China seen as key to growth

BROOKE GARDINER
Last updated 05:00 18/07/2012

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Local authorities throughout New Zealand are being urged to recognise the importance of China, which holds the key to future growth and prosperity, according to former Victoria premier John Brumby.

Speaking at the Local Government New Zealand annual conference in Queenstown yesterday, Mr Brumby told delegates China would offer New Zealand the most lucrative prospects of the future.

Partnerships in the "Asian century" would be very important for New Zealand and Australia, he said. The traditional "heavy hitters" of education and tourism would remain at the core of what New Zealand and Australia had to offer Asia, but Mr Brumby said there was now growing potential in other sectors, including in research and development.

The growth rate of China's annual spend in the research and development sector was "quite profound" and would inevitably see China catch up to the spending levels of the United States.

"It's the biggest increase in R and D spending in the history of the world."

Mr Brumby also predicted an increase in Chinese overseas investments, citing the relatively low $50 billion it had invested in Australia, as the world's second-largest economy, compared with the $500b invested by the world's biggest economy, the US.

The World Bank had predicted a "Global Middle Class" of 3 billion people by 2020, most of whom would live in Asia, creating a significant opportunity for Australia and New Zealand to create "mutually beneficial" partnerships, he said.

Adding weight to this, Mr Brumby told the conference he had recently visited Boeing and was told 75 to 80 per cent of future orders for aircraft were expected to be from the Asia-Pacific area.

"There are some great opportunities created for local governments in New Zealand by the changing world."

With more than 20 years' experience as a leader in public service, Mr Brumby said he had always been a firm believer that all levels of government could work together to achieve better outcomes and hoped that would be the case in New Zealand.

"The wellbeing of Victoria and New Zealand lies in growing our whole economies and not just the big cities."

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- © Fairfax NZ News

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