A week in the Middle Kingdom: Six Chinese takeaways

Sunday, 19 October 2025

ANALYSIS: As China asserts itself more forcefully against the US - just this month, for example, tightening its grip further on rare earth minerals and courting more Trump fury - the screeds written and broadcast about its motivations and intentions have turned into a veritable firehose.

It can be illustrative to spend time in the country to see for oneself what’s going on and assess the mood of the nation, to the extent one can do so in such a vast land and over such a short period. It was with this aim in mind that in September, the Sunday Star-Times along with other media visited China courtesy of the New Zealand China Council based in Auckland, and the Chinese People’s Institute of Foreign Affairs, a body conducting diplomacy on behalf of the Chinese government.

The trip was a government-sponsored trip and therefore the caveats around a particular point of view advanced by the Chinese participants in the visit are in place (to be fair, anyone visiting any country courtesy of its government would be shown the best bits). However, there were six things that really stood out from the visit that illustrate just how China is positioning to lead, if not dominate, a world in which AI and robots are central players, semi-free trade remains critically important and green tech adoption accelerates.

And cream cheese is plonked on top of every drink possible.

1. Pilot Free Trade Zones are a careful but potentially game-changing innovation found all over China

Most countries moved decisively in the direction of free trade with the rest of the world over two decades, and now seem to be trying to retrench from that direction.

In China, the direction is the opposite - to a degree. In its 14th five-year plan, from 2021-2025, China has gone from a relatively closed economy to a more open one, expanding its network of “pilot free trade zones”, with now 22 of these zones around the country. These areas are designed to experiment with reforms in areas like trade, investment, finance and government services to drive foreign businesses to establish themselves in the country.

In Beijing, we visited the “Two Zones” exhibition hall, (the Chinese sure do love their exhibition halls), outlining the achievements of the China (Beijing) Pilot Free Trade Zone (FTZ) and the Zhongguancun Science Park. The former attracts scientific and technological innovation, international business services and high-end industries. Zhongguancun Science Park, meanwhile, is often referred to as the “Silicon Valley of China”.

New Zealand companies wanting to access the Chinese consumer, but perhaps put off by the seemingly arcane and highly regulated way businesses have to operate in the country, may do well to study the options presented by these zones. They offer things like duty-free imports for goods finished within them, accelerated customs clearance, and reduced foreign investment restrictions - like value-added telecom services, where China has lifted its 50% foreign ownership cap in certain FTZs. There is also a 15% corporate income tax rate for companies in advanced sectors - things the Chinese are heavily focused on, such as AI, robotics, high-end manufacturing and biomedicine.

The speed of the development of these zones is something to behold.

Lin-gang, a “smart city” 75 km from the centre of Shanghai, houses Tesla’s Chinese manufacturing hub and has grown from very little in a matter of years as it aims to attract foreign and domestic talent to build a high-tech innovation hub within a more liveable, technically advanced city. It is in the Shanghai pilot Free Trade Zone (FTZ), which also includes the Yangshan Free Trade Port Area. That is the world’s largest automated container terminal, attached to the mainland by a 40km bridge to Yangshan Island, and is the busiest container port in the world, handling more than 50 million TEU (20-foot equivalent units, or shipping containers) each year. It is surrounded by hundreds of wind turbines comprising the Donghai Bridge Offshore Wind Farm.

To attract foreign business to go through this port, it offers things like reduced customs clearance times and consolidation of paperwork. The port’s success is part of the reason the Chinese consumer market for goods has greatly expanded in the past few years.

In 2024, the 22 FTZs attracted US$28.25 billion of foreign direct investment (FDI), accounting for about a quarter of China’s FDI. It’s all of part of what President Xi Jinping called “high level opening up”. However, there are also areas that remain completely or mostly out of bounds for foreign investment and are not to be found in the country’s FTZs: printing of publications, social survey services, fishing within China’s territorial waters and performing arts among them.

2. Cream cheese is HUGE

Most New Zealanders probably think of cream cheese as something that goes into dips and cheesecakes on the odd occasion. But for Chinese people, cream cheese is multi-purpose, and can go on drinks - including beer and tea - and almost anything else. And its popularity has proven a major boon to Fonterra, Tatua and other Kiwi dairy firms operating in the country.

Fonterra’s plant in Darfield, Canterbury, produces 100 tonnes of the stuff each day, destined for China in 20kg cardboard cartons. It can not keep up with demand. Tatua is another that is in on the action, supplying the hugely popular market for drinks like cream cheese tea macchiato. It also produces huge amounts of sour cream, crème fraîche, mascarpone and whipping cream for China’s speciality foods sector.

While China’s dairy market is valued at 500 billion yuan (NZ$123b) and is characterised by stalling consumer demand and a domestic oversupply, there is still a lucrative niche for New Zealand dairy at the premium end of the market, and in the innovative dairy products end of things. As above, this is especially so in catering, which is a 5.6 trillion yuan ($1.4 trillion) business, and ready-to-drink tea, a 350 billion yuan (NZ$86b) market.

3. The rise of the Robot Nation

According to an article in the New York Times recently, factories in China have installed more than 150,000 robots across its workforce each year since 2017, with half a million deployed last year; more robots work in China than in the rest of the world combined, and even the usually sceptical US media proclaim China to be on the cusp of a robotics revolution.

Robots are seen as an answer to shortages in the country’s labour force and a way of counteracting its rapidly declining birth rate while maintaining economic primacy in the world. But there are also real concerns that people stand to be put out of work because of the adoption of the technology.

Social stability, including as much employment as possible, is perhaps the most critical driver for the Chinese government in all its actions, however over-reaching we may judge the country’s methods for maintaining that.

We visited Beijing’s Robot Industrial Park where the robots are not the type transforming Chinese manufacturing but other, more consumer-facing applications - robots that play chess, make coffee, look like Albert Einstein and can recount his theory of relativity, and play soccer. They are probably more impressive prototypes than seriously out-to-replace human models. But given the wider park is 250,000m² and houses 100 robotics companies, with hundreds of researchers hard at work each day coming up with new applications, one can quite easily see where this industry, and China as a whole, is heading.

4. China bets big on AI

China’s strategy is to become a global leader in AI by 2030, gunning for an AI industry worth US$100b, and creating $1 trillion of additional value in other industries. And it has ambitions not only for the development of AI and its applications, but it also hopes to lead the way in developing legislative guardrails around AI use for the entire world to possibly adopt.

Nvidia’s Jensen Huang just last week described China’s AI development as not really that far behind the US, suggesting America would need a “nuanced strategy” to remain on “higher ground”. A few things might even give China the edge, he said, including the fact China far exceeds the US in energy production, a big requirement for the data centres that power AI. In addition, China holds 50% of the world’s AI researchers and 30% of the technology market, Huang told CNBC.

Again, we were shown the consumer-friendly side of AI applications with a visit to Shanghai Foundation Model Innovation Centre, where its product experience store featured items such as AI-powered glasses that translate the speech of someone talking to you, guitars that use AI to teach you how to play, and AI-powered pets to cure loneliness. People can buy these products and use them at home. President Xi visited the same store in April, where he said 'AI is a nascent industry, and it's also an industry that belongs to young people”.

5. Beijing's Green Power Play

There seems to be a genuine desire to reverse years of pollution in China, and nowhere is this more evident than in Beijing. Twenty years ago, when I first visited the city, I lost my voice and spent a few days in bed, my asthmatic lungs unable to take the smog. This time around, for the most part, the skies are clear. The World Economic Forum has said the Chinese capital has cut fine particle pollution by 64% and sulphur dioxide by 89% since 2013 in the city with a “coal to gas” campaign that’s reduced coal combustion by 11 million tonnes in that time.

There is an evident pride in the country’s efforts on pollution, as well as its huge and very evident leaps in green tech. Of course, this sits alongside the fact China remains the world’s largest greenhouse gas emitter.

There are plans afoot to change that. Since 2022, China has committed more than US$210b to green tech manufacturing projects - providing the funding to almost 90% of all of these projects globally. In 461 projects across 53 countries, batteries, electric vehicles, charging infrastructure, green hydrogen, solar panels and wind turbines have been funded, with the hardware almost entirely made in China as well.

In 2024, approximately 35% of China's electricity was generated from renewable sources.

However, it is also true that what China may consider a green energy project may not be considered so in New Zealand, and this became evident on our trip to the Nanshan Ecological Park waste-to-energy park in Shenzhen. The city of 20 million people is aiming for a “waste-free city”, and the waste-to-energy plant incinerates a large proportion of the city’s waste - some 2300 tonnes of it, generating more than 300 million kWh of electricity annually.

But waste-to-energy (WTE) plants are controversial, even in China itself, because while they reduce waste volumes and generate electricity, they also produce pollutants and release significant carbon dioxide, and, some critics believe, create a market for waste that discourages waste reduction efforts.

Shenzhen has taken steps to try and reduce emissions from the plant but there have still been “public protests and resistance” to it, according to reports in foreign energy media.

Nevertheless, there are 300 such plants around China. In New Zealand, plans to introduce these plants have been stymied by public opposition.

6. Tightening control of journalists, particularly from the US

Part of our visit to China saw us meet with foreign journalists from the large news agencies in Beijing and Shanghai to hear, “off the record”, about what it is like to operate as a journalist in China.

There were few US journalists in attendance, as they had been booted from the country in the past few years in a stoush dating back to Covid and their work in detailing the origins of the pandemic. Large English-language agencies tend to employ Canadians and Brits to the China round, as they have fewer visa hassles and can leave and re-enter the country more easily.

There is no question that it is difficult to operate as a journalist in China, although work destined for a foreign market appears to have slightly less focus on it than China’s own journalists writing for a domestic market, some of whom face imprisonment for writing things their government dislikes.

The foreign correspondents we met were therefore a plucky bunch who understood the fine line they were treading, but nevertheless pursued insightful coverage despite the restrictions - for example, negotiating around the all-seeing eye of a government person appointed to sit within all major news agencies. Some rounds were easier - green energy and minerals rounds, for example, had fewer restrictions and difficulties than anyone looking at corruption or assessing government policy on locals.

Overall, censorship is wide-ranging. Common search engines and foreign news sites can be almost impossible to access, and WeChat, the “super app” used by over one billion Chinese for everything from purchasing to connecting to scheduling doctors appointments, censors private and public conversations by banning words linked to Tiananmen Square and Tibet, for example.

Certainly there is an increasing level of control and censorship held over both the media and social media since Xi Jinping came to power in 2012.

Chinese officials fumed to us about US journalists and commentators writing biased material about the country in stories dispersed around the world. But on the other hand, if US journalists are effectively barred from China, that is a move hardly like to aid the mutual cultural understanding China says it is eager to foster.

Dita De Boni travelled to China courtesy of the New Zealand China Council based in Auckland, and the Chinese People’s Institute of Foreign Affairs, a body conducting diplomacy on behalf of the Chinese government.