New co-operation agreements with China

'REAL FRIENDS': John Key meets with China Premier Li Keqiang at the Great Hall of the People.
'REAL FRIENDS': John Key meets with China Premier Li Keqiang at the Great Hall of the People.

John Key admitted he jumped in fright at the first volley of a 19 gun salute, ringing out over Tiananmen Square last night, as the prime minister was welcomed as a "real friend" by China's new premier Li Keqiang.

Key and dozens of members of what is believed to be the largest business delegation to travel with a New Zealand prime minister were given a spectacular welcome last night (NZT) at the Great Hall of the People in Beijing.

While he met new Chinese President Xi Jinping at the Bo'ao Forum on Sunday, yesterday's event was the showpiece of the week-long trip.

John Key introduces China Premier Li Keqiang to the New Zealand delegation at the Great Hall of the People in Beijing. He is shown here shaking Tim Groser's hand.
John Key introduces China Premier Li Keqiang to the New Zealand delegation at the Great Hall of the People in Beijing. He is shown here shaking Tim Groser's hand.

Premier Li is the closest equivalent to Key in the Chinese political system, while yesterday's event had pageantry rarely seen in New Zealand.

Uniformed military lined the steps of the hall as Key approached as part of a motorcade, for which the busy streets of China's capital were closed.

After being introduced to top Chinese officials by Li, who took up his role in March, Key introduced the Chinese premier to leading members of his delegation, as cannons boomed over the square, the scene of famous, and bloody, democracy protests here in 1989.

Key was then escorted past about 100 military honour guards as a large brass band played both God Defend New Zealand and March of the Volunteers, the Chinese national anthem.

China's importance to the New Zealand economy is already massive, with trade growing three-fold since the signing five years ago this week, of its only free trade agreement with a developed country, and it is expected to continue to grow.

Key predicted this week that the number of visitors from China may rise five-fold to a million in five years, while the rate of growth in exports, 17 per cent in 2012, may accelerate, meaning China could overtake Australia as our largest trading partner in the coming years.

Amnesty International overstated the relationship yesterday, wrongly claiming that China was already New Zealand's largest trading partner, as it urged Key "to raise our human rights concerns" on the trip, as it released a new report showing China executed more prisoners than any other country.

Key said after the meeting that the issue of human rights was raised at his meeting with Li, although no specific details were given, with only talk of the "dialogue" between the two countries.

"Obviously it's an area where we need to continue talking," Key told reporters yesterday.

He said the ceremony was one "to die for" and that Li had explained it reflected the importance of the relationship.

"The premier said to me when the troops were walking past that 'this is the welcome that we afford to a real friend, and it's a sign of the way that we value your visit here', and my visit to Beijing," Key said.

"So it's deliberate, that they do that, it's very nice of them and it's a very grand ceremony."

Key said his meeting with Li was "extremely warm" and formed a nice book-end to the meeting he held with the president on Sunday.

"This is a very joined-up system and you'd expect the message to be consistent and they were," he said.

"This is a relationship that they highly value. They appreciated the visit. They have high expectations about what we can achieve together."

Media were allowed to watch the opening minutes of the meeting, where Li told Key he clearly remembered his visit to New Zealand in 2009.

"The China-New Zealand relationship is in excellent shape and it is proven to be a model of relations between China and a developed country," Li said through an interpreter.

He praised Key's work at diplomatic relations.

"Under your watch much progress has been made in the relationship."

Key offered Li congratulations on his appointment in March, linking the size of his travelling party to the importance of the relationship with China for New Zealand.

"I think that reflects a great belief that the people of New Zealand have that this is a critical relationship," he said.

The two leaders discussed the situation of North Korea, where Li reaffirmed the country's commitment to peace on the peninsula, as North Korea's young dictator Kim Jong-Un issued warnings to foreign citizens in South Korea to leave because of the threat of a nuclear attack.

Key said he felt no need to clarify his position on a possibly conflict in North Korea, after he made a gaffe earlier in the week by suggesting New Zealand may continue to back its historic ally South Korea in a possible conflict.

This week's trip is a highly choreographed attempt to build a sense of co-operation and friendship with China, elements seen as a more vital component for business links here than almost anywhere in the world.

Following the meeting the pageantry continued with the official signing of six agreements ranging from co-operation between the two countries' educations ministries to encourage collaboration and student exchange, to co-operation between officials in both countries to help prevent the importation of products containing pseudoephedrine, a major ingredient for the manufacture of methamphetamine.

A new three year multi-entry visa programme allowing visitors from both countries to enter the other country without re-applying, is designed to make business travel easier.

"Some of the business people we've been talking to are coming every month here," Key said.

"They'll be pretty pleased about it."

Key also indicated that Li was "highly confident" that officials could resolve any issues to allow the New Zealand dollar to trade directly with China's currency, the remnimbi, meaning they will no longer have to trade via the US dollar or the euro.

"The big advantage is it cuts costs for our businesses and allows them potentially to have greater predictability on the exchange rate that they'll be converting at," Key, a former international currency trader, said.

For the dozen travelling media accompanying Key across China, a large part of the trip has been dominated by domestic issues, with the leaking of a report detailing potentially illegal spying by Government Communications Security Bureau.

Key frustrated the media this week by turning up late to press conferences following the report's official release, then insisting he had to leave because of the tight timing of the schedule, leaving only a few minutes for questioning.

However those on the delegation insist that in terms of making an impact on the trip with the Chinese it has been highly successful so far, showing the breadth of the business community and its connectedness with the Government.

The trip has seen far more signings of often vague "memorandums of understanding" than flagship deals, but officials had warned this trip has been much more about building friendships than striking deals.

One of the travelling business delegation admitted their sole reason for being on the trip was to act as "entourage".

This morning Key is due to take questions from students at Peking University, before going to the National Museum of China where the New Zealand delegation will be presented with the Maori feather cloak gifted to Chairman Mao Zedong in 1957.

The cloak will be on loan and on display at Te Papa from June.