PM to meet Xi again while on four-day trip to China

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Prime Minister John Key will today again meet the Chinese vice-president involved in an incident outside Parliament.

Mr Key will arrive in Beijing this morning after three days in the South Korean capital, Seoul. He said highlights of his four days in China would be meeting Chinese Premier Wen Jiabao and a visit to the Shanghai Expo for New Zealand's national day at the event, on Friday.

He will also attend a meeting tonight, and then a banquet, with Vice-President Xi Jinping. Mr Xi's visit to New Zealand last month became controversial when there was a scuffle after Green Party co-leader Russel Norman protested metres away from him.

Mr Key tendered an apology to Mr Xi over the incident. He said yesterday that there was "enormous potential" still for New Zealand to increase its trade into China.

"So I want to use those discussions to dominate how we can grow the relationship even further and expand on that $10 billion worth of two-way trade ... We are thinking that they might grow between 8 and 10 per cent this year alone, so there is a lot of potential in China."

Some analysts have suggested China's rapid growth puts it at risk of a "boom to bust" scenario.

Mr Key acknowledged there had been "some talk about a housing bubble in China" and he had discussed this with Mr Xi when he visited New Zealand. "He is confident the Central Bank of China is on top of that issue, but I think we all recognise that when you get fast growth, you can get fast inflation and over-inflated prices."

Mr Key left Korea upbeat about prospects for reviving talks for a free trade agreement. On Monday, he held protracted talks with President Lee Myung-bak, which he said were dominated by debate over the deal. Yesterday, he departed from his notes in a speech to the Korea-NZ Business Roundtable to say a deal was "within touching distance".

"I know that President Lee, along with myself, is 100 per cent committed to ensuring an FTA is concluded on terms favourable to both countries." He told reporters the top-level talks had given "fresh legs" to the debate between officials, which would start again after the two countries' trade ministers assembled for talks.

- © Fairfax NZ News