Phil Goff Speech: New Zealand’s Engagement With China

Delivered to Wellington branch, NZ-China Friendship Society Connolly Hall, Wellington 6pm, 27 October

Ladies and Gentlemen, tena koutou katoa, nimen hao, good evening.

Thank you for the opportunity to speak to you about "New Zealand's Engagement with China".

The term "engagement" is a good word to describe New Zealand's growing interaction with China.

Relations between our countries are expanding and strengthening across the board. Wherever one looks, there is evidence of sustained and increasingly fruitful contacts.

The sheer volume of exchanges between our politicians, officials, businesspeople, students and tourists is expanding rapidly. At the official level, we have seen some historically significant developments over the past year.

Tonight I want to explore the development of our partnership in three areas: In trade and economic terms; In political relations, and Through our people-to-people links.

Finally I would like to make a few remarks about the future of our partnership with China.

First, let's look at the trading relationship.

China has undergone an economic transformation virtually unparalleled in world history. The Chinese economy quadrupled in size and some 200 million people were lifted out of poverty in the 25 or so years from the time of Deng Xiaoping's reforms in the 1980s.

With a GDP growth rate of more than nine per cent and total GDP of over US$1400 billion last year, China is one of the world's most dynamic economies. Along with the United States, it is becoming one of the twin engines of the global economy.

While New Zealand, with a population of just four million people, is a relatively small market, China sees us as a trusted and established player in the multilateral trading system.

New Zealand was an early supporter of China's entry into the World Trade Organisation. In August 1997, New Zealand became the first OECD country to complete accession negotiations with China ahead of its entry to the WTO.

Earlier this year, New Zealand also became the first OECD country to recognise that after 25 years of reform, China had now established a "market economy" system.

China's economic growth means greater prosperity for its people. China's middle class population has reached an estimated 150 million people, and its ranks are being added to every day. It is this emerging middle class that has driven the rapidly increasing demands for products that New Zealand is able to provide.

For example: Since 1999, our export of forestry products, largely to supply China's housing boom, has quadrupled, making China the fifth largest market for NZ forest products; Fonterra's dairy exports to China have been doubling every three years. Last year, China was our fourth largest market for dairy products –predominantly whole milk and skim milk powder – in volume terms; It is now our third largest market for lamb, and kiwifruit sales are rising, and China has long been, and still remains, our largest export market for wool.

Conversely imported Chinese products are now a part of everyday life here - from computers to cameras, to clothing and shoes, to golf clubs and children's toys. New Zealand consumers have benefited. Our economies are complementary, which has assisted the rapid growth in trade.

In May this year, our Trade Minister Jim Sutton and his Chinese counterpart, Bo Xilai, signed a Trade and Economic Co-operation Framework in Auckland. This agreement was the first formal step in the process that has led to the current studies in preparation for a Free Trade Agreement.

There is no doubt that working towards an FTA has been the highest profile outcome from the Framework agreement. But its impact goes far beyond that. The Framework covers a range of areas in which New Zealand and China are committed to working together, including areas as diverse as animal husbandry, tourism, labour, environmental protection, science and technology, and development issues.

In fact, there's hardly a sector of our economy that isn't covered in some way.

The successful conclusion of the FTA negotiations will further increase trade. There is enormous interest in the FTA from the private sector.

New Zealand and Chinese officials are making good progress towards completing the joint feasibility study that looks at the impact of a Free Trade Agreement on our countries. Early results from the economic modeling work show that we can expect some very substantial benefits. There will be good gains in agriculture - especially dairy, fruit, vegetables and processed foods. It's clear that a Free Trade Agreement will create more opportunities for New Zealand to sell our products to China

China is now New Zealand's fourth largest trading partner, with total trade of around four billion New Zealand dollars. On top of this there are hundreds of millions of dollars in two-way investment.

Our Government has recognised the vast potential that exists. I am confident that once the FTA has been concluded New Zealanders will embrace the opportunities it will provide.

President Hu Jintao's visit to New Zealand last October gave a significant boost to the recent strengthening of our bilateral trade and economic relationship.

This requires ongoing dialogue and co-operation at the political level. Political visits help to increase awareness of the perspectives and priorities of the other side, and build respect and understanding.

We were pleased that President Hu made the effort to visit New Zealand so early in his term in office.

In the last eighteen months New Zealand has also received visits from five of China's most senior leaders.

In return, my ministerial colleagues and officials have been warmly welcomed on all their visits to China. In the last 18 months, China has received our Ministers of Foreign Affairs, Education, Research, Science and Technology, Health, Trade Negotiations, and the Speaker of the House of Representatives.

As well as such visits our interaction at a variety of regional and international gatherings contributes to strengthening the overall relationship.

This year, I have met my counterpart, Li Zhaoxing, at the ASEAN Regional Forum in Jakarta, and also Vice-Minister of Foreign Affairs Zhou Wenzhong at the Pacific Islands Forum in Apia.

Jim Sutton met his counterpart, Bo Xilai, at the ASEAN Economic Ministers' meeting in Jakarta. Michael Cullen met with China's Finance Minister, and the Prime Minister and President Hu will meet again at APEC in November.

Political discussions between our two countries encompass a wide range of bilateral, regional and multilateral issues. It is a feature of the political maturity of our relationship that we can discuss issues on which we have different as well as similar viewpoints.

Taiwan is an issue of key importance to China. New Zealand since 1972 has followed a One China policy and will continue to do so. This means we do not have a political relationship with Taiwan but we do have a strong economic, cultural and people to people relationship with it.

New Zealand takes a close interest in developments between Taiwan and Beijing. It is difficult to understate the importance that a satisfactory resolution of these difficulties would have for regional security and well-being.

With my Australian colleague Alexander Downer, I expressed concern earlier this year at some of the directions that Taiwan appeared to be taking and urged that it do nothing to limit the scope for issues between China and Taiwan to be resolved peacefully and through dialogue. In expressing these concerns I have also encouraged China to seek political rather than military means of achieving unification, on a mutually agreed basis.

On North Korea, we have welcomed China's constructive role in the Six Party talks. New Zealand will continue to promote diplomatically an end to nuclear weapons programmes on the Korean peninsula and North Korea's acceptance of its obligations under the Non-Proliferation Treaty and the International Atomic Energy Agency.

New Zealand is also working with China internationally to promote security and to address pressing issues such as terrorism and trans-national crime.

On human rights, New Zealand continues to promote the adoption of and respect for internationally agreed human rights standards. Our position on this is consistent in relation to all countries. We regard freedom of expression, assembly and of religion as fundamental.

We have also had constructive engagement with China over the rights of national minorities, such as Tibetans, to preserve their cultures, religions and identities, and to run their own local affairs to the greatest degree possible.

New Zealand welcomes steps taken by China to reform its judicial system and strengthen the rule of law. There have been a number of study visits by Chinese officials to New Zealand related to public sector reform and improving standards of governance.

In the past few years the Office of the Ombudsmen, the Human Rights Commissioner, the Ministry of Justice, Police, and Department of Corrections have all received Chinese officials on study visits. We are eager to share our experiences to influence practical improvements to further human rights in China.

An important means of increasing our understanding of one another is the expansion of exchanges at the people to people level.

This area is also experiencing huge growth. Personal contacts between our peoples are now more frequent and wide-ranging than ever before.

Our Nobel prize-winning scientist, Professor Alan McDiarmid, is working collaboratively with nanotechnology research institutes in China. Our sister-cities relationships are thriving. We have a New Zealand artist in residence in Beijing. The Western Institute of Technology in Taranaki is placing dozens of NZ teachers in some of the best schools around China to introduce new methods of teaching English. And many young New Zealanders are volunteering to teach English in rural China.

In New Zealand, personal contacts from China are most visible in the education and tourism sectors.

Last year more than 40,000 Chinese students studied in New Zealand education institutions. These students had a tremendous impact on our country, including economically: the total contribution Chinese students make to our economy is now well over the billion-dollar mark.

It is important for this contribution to be sustainable and to benefit both parties. We are now looking increasingly at establishing and strengthening exchange agreements and other forms of education partnerships with counterparts in China.

In the last year, New Zealand has improved many aspects related to the education of students from China in New Zealand. Pastoral care of students has been strengthened. Aspects of the Code of Practice specifically in relation to very young learners have been improved. Ensuring quality in education is an ongoing process.

Education Minister Trevor Mallard has been to Beijing three times in the past two and a half years. The first ever Education Counsellor appointed by New Zealand was appointed to our Embassy in Beijing to work with Chinese education officials to ensure a better mutual understanding of each other's education systems.

The Ministry of Education has published a guide to living and studying in New Zealand. It is written in Mandarin and distributed to young people in China before they embark on their journey to New Zealand. Feedback from students indicates that this guide is very helpful. Chinese students are among the first to be given an opportunity to apply for recently announced International Post Graduate Research scholarships offered by New Zealand to commence study in New Zealand in 2005.

Together, we are working to ensure that Chinese students get the best education experience possible here in New Zealand.

Chinese students, along with the Chinese community in New Zealand, contribute to the richness and diversity of our culture and society.

The friendships forged between Chinese students and their New Zealand counterparts contribute to the development of enduring links between our countries.

Organisations such as yours also have a very important role to play.

I commend the New Zealand-China Friendship Society for promoting appreciation and understanding of China, both its people and its culture. Your society has contributed over a long period to a stronger and warmer relationship between New Zealand and China. I congratulate you for what you have achieved.

The experience Chinese people have when they are in New Zealand, whether short-term or permanently, affects our overall relations with China. Whether they are greeted with a smile when boarding a ferry, or have the hand of friendship extended to them when they are new to a school, it all becomes part of their experience of New Zealand.

Since China officially recognised New Zealand as an approved tourist destination in 1997, the number of Chinese tourists to New Zealand has grown to some 40,000 per year. It is now recognised as our fastest growing tourism market.

Last year New Zealand also welcomed some 17,000 Chinese business people to our country.

And as well, more and more New Zealanders are going to China. Last year about 50,000 New Zealanders visited China.

Where to from here?

In foreign relations, a long-term view is important.

China has thousands of years of recorded history. This influences the Chinese interest in investing in relationships for the long term. China looks for consistency in the policy and practice of its partners. New Zealand too is investing in its relations with China for the long-term. That is why our links at all levels are so important.

We need to continue to build personal partnerships with the Chinese. At the political level, we must strengthen our dialogue and look for opportunities to expand our cooperation in every field.

Every day there is some mention of China in our newspapers or media. Contrast that with the China of 32 years ago, when we established our diplomatic relations. Then, China was a closed society. Its economy was isolated and it stood outside virtually all multilateral institutions. The China of today is vastly different from the China of 1972.

We know that 30 years from now, China will probably be very different again from what it is now. But we expect its importance to New Zealand will continue to increase. This is why we need to keep building links at all levels.

I believe that recent developments in New Zealand-China relations provide an excellent platform for the future.

Thank you.

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