At the China Business Summit, money did the talking

Tuesday, 22 July 2025

ANALYSIS: It was money that spoke loudest at the China Business Summit in Auckland last Friday.

China is where New Zealand Inc’s growth future lies, the true believers from the likes of Air New Zealand, University of Auckland, Zespri, Fonterra and Silver Fern Farms felt.

And that left New Zealand with no choice but to navigate the choppy waters of antagonism between China, our largest trading partner, and the United States, our most powerful military ally.

It was not a forum in which anyone was pushing the idea of a strategic diversification by building up trade with other places like India as an insurance policy against things kicking off between China and the US.

China was paying most for our products like red meat, dairy and kiwifruit, and it would win the trade war with the US.

“It’s pretty clear the next China is China,” said Mark Tanner from the research company China Skinny.

“China is so far ahead of every other country on everything,” said Nick Mowbray, chief executive of Zuru, which manufactures in China.

“China is unstoppable,” he said.

And where it was not leading, such as on artificial intelligence (AI) and computer chips, it soon would be, he said.

Summit delegates were told by Pulizer Prize-winning journalist Andy Brown that China was winning the trade war with the US, though he expected President Donald Trump to declare victory later this year.

China would win the AI race too, churning out patents at twice the rate of the US and rapidly expanding its power supply, which energy-hungry AI needed.

It already had an insurmountable lead in electric vehicles, clean tech and nowhere in the world could touch it for manufacturing prowess.

If New Zealand and its companies wanted to focus on diversifying trade, it should be within China, into so-called second and third-tier cities.

The summit was not a place for naysayers.

Prime Minister Christopher Luxon, fresh from a trip to China in June, did not rock any boats.

“We can have great relationships with China and with the US at the same time,” he said. “We’ll continue to advance our own interests. Our own interests are economic security.”

He wanted exports doubled.

“China is a vital part of New Zealand's economic story, and it is a key part in our pursuit of growth, resilience and opportunity,” he said.

Annual two-way trade now topped $39 billion, and more than 20% of New Zealand’s exports went to China, he said. That represented only 0.3% of China’s total imports.

“If you get it from 0.3% to 0.4%, you’ve actually grown our business at 25%,” Luxon said.

China was New Zealand’s major source of foreign students. It was our third-largest supplier of tourists, who were the highest-spending visitors.

Chinese ambassador Wang Xiaolong delivered a lecture on the greatness of China and its positive role as a global citizen in a world that was inexorably moving towards no single power dominating.

“China's development has not been achieved at the expense of others,” he said. “It has occurred both as a result of and as a contribution to increased global prosperity, creating opportunities in that process for common development around expanding the frontiers of human progress, and offering China solutions to the global challenges such as climate change.

“In this sense, for any nation, decoupling from China is giving up on one third of global growth opportunities on nearly half of the world's innovations and on access to critical resources and capabilities needed for addressing common challenges,” he said.

He stressed the clear lesson from the half-century positive relationship between China and New Zealand, which was the first country to sign a free trade agreement with China.

This was: “mutual respect, especially for each other’s sovereignty, independence, and internal affairs and territorial integrity”.

The closest the prime minister got to saying anything about Taiwan (which China says is part of China, and which New Zealand does not recognise as a country in its own right) was to say: “Where we have differences with China, we'll always promote and protect New Zealand's interests through engagement and through dialogue.”

China was a diplomatic priority.

“In the second half of this year, you'll see more of my ministers travelling to China to promote our education, tourism and trade interests and to continue to deepen the relationship at the top to top level,” Luxon said.

Warren Hu, the surprisingly funny chief executive of Bank of China New Zealand, urged politicians to emulate Singapore, which he said had the smartest government in the world.

“Singapore is the best friend of the US and the best friend of China,” he said.

For Fonterra, Zespri, and Silver Fern farms, China meant 500 million discerning middle class consumers who trusted New Zealand to produce high-quality, safe food and drinks.

China’s population was ageing, the summit heard, and the middle classes were focused on ageing well. Chinese people “self-medicated” with food, using it as a form of medicine. New Zealand could help with that. These were consumers that cared about sustainability and wanted grass-fed food. They wanted a green story.

“There's 1.4 billion consumers there, but within that we see there's about 315 million premium red meat consumers, and within that we see about 150 million consumers that care about the ethical sustainable attributes around it,” said Dan Boulton, chief executive of Silver Fern Farms.

Richard Allen, head of Fonterra’s ingredients business, said Chinese consumption was shifting from drinking the dairy to eating the dairy.

China’s Healthy China 2030 Plan recommended an increase in dairy nutrition from 300g to 500g a day for an adult, he said.

“That alone has the potential to increase Chinese dairy consumption by 700,000 tonnes by 2030,” he said.

Doing business in China was a rush and a challenge. “China Speed” was the phrase of the day.

Karyna Young, chief executive of New Zealand success story EnPot, whose technology is reducing the carbon footprint of aluminium production, said in most of the world “nothing happens quickly in the aluminium”.

“Then you enter China,” she said, which has half of the world’s 230 aluminium smelters.

It was working with Weiqiao, one of China’s aluminium giants.

“Their internal joke is there is China speed, and then there is Weiqioa speed,” Young said.

Businesses exporting to China have to be ready to adapt their strategy quickly, she said.

“The conversations are coming at China pace and we are ready to move with those partners at China pace,” she said.

Mowbray used the summit to showcase Zuru’s move into factory-built housing, and its successful move to take on Kinder Surprise chocolate eggs with cheaper, larger, “Gumi Yum” gummy eggs.

China’s manufacturing prowess and automation was unmatched, he said.

He showed videos of Zuru factories in China. They were so highly-automated there was hardly a human to be seen.

“You really can’t do this anywhere else in the world without the core expertise of automation software engineers that were built in in China,” Mowbray said.

All was not well in China though.

Youth unemployment was high. The Chinese residential property market continued to fall. These were weighing on consumers’ willingness to spend.

Economist Raymond Yeung told the summit: “Our forecast is at least another 18 months, maybe 24 months for the contraction of the Chinese property market to touch zero again and return positive.”

But even this was part of a long-game being played by the Chinese Communist Party.

“That sounds bad,” Yeung said. “But that's a national strategy to change the country from a property-led economy to a renewable energy-led economy and tech-led economy.”

Xiaolong called the Chinese Communist Party “definitively the largest and arguably the most successful political organisation in human history”.

Not a squeak of criticism was heard.

A chart by Chinese AI expert, Liang Zheng, showed dates for the eras of Chinese academic and technological development. It stretched back seemingly unbroken to just before the turn of the 20th century.

It did not show the era of China’s Cultural Revolution, during which many teachers and professors were killed.

The summit saw research that showed the Chinese felt warmly towards New Zealand.

New Zealand stood 14th in the Chinese consumer’s country perception, which was not bad for a country that had a population smaller than any of the largest 18 Chinese cities. They recognised New Zealand as a place of beauty, where the environment was clean and a priority for people.

But, said former comedian David Downs from The New Zealand Story, they viewed New Zealanders as lacking ambition, and prioritising lifestyle over hard work. We were a long way off China speed.

New Zealand was also missing some tricks, summit delegates were told.

Bank of China’s Hu had been at the Government’s Infrastructure Summit in March. Not a single Chinese infrastructure company had been invited, despite China being the world’s “infrastructure monster”.

The Chinese felt misunderstood and unloved, by other countries, Downs said.

Hu said: “I found in New Zealand, if you want to involve some Chinese company in infrastructure project, it's a sensitive topic. People will talk about national security. I do think it's bullshit. So If the Chinese company built the highway, can they move the highway away to China? No.”

New Zealand had a huge infrastructure deficit, which could be seen and felt in Auckland, he said. Chinese money and expertise could help, he said.