Friday 29 August 2003

Rt Hon Helen Clark
Prime Minister

Launch of
“Seriously Asia – Look At The Future”

Sheraton Hotel
Auckland

1.00 pm

Friday 29 August 2003

I am very pleased to support Asia 2000 at today’s launch of the “Seriously Asia” project. “Seriously Asia” is about taking a fresh look at the opportunities and challenges of our relationships with the Asian region. Put bluntly, our country has not been maximising the potential of those relationships.

Thus, the “Seriously Asia” initiative is a reality check. It’s time to set new strategies and goals for our Asian relationships, and identify practical ways of achieving them.

Asia 2000 will reach its tenth anniversary next year. But 2000 is now three years behind us ! When the Foundation was launched, there was universal optimism about the Asian region. The headlines were full of “Asian Tigers” and “Pacific Centuries”, and almost no-one questioned the importance of Asia to New Zealand’s future.

The Asian economic crisis of the late 1990s put a dampener on perceptions. The pendulum of opinion swung hard towards pessimism, and in recent years a steady flow of negative reports seems to have kept it there. Terrorist attacks in South East Asia, SARS, and the regional impact of the Tech-Wreck are not the stuff of feel-good factors.

Overall Asia itself has bounced back from the economic crisis. According to the Asian Development Bank, economic growth in East Asia reached 6.6 per cent in 2002, while India, another emerging power, reached 4.4 per cent. New Zealand’s trade with Asia also recovered, but, as I will emphasise later, shows clear signs of having fallen back again.

New Zealand’s day to day contacts with Asia, however, have kept expanding. Much of the development of the international education sector has taken place in the last 10 years, and so has the growth of two-way tourism and migration.

Those who do visit Asia regularly can testify to the visible gap between pessimistic perception and Asian reality. What strikes one most forcibly in the cities of the region is the new affluence, the new infrastructure, the new technologies and the new lifestyles.

The question we in New Zealand Incorporated must ask ourselves is, why, given the region’s actual and potential growth, are our exports to Asia declining in value? Are we losing sight of the strong economic growth prospects which Asia has?

When I addressed a meeting of the APEC Business Coalition here in Auckland last November, I talked about the re-shaping of economic and power relationships around the world, and particularly in our own Asia-Pacific region. I mentioned as an example recent moves towards free trade agreements in East Asia involving important partners.

I said at the time that New Zealand could not stand like a possum in the headlights and allow itself to be marginalised. Our links with the countries of Asia were too important and needed constant attention.

By important, I meant absolutely vital. New Zealand’s Asian links are now so much a part of our daily welfare that we cannot just take them for granted.

Let us recall the facts. Last year around one fifth of total inward investment, one third of foreign trade, one third of tourism revenues and 80 per cent of the income from international education came from Asia.

And that is only the economic picture. Closer to home we have adopted kiwifruit of Chinese origin, futons and sushi, kites and dragon boats, foodstuffs and entertainment, and a thousand and one products to fill our homes. Cultural celebrations such as the Asia 2000 Lantern and Diwali Festivals attract tens of thousands of people and win Creative NZ awards.

We are entertained by New Zealanders of Asian ancestry like Raybon Kan and Jacob Rajan. Gold medalist Li Chun Li brought us honour at the 2002 Commonwealth Games. Dunedin entrepreneur Dr Tak Hung was joint winner of last year’s New Zealand Distinguished Biotechnology Award. Mayors Sukhi Turner and Meng Foon serve their cities, and my parliamentary colleagues Ashraf Choudhary and Pansy Wong serve the country’s political process.

Doctors, dentists, directors and draftsmen –one New Zealand resident in 15 is now of Asian descent, and they are represented in most walks of life. The old families are part of our history, while newer arrivals are enlivening our communities with the creativity of other traditions, knowledge of languages, the energy of personal networks, and the richness of cultural diversity.

A parallel, if smaller, picture is beginning to evolve in Asia itself. I was told on a recent visit to Korea that over 1500 New Zealanders teach English in that country alone. Another fifty are reportedly teaching in Brunei. Three thousand New Zealanders are believed to be living in Japan, with a similar number in Hong Kong. And there are active New Zealand communities in Singapore, Taiwan, China and elsewhere.

Not all these Kiwis are educators. The New Zealand expatriate community in Asia includes executives, engineers, and experts on everything from sport to law. New Zealanders are not simply drinking our beer over there ! Asian countries are importing our products and engaging our people.

At the end of the day, it is people who power relationships and create the statistics. And so we need to ask ourselves: are we making the best use of the human capital at both ends of New Zealand’s Asian equation?

We simply cannot afford to take our Asian links for granted. Asia in New Zealand is a reality, and so too is New Zealand in Asia. The big difference is that a small country like New Zealand needs the Asian dynamic far more than the large countries of the region need us.

What do I mean by dynamic? It has gone largely unrecognised here, but 2003 marks the 30th anniversary of British entry into the EEC. It is the anniversary of a time when our annual exports were less than two billion dollars and Europe, largely Britain, accounted for almost half of them. Exports to Asia were around fifteen percent of the total.

It is the anniversary of an era when the countries of the region had picked themselves up after the devastation of war and were setting their sights on the future. East Asia had entered a 35 year period when its average annual per capita growth would outstrip the world’s average by a factor of four.

And that growth had a huge impact. In thirty years New Zealand’s exports grew to around thirty billion dollars, with Asian markets accounting for 35 per cent of the total in 2002. Had it not been for the Asian dynamic and the new markets it created, New Zealanders would have faced a much more difficult future.

I had a second and more personal insight into Asian dynamics. In the mid-1980s, I chaired a Parliamentary Select Committee review of New Zealand’s relationship with China. As I recall our conclusions in a nutshell were that China would grow in importance to us, and that New Zealand should make a co-ordinated effort to grow the relationship.

In hindsight, we underestimated the impact China would come to have on us within the following fifteen to twenty years. It would have been a very farsighted person indeed, in the mid-1980s who predicted the 2002 statistics which China generated for New Zealand: $4 billion in two-way trade, 76,500 visitors, and 30,800 students within the country’s international education sector.

It would have been equally difficult to predict that China, Hong Kong, and Chinese Taipei would all have been sitting around an APEC table in 1991, or that China would have acceded to the World Trade Organisation in 2001. Forecasts of that kind in the mid-1980s would have been dismissed as improbable and even eccentric. Yet all of them happened.

Twenty-twenty hindsight is easier than gazing over the horizon. But we do not have the luxury of sitting back and letting others determine our future. We must have an effective understanding of the part which the Asian region will play in New Zealand’s global destiny. We must also develop the knowledge and skills we need to influence the course of events.

Strong and well maintained relationships with and between the countries of the region are very much in New Zealand’s interests. The Cold War is over, but Asia remains a region where the interests of the world’s major powers intersect. The security and welfare of New Zealand and its Pacific neighbours are intimately connected with it.

What do we know at the moment about Asia’s future potential? At a general level, we know that the Asian Development Bank expects that East Asian economies will continue to expand this year at 5.6 per cent, and somewhat faster next year. We know that China has set a goal of quadrupling its economy by 2020, and that it is now unquestionably an engine of growth for the region and the entire world.

Growth forecasts for Asia continue to outstrip those for the rest of the world. The World Bank forecast for global economic growth this year was 2.5 percent.

We know that large processes of demographic and economic change are driving major shifts in perception and demand, not only in China but throughout Asia. We know that India is developing fast as an economy and knowledge society, and could overtake China as the most populous nation on earth. We know that there are problems in the Indian sub-continent too, including threats of nuclear proliferation and the realities of terrorism. But, as history has shown, we also know that there are many opportunities. Our New Zealand perceptions of India and its potential need to be radically and rapidly revised and updated.

There are many challenges for New Zealand in Asia. I referred earlier to the possible trade implications of discussions on regional economic agreements in which New Zealand is not involved. There are other signals which we need to take seriously, including recent negative publicity in China with respect to New Zealand as a study destination.

There are also challenges of scale and expertise. How can the players of a very small country like New Zealand compete effectively in a huge and diverse theatre like Asia? Can we develop and sustain the wide skills and cultural knowledge required for effective long term and expanding relationships?

An immediate concern is the drop in New Zealand’s export receipts from Asian markets. With the exception of China, the value of New Zealand’s exports to the major markets of Asia declined in the trade years both to December 2002 and to June 2003. The latest figures put the region’s share of New Zealand’s total exports at 35 per cent, below a peak of 37 per cent in 2001. And our exports to Asia have registered a somewhat larger fall than the 10 per cent decline by value in New Zealand’s exports as a whole.

Factors such as currency movements and commodity cycles have contributed to these results. They raise questions nevertheless, both in the light of continuing regional growth and of the performance of a roughly parallel partner like Australia. East Asia accounts for over half of all Australian exports, but they declined by only four per cent in the year to December 2002. New Zealand’s exports to East Asia accounted for a little over one third of the total, and over the same period they fell by twelve per cent.

Are we doing as well as we can on all fronts? I think the answer is “No”. The government has asked Asia 2000 to help find answers and solutions. One of Asia 2000’s objectives is to encourage informed public discussion about issues related to New Zealand’s Asian links, and we are asking it to do just that through the “Seriously Asia” initiative.

Asia 2000 has developed an open and inclusive process for the “Seriously Asia” project, and I welcome that warmly. The challenges and opportunities of the Asian region affect every New Zealander, irrespective of occupation, city, ethnic background or political viewpoint.

“Seriously Asia” is seeking views from across the spectrum. I intend to provide mine and to do what I can to encourage others to do the same. I hope that you will do likewise. A good starting point is the “Seriously Asia” website at www.seriouslyasia.org.nz.

In November I will host a conference at Parliament on Asia 2000’s behalf which will bring together guests from Asia and New Zealanders with a wide range of perspectives. The conference will consolidate views received and identify priority goals and practical proposals for action.

I do not expect that this year’s initiative will produce the final word, but I hope it will make a good start. The issues are important, substantial, and evolving. Asia 2000 will monitor implementation of this year’s outcomes, and also continue to keep the question of New Zealand’s linkages with Asia on the public agenda.

Finally I want to express appreciation to the private sector backers who have joined the government in funding Asia 2000’s “Seriously Asia” initiative. They are: Fonterra, LG Electronics and Minter Ellison Rudd Watts who have joined as partners; and Grand Hotels International and Singapore Airlines who have joined as supporters. The assistance of Investment New Zealand and the NZ Institute of International Affairs is also greatly appreciated.

“Seriously Asia” is a partnership, and it must not be a “one off”. It is a serious focus on New Zealand as a unique nation, located in the Asia Pacific, which wants to enhance its regional relationships so that they reach their full potential. This is a project for New Zealand Incorporated – and not just for government. We invite you to be part of it.

ENDS

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