Tony Alexander

Economic Commentaries

Opening Doors to China

Wednesday July 31st 2013

Observations from NZTE Trade Commissioner in Hong Kong, Kevin Parish.

New Zealand is in the enviable position of having free trade agreements with China, Hong Kong and Chinese Taipei. In horse racing terms this would give New Zealand the Greater China Trifecta – with hopefully similar economic benefits.

Leaders bridging the gap between both countries from the public and private sectors will be crucial in ensuring New Zealand achieves the potential of these agreements.

In April, the Prime Minister led one of the largest ever trade missions to China with delegates looking to better understand this complex market, but more importantly leverage the excellent relationship the PM has with his Chinese counterparts. And since 2008, when New Zealand was the first OECD country to sign a comprehensive FTA with China, numerous political leaders from China have visited New Zealand.

New Zealand has also established the New Zealand China Council, which is mandated to bring together leading New Zealanders from both public and private sectors to collaborate and ensure that the relationship reaches its potential. The leadership in this organisation is exceptional with Sir Don McKinnon as Chairman and a range of senior business leaders on the executive board.

The political relationship we enjoy needs to (and, in some cases, already does) cascade down to the companies that are either doing significant business in China or those that see China as a future growth market. This means having senior management, including the chairman and board, visiting the market regularly to hold discussions with the senior executives of their Chinese partners. This will lead to a ‘leadership bridge’ – a place where the exchange of ideas, philosophies, deeper relationships and future growth can occur.

Many of our companies, including Comvita, Fonterra and Mainfreight have committed senior staff to China – they understand the importance of having a strong senior presence in market. Recently, Westland Milk Products hosted customers in Shanghai and the Chairman, two directors, the CEO and several senior managers travelled to China to attend.

For those without that capability, having senior people visit the market will demonstrate commitment to Chinese partners. In the Chinese business world, the chairman and the board are integral parts of companies’ management structure.

Companies can also take a leaf out of Maori and Chinese cultures, and take a long-term approach to leadership by identifying the ‘rising stars’ in business and preparing a plan to get them exposed to the China market earlier. These ‘rising stars’ could be involved in trade missions, business trips, hosting Chinese partners in New Zealand and being seconded to the market. NZTE’s China Business Training is a good starting point for rising stars, with over 1000 people from 635 companies having attended in the last three years.

Language training is another consideration, and Trade Minister Tim Groser recently highlighted that language was important for all companies undertaking business in China.

We could also learn from author Malcolm Gladwell and start to identify more ‘connectors’ who know a large volume of people across cultural, economic and political circles, but with the added skill that they can transcend cultural and geographic boundaries. Where do we find such people? One often overlooked place is…New Zealand.  Last year, 24,412 Chinese students were studying in New Zealand. Many of these students embrace the Kiwi culture during their time in the country and have a good understanding of our unique characteristics.  Another group is Kiwis who have embraced the Chinese way of life and made China their home, and they can be identified through KEA, LinkedIn and University Alumni associations.

To fully maximise the economic opportunity in front of us, New Zealand must bridge the leadership gap at all levels and embrace the cultural and social aspects of doing business in China. Only then will this lead us to fully understand, comprehend and succeed in our relationship with China.