The great leap forward into China

Reuters

GROWTH: Converting the potential that China presents could deliver unprecedented prosperity to New Zealand through a rising demand for high quality food, says high-profile Australian broker Li Cunxin.

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Converting the potential that China presents could deliver unprecedented prosperity to New Zealand through a rising demand for high quality food, says high-profile Australian broker Li Cunxin.

A senior manager with leading independent brokerage Bell Potter Securities, Mr Cunxin is a strong advocate of his homeland superseding the United States and driving global growth for generations to come.

Making a whirlwind trip to Auckland to address a business audience at the Brokers Independents Group, the former superstar dancer was plucked from his commune school in rural China aged 11 to study at Madame Mao's Beijing Dance Academy.

Whether New Zealand wants to hang on to China's coat-tails and enjoy the ride is entirely up to it, he says, but with the foundations laid through a series of trade relationships the "scene is set for Kiwis to prosper".

Economic growth in China between 1979 and 2005 averaged 9.5 per cent a year. With this growth has come an expansion of trading relationships, and, equally important an explosion of a money-spending middle class.

Already about 200 million strong, Mr Cunxin says the number could double or triple in the next 10 years, generating the sudden emergence of purchasing power underscored by changing tastes.

He said: "The opportunities for agriculture are huge. Ten years ago these people wouldn't touch beef or lamb, but tastes are changing quickly. Chinese middle classes have developed a taste for good wine, another thing for which New Zealand is famous.

"Remember, all the time China is expanding, the land to farm to produce these things is disappearing. When there's a shortage they will come knocking on doors and New Zealand will definitely want to answer."

According to Statistics New Zealand, two-way trade between China and New Zealand grew by 19 per cent to more than $9 billion in the year to February. The trade balance is still solidly in China's favour, but that does not diminish the importance of last year's free trade agreement.

China is New Zealand's third biggest trading partner overall and its second biggest source of imports and fourth biggest export market, with New Zealand exports growing 35 per cent in the past year.

Despite the opportunities ahead, Mr Cunxin says New Zealand exports remains vulnerable to short-term falling demand , but the Chinese Government's stimulus package would help.