40th Anniversary of the Establishment of New Zealand–China Diplomatic Relations

Date: 4 December 2012

Venue: Chinese Academy of Social Sciences, Beijing

Organised by: Chinese Academy of Social Sciences and New Zealand Contemporary China Research Centre. In Association with New Zealand Institute of International Affairs and National Institute of Institute of International Affairs (CASS).

Opening Ceremony

Li Xiangyang, Director General of the National Institute of International Strategy (CASS) welcomed participants and the audience to the event and opened the day’s proceedings.

The first keynote speaker was Huang Haotao, Secretary General of the Chinese Academy of Social Sciences. Prof Huang focussed on the many achievements over the past 40 years of diplomatic relations and the cooperation between the two countries, including the ‘four firsts’ and an ongoing comprehensive relationship.

The next keynote address from Neil Quigley, Deputy Vice Chancellor of Victoria University of Wellington, looked at the ongoing development of New Zealand–China relations. Prof Quigley provided background for the day’s proceedings by setting forth a series of achievements particularly focusing on the excellent bilateral economic relations, the growth of trade and investment and cooperation agreements in the broader region.

Panel One: 40 Years of Diplomatic Relations between China and New Zealand

Sir Douglas Kidd, President of the New Zealand Institute of International Affairs, greeted participants and the audience in Te Reo Māori and introduced the panel by providing his own experience of the early years of diplomatic relations and the milestones achieved since then.

The first speaker, Chen Mingming, former Chinese Ambassador to New Zealand (2001–2005), spoke of the strong and mature partnership that has been built, including the early years of developing the framework for creating an FTA negotiation and how the FTA has transformed the New Zealand–China relationship. Chen asked participants to consider where the relationship could go from here and put forward six priority areas: dairy farming; food safety; creative industries; tourism; education; partners in regional economic integration.

Former New Zealand Ambassador to China (1993–1998), Chris Elder, spoke next. Elder overviewed the very first steps in building the relationship. These included making arrangements for a presence in Beijing, informing the mission about domestic China and Chinese foreign policy, conveying New Zealand views to Beijing and finally, seeking ways to enhance trade links. Elder stressed the importance of entering a dialogue with China and the political underpinnings of the trading relationship.

Zhang Yuanyuan, Former Chinese Ambassador to New Zealand (2006–2008), spoke next on the progress of the past 40 years and the importance of the good relationship between New Zealand, a developed country, and China, a developing country. New Zealand and China enjoyed healthy state-to-state and people-to-people links as well as high level visits and a significant milestone with the New Zealand China Free Trade Agreement. Zhang talked of the unprecedented and sweeping transformation in China and the world and noted New Zealand and China can continue to work closely together in their shared desire for a peaceful and stable Asia Pacific.

The fourth speaker, Tony Browne, Former New Zealand Ambassador to China (2004–2009), provided insight into how the ‘Four Firsts’ came about. The Four Firsts refer to New Zealand being:

1. The first Western country to conclude a bilateral agreement with China on its accession to the World Trade Organisation (August 1997).
2. The first developed economy to recognise China’s status as a market economy (April 2004).
3. The first developed country to enter into Free Trade Agreement (FTA) negotiations with China (announced November 2004).
4. The first OECD country to sign a high quality, comprehensive and balanced FTA with China (April 2008).

Browne concluded with a series of observations. First, these achievements represent decisions on both sides in the interest of each party. Second, many think of these achievements as economic milestones but in reality they are first and foremost political milestones. Third, decisions on the New Zealand side were made by breaking with western consensus in the New Zealand interest. Finally, the window of opportunity to take such opportunities tends to be short.

The final speaker in the first panel, Carl Worker, New Zealand Ambassador to China, spoke of the remarkable progress in the relationship on trade and economics. Worker observed that alongside the political relationship, trade and economics are the bedrock of New Zealand–China relations, noting that this practical focus is a long-lasting strength. Worker stressed that New Zealand is enormously proud of the Free Trade Agreement and put forth some of the latest data showing the miraculous growth in trade and services in the post-FTA years. Bilateral investment was highlighted as a new emerging area with very strong growth opportunities. Worker concluded with a discussion of the launch of the New Zealand China Council and inaugural Partnership Forum in April next year and by illustrating the five key goals in the New Zealand Inc. China Strategy.

Panel Two: Security and Cooperation in Asia–Pacific between China and New Zealand

The second panel was chaired by Zhou Yunfan, Deputy Director General of the Bureau of International Cooperation (CASS).

The first speaker, Zhang Yunling, Director of the Academic Division of International Studies (CASS) asked how to rebuild economic dynamism in the Asia–Pacific and what opportunities there are for cooperation for the future of the Asia–Pacific. After outlining three stages in the evolution of the Asia–Pacific economy (1960–80; 1980–2008; 2008–current), Zhang articulated the need to restructure the economic growth engine and integration structure due to pressure to change the demand-supply relationship between the US and the West Pacific and the internal need for change in East Asia. Zhang overviewed the considerable integration efforts to date and talked on the importance of making RCEP and TPP initiatives complimentary to keep the US and China together. Zhang argued New Zealand and China share a common interest, have a successful model of an FTA between a developed and a developing country and can play an important role bridging the gap between the TPP and RCEP.

The next speaker, Clare Fearnley, Director of Asia Regional Division at the New Zealand Ministry of Foreign Affairs and Trade, talked on the evolution of regional architecture in the Asia–Pacific. Fearnley began by outlining the characteristics of regional integration and the binding and non-binding processes. After a detailed discussion of the many integration initiatives, Fearnley noted that parallel processes can be a force for constructive competition in the region, that we will likely have to live with the ‘messiness’ in the form of overlapping and gaps in coverage for some time to come and that New Zealand is comfortable with that and does not view it as a significant barrier to ongoing regional evolution.

Han Feng, Deputy Director General of the National Institute of International Strategy (CASS), situated New Zealand–China relations within China’s broader integration in the international community. After outlining the core elements of Chinese foreign policy, Han Feng summarised New Zealand foreign policy and identified complimentary areas. Potential areas of increased cooperation were discussed, including investment and social policy.

The final speaker, Marc Lanteigne, Senior Research Fellow at the New Zealand Contemporary China Research Centre overviewed the security regimes in the Asia–Pacific focusing on the process of consensus decision-making and mutual interest. Lanteigne outlined successful cooperation in the region rejecting the early concerns that regional architecture lacked binding power. US–China relations were highlighted as crucial to the region and both US and China relations with New Zealand were shown to have strengthened in recent years.

Panel Two was concluded with a series of comments from the discussants, Shi Yongming, Deputy Director of the Center for South Pacific Studies at the China Institute of International Studies and Xiaoming Huang, Director of the New Zealand Contemporary China Research Centre.

Panel Three: Social, Cultural and Education Relations between China and New Zealand

Professor Han Feng introduced the panel of speakers.

Wen Powles, Director of International Affairs at Te Papa, Museum of New Zealand, spoke first on the importance of social and cultural links in the bilateral relationship. Using a series of images, Powles illustrated cultural diplomacy and people-to-people links between China and New Zealand from the 1937 Chinese art exhibition in New Zealand to the ongoing art, music, dance, literature, film, sport and cultural links, such as, the current Pounamu and Brian Brake exhibitions from Te Papa showing at the National Museum of China in Beijing.

Liu Shusen, Director of the New Zealand Centre at Peking University then spoke on recent trends of cooperation in Sino-New Zealand higher education. The talk looked at examples of tripartite research programmes, joint bachelor programmes, joint courses and study abroad programmes.

Michael Stedman, Managing Director of Natural History New Zealand, offered his extensive experience working in China with the largest non-Chinese producer of documentaries about China in the world. Stedman’s company has worked extensively in cooperation or partnership in China and learnt the importance of making efforts to understand Chinese culture and to build long-lasting relationships. Stedman argued that there remains a considerable vacuum of China knowledge in New Zealand and that more news and current events about China need to be made available to the New Zealand public.

Two discussants commented on the presentations. Paul Clark, Professor in the School of Asian Studies at the University of Auckland, commented that when he first started travelling to China in the 1970s, Chinese people lacked knowledge about New Zealand and the world but that this has totally transformed today. New Zealand’s knowledge about China however remains low and more education and cooperation with China is needed.

Guo Chunmei of the Institute of South and Southeast Asia and Oceania Studies at the China Institutes of Contemporary International Relations, reaffirmed the important point that a strong bilateral relationship is built upon people-to-people links and therefore more cultural exchanges, scholarships and educational cooperation should be encouraged.

Panel Four: Development and Prospects of Economic, Trade and Investment Relations between China and New Zealand

Professor Xiaoming Huang introduced the final panel on economic relations.

Alan Young, Trade Commissioner of New Zealand Trade and Enterprise began the discussion by briefly presenting the latest trade statistics which show continued improvement in two-way bilateral trade. Young then focussed on the potential and early growth in the bilateral investment relationship, noting the significance of recent investments in New Zealand and China, before concluding with some timely advice for New Zealand businesses looking to enter the Chinese market.

Pei Changhong, Director General of the Institute of Economics (CASS) then presented a broad overview of the economic relationship between China and New Zealand. Pei covered all the major areas of the FTA, trade, services and investment and identified areas of future growth in bilateral economic relations.

Li Xuesong, Deputy General of the Institute of Quantitative and Technical Economics (CASS) then presented forecasts of Chinese economic growth over the next few decades. Li showed clearly how Chinese growth is likely to slow over time as the growth model transitions to more balanced development characterised by a lower reliance on export-led growth and more domestic consumption. Each of Li’s forecasts predicted growing opportunities for New Zealand exporters as China’s middle class grows and the economy shifts toward greater domestic consumption.

The final speaker, Jason Young, Research Fellow at the New Zealand Contemporary China Research Centre, spoke on the relationship between trade and investment. Young presented evidence of the rapid growth in trade but slower growth in investment and argued that investment represents a deeper level of economic integration between China and New Zealand that will take some time to develop. Young argued the challenge for the next 40 years of diplomatic relations is to build a sustainable investment relationship to support the strong trading relationship.

Three discussants put forward views on the panel’s papers.

Rodney Jones, Principal at Wigram Capital Advisors noted the remarkable disappearance of the trade deficit for New Zealand over the four years since the signing of the FTA and asked how New Zealand can maintain its relevance in China considering the relative size of each economy.

Ma Tao, Associate Professor at the Institute of World Economics and Politics (CASS) provided a series of examples of successful two-way investment. Ma argued we are likely to see more Chinese investment in New Zealand in light of the state encouraging enterprises to ‘go abroad’ and that the Chinese Government welcomes investment in Chinese agriculture to help Chinese agricultural development.

Ding Dou, Associate Professor at the School of International Studies at Peking University, noted that the special feature of New Zealand–China relations is the FTA which provides momentum for trade and investment growth. Ding concluded by arguing the growth of China provides both opportunities for New Zealand as well as challenges.

Conclusion

Tony Browne introduced the final two speakers and thanked the participants and audience for their contributions.

Brian Lynch, Director of the New Zealand Institute of International Affairs (2003–2012) summarised the day’s discussions by stating the overarching theme was that even distance and political and social differences are no barrier to building a strong and enduring relationship but that there is more work to be done in the future.

Zhang Yunling commented on how good relations have been in the past and how they will probably improve even more in the future. Zhang focussed on the changing nature of the relationship, in particular the opportunities to cooperate in regional affairs and the importance of New Zealand as an example of a western country dealing with a rising power. Zhang concluded he was confident about China’s future and the future of New Zealand–China relations.