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Trade agreements bring Oceania closer to China

Hu Yongqi
Updated: May 9,2016 9:46 AM     China Daily

Recent visits to China by top leaders from Australia and New Zealand could be seen as indications of those countries striving for a larger share of the Chinese market in agricultural goods, animal husbandry and tourism, experts said.

Last month, New Zealand Prime Minister John Key made his sixth visit to China, just one week after Australian Prime Minister Malcolm Turnbull’s trip to Beijing.

Both prime ministers had similar agendas: meeting Premier Li Keqiang, signing agreements to boost cooperation in education and other fields, and helping delegations of businessmen from back home find opportunities to work with Chinese companies and increase profits.

Australia and New Zealand, geographically part of Oceania, have been active participants in regional affairs in Asia.

More than 10 years ago, Football Federation Australia joined The Asian Football Confederation, and Wellington has been trying to do likewise for years.

Both countries export dairy and woollen goods to China, which has a large manufacturing sector but is in urgent need of high-quality agricultural and animal husbandry products, said Chen Fengying, a global economy researcher at the China Institute of Contemporary International Relations.

“The two countries can complement China’s weaknesses in agriculture and animal husbandry, but their similarity in industrial structure has also pushed them to work for a closer partnership with the world’s second-largest economy,” Chen said.

Both countries have been among China’s key partners in the Asia-Pacific region, with their free-trade agreements setting the benchmark.

In 2008, New Zealand became the first developed country to sign an FTA with China, which now has signed similar agreements with 14 countries. In comparison, it took 10 years of negotiations for China to sign an FTA with Australia last June, which took effect in December.

Chen said the China-New Zealand FTA put pressure on Australia, which may have approved an FTA with China to prevent a decline in its exports of woollen and dairy products.

New Zealand exports make up 70 percent of China’s dairy imports, and China now stands to benefit from the Australian FTA by getting cheaper products, said Tu Xinquan, a researcher in global trade at the University of International Business and Economics.

However, the recent agreement with Canberra includes additional sectors, such as infrastructure, energy and services, which is likely to mean many more business opportunities for Australia. Meanwhile, Australia’s agricultural goods, such as rice, wheat, wool and cotton, will not be levied with tariffs, which was the driver that led New Zealand’s enthusiasm to upgrade its FTA with China.

On May 3 in Wellington, John Key called on China to broaden the China-New Zealand FTA, which was signed in April 2008 and took effect six months later, to further reduce tariffs and expand bilateral trade.

Tourism is another key area of competition between the Oceania countries. Australia received 1 million tourists from China last year, while the number of Chinese people spending their holidays in New Zealand rose by 35 percent in 2015 year-on-year.

Turnbull said in January that Australia will streamline its visa application process for Chinese visitors, and it issued its first 10-year multi-entry visa this year. Chinese will also be an acceptable alternative language for Chinese applicants.

New Zealand has not yet announced such incentives, but experts said the nation may come up with similar ones soon.

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