This conception of the relationship was reaffirmed and amplified during the visit, as manifested in the joint statement from the two Governments on further developing our Comprehensive Strategic Partnership.
More importantly, as you can tell from the enthusiasm shown towards the outcomes of this visit in wide areas, ranging from mutual understanding and trust, trade and broader economic links, science and technology, education, agriculture, to people-to-people exchanges, the mutually beneficial practical cooperation between us enjoys broad-based support in both countries.
Notably, the visit was well received and widely covered by the media in both countries, which is yet another indication of the intense interest in, and the solid foundation for our Partnership.
All this gives me confidence in the future of our relationship, for there is no better guarantee than a combination of high-level stewardship, participation of the business community, and public support for a productive and enduring relationship going down the road.
The second impression I want to share is that our Comprehensive Strategic Partnership keeps evolving and brings tangible benefits to our two countries, particularly two peoples.
In Tianjin, I joined the Prime Minister and the rest of delegation on a visit to a local supermarket and witnessed the level of penetration by New Zealand businesses and products on the Chinese markets, and the extent to which these products, including but not limited to kiwifruits, dairy and meat, and wines, have made their way into the homes of ordinary Chinese people.
In Shanghai, Tourism New Zealand and Xiaohongshu, a lifestyle-sharing platform immensely popular among the younger generation of Chinese consumers, launched a partnership, reflecting and building upon the appeal of New Zealand tourist offerings among Chinese travellers.
These examples are just a microcosm of the close cooperation between our two countries. For years, the two sides have been taking advantage of the complementarities between us to make the pie of common interests bigger, with our bilateral trade exceeding 40 billion NZD last year. Behind these headline figures, it is jobs and incomes for New Zealand and New Zealanders, and also high-quality products and services brought to large numbers of consumers in China, which have benefited the socio-economic development of both countries and demonstrated the mutually beneficial nature of our win-win cooperation.
My third and final impression to share is that our Comprehensive Strategic Partnership has great potential and vast room for further growth. During the visit, President Xi Jinping, Premier Li Qiang and Chairman Zhao Leji of NPC Standing Committee met with Prime Minister Hipkins, and the leaders from both sides reiterated the commitment to further strengthening our bilateral relationship, in particular, to expanding practical cooperation to unlock its full potential. While promoting cooperation on trade in traditional sectors, the leaders also agreed to set our sight on exploring opportunities in e-commerce, trade in services, green economy, and Maori economy.
In this connection, many kiwi businesses signed or renewed agreements or contracts with their Chinese partners during the visit, covering areas of dairy, meat, fruits, pet food, health, personal care, hotels, and sustainable development. Examples include the reinstatement of the Guangzhou-Christchurch direct flights, the strategic cooperation between Comvita and China Resources Vanguard Supermarkets, between New Zealand-owned Swiss-Belhotel International and CTG Hotel Group, and between Tourism New Zealand and Xiaohongshu as I have mentioned earlier. In addition, multiple inter-governmental instruments were signed in areas of science and technology, education, agriculture, forestry, quarantine, food safety, and intellectual property rights, providing the institutional framework for relevant cooperation in future. Thanks to the focus of attention and the face-to-face encounters made possible by the visit, the people and business communities of the two countries have got to know each other better, gaining a deeper understanding of, and greater confidence in the opportunities and potential of our cooperation ahead.
Ladies and Gentlemen,
During the visit, the Chinese leaders also briefed the Prime Minister on China’s development path as well as the resolve and measures to implement the new concept of development featuring openness, innovation, coordination, sustainability and inclusiveness, accelerate reform and opening-up, and realize high-quality development.
This brings me to another topic I am keen to share with you today, the outlook for China’s development and the opportunities it generates for the rest of the world, which powers at a foundational level the long-term growth of the China-New Zealand partnership.
In China, we believe that the path a country chooses for its development cannot and should not be divorced from its own history and tradition. Otherwise, it will lose its roots and thus its identity and direction. Equally importantly, it must keep abreast of the trends of the times. While staying in the bubbles of a bygone era might give people a false sense of comfort or security, it will not solve their problems, nor will it enable them to grasp the opportunities of the present, let alone to embrace the future.
Admittedly, today’s world is undergoing momentous changes. These are driven firstly and fundamentally by leaps and bounds in science and technology, which have been transforming patterns of production, social administration, and interpersonal communications, as traditional monopolies falter and new industries and products emerge.
Like it or not, tectonic shifts are taking place in international relations as well, with the rise of a number of developing or emerging market countries and the evolutions in the rules and architecture for global governance. Not all changes are for the better, though, given the rising anti-globalization sentiments and moves to decouple or break originally efficient and robust supply chains in the name of security or resilience we see in different parts of the world, particularly in some of the onetime alleged champions of free trade and global cooperation.
On top of that, the clock is ticking on some of the common challenges we face as humankind, such as climate change that requires urgent coordinated collective actions.
Against the background of these profound transformations, for which China is both a stakeholder and in some cases, a driver, the Chinese path to modernization we have charted for ourselves features increasing reliance on endogenous innovation as a major driver for growth.
It also requires continued opening-up and integration with the rest of the world. Just as President Xi Jinping puts it, only an open China can become a modernized China.
Essential to our approach to the modernization drive, China also follows a peaceful road to development. As we have made it clear multiple times, we do not seek to outcompete, unseat or challenge anyone. Our sole purpose is to enable our own people to live better and fulfilling lives, just as any responsible government will seek to do for its own people. And we are willing to share the benefits and opportunities of our development with other countries in the world and contribute to addressing global challenges on the basis of mutual respect, peaceful co-existence and win-win cooperation. For all that has happened, China, like most countries, still believes that openness, integration and cooperation, rather than exclusion, division or military blocs and confrontation is the way to go for our deeply interconnected world.
At the same time, there should not be any doubt that we shall resolutely safeguard our sovereignty and territorial integrity, and legitimate security and development interests, including, in particular, our right to development, again, just as any sovereign and independent country, including New Zealand will do.
Ladies and Gentlemen,
Over the past decade, China has been an important source of growth for the world economy, with its economy growing at 6.2% on average annually, contributing over 30% of global growth. In the middle of a global slowdown, China stands out as a large economy with stable and robust economic performance and low inflation. This year, confidence in the Chinese market has picked up with a strong rebound in consumption and investment. The economy grew by 4.5% in the first quarter and in a matter of hours, the latest statistics will be announced for the second quarter. I am not in a position to drop a gun, the general expectation is that growth in the second quarter will pick up considerably as compared to quarter one. Retail sales in May grew by 12.7% over the same period last year. Trade shows its resilience with a year-on-year increase of 2.1% of total goods imports and exports in the first half of this year. The latest statistics released by the United Nations indicate that incoming FDI into China defied the general trend of a 12% drop globally and grew by 5% in 2022, a remarkable vote of confidence by the global investor community in the long-term prospects for growth in China. And the momentum has continued in the first half of 2023, as evidenced by the visits to China by the heads of some of the leading multinational corporations in the world.
The international community remains optimistic about China’s economy for this year. The World Bank lifted its prediction of China's economic growth for this year to 5.6%, while the IMF expects China’s economy to expand by 5.2%.
In the short run, China’s economy might encounter some headwinds as a result of internal and external factors, especially efforts by a small number of countries at containing and suppressing China’s development through extensive coercive measures including trade and investment restrictions and decoupling and breaking of supply chains. They sometimes call it de-risking now, which is at worst a fig leaf for decoupling, or at best a very slippery slope towards more or less the same results in increased fragmentation, lower efficiency, less resilience, weaker growth and greater rather than smaller risks for the world as a whole and all countries that rely on a functioning open global economy.
In the long run, however, the strength, resilience and potential of the Chinese economy remains unchanged, as the fundamentals sustaining its long-term sound development remain unchanged.
As the second largest economy, the biggest merchandise trading country, and one of the biggest consumer markets in the world, China will open its door wider and integrate itself deeper into the world economy. China has realized its development in the process of globalization and remains firmly committed to free trade, openness, integration, and cooperation within the framework of an open, rules-based and non-discriminatory Multilateral Trading System.
We currently have a 400 million strong middle-income community, which is expected to double to 800 million by 2035, bringing about a supersized market open for the whole world. We have a full-fledged manufacturing sector featuring whole production chains. Continued urbanization and industrialization for decades to come will remain powerful engines for further growth. More importantly, the innovation-driven development approach has accelerated industrial transformation, so that China leads the world in an increasing number of areas like EVs, high-speed railway, new energy, and new materials.
With these favourable conditions, China is well-placed to overcome the difficulties and challenges to sustain mid-to-high growth rates well into the future and realize robust and high-quality development.
Ladies and Gentlemen,
The growing relationship between China and New Zealand over the past 50 years has amply demonstrated that our common interests far outweigh our differences, that we are each other’s friends and partners rather than rivals, opportunities rather than threats. Both countries pride ourselves on an independent foreign policy, both oppose confrontation, conflicts and being forced to choose sides. We share a commitment to free trade and an open world economy, the international system with the United Nations at its core and the international order based on international law. And both stand ready to work with others to maintain international and regional peace and stability, and promote common development and prosperity. We both support international cooperation to address common global challenges such as climate change and support our Pacific Island partners in their pursuit of sustainable development. All these showcase the significant commonality we share and serve as the fundamental reason why our two countries, by working together, can and will bring more certainty to the world.
This year marks the opening of the second 50 years of our bilateral relations, and 2024 will mark the 10th anniversary of the establishment of the Comprehensive Strategic Partnership between the two countries. Just as President Xi Jinping emphasized during his meeting with Prime Minister Hipkins, China has always regarded New Zealand as a friend and partner. No matter how the international landscape may evolve, our commitment to developing friendly relations with New Zealand has not and will not change.
It is no surprise that there are differences between our two countries, given the differences in our respective circumstances. There is no inevitability, however, that countries with differing social systems and levels of development cannot co-exist peacefully and cooperate productively. Indeed, as reaffirmed again at the highest level during the Prime Minister’s visit, both sides refuse to allow the differences between us to define our relationship. Building on what we have achieved together through hard efforts, and based on the principle of equality and mutual respect, the principle of seeking commonality while managing constructively and transcending our differences through dialogues rather than megaphone diplomacy, the principle of non-interference in each other’s internal affairs, and above all, the principle of mutually-beneficial cooperation, China stands ready to work with New Zealand to implement the latest consensus reached between our Leaders during Prime Minister’s recent visit, and progress further our Comprehensive Strategic Partnership, to bring more benefits to the two countries and peoples and make greater contribution to world peace and development.
Finally, I wish the China Business Summit a success!