Opening Doors to China : New Zealand's 2015 Vision - Te Puni Kokiri

24 Opening Doors to ChinaOpening Doors to China 25Tourism: grow tourism servicesby at least 60 percentChina is our fastest growing and fourth largestinternational visitor market. Chinese havetraditionally holidayed in New Zealand aspart of a tour group under China’s ApprovedDestination Status (ADS) system. However,there has been an increase in the numberof independent and semi-independentholidaymakers. The focus is on ensuring thequality of tour group travel and motivatingindependent or small-group Chinese travellersto visit New Zealand.Air New Zealand has direct flights fromShanghai and Beijing but there are capacityconstraints through other Asian hubs,especially during the peak summer period.Direct flights from Guangzhou by ChinaSouthern Airlines started in April 2011 andin November 2011 it moved to daily flights,bringing greater stability to air connections.On current growth projections, a new airservices agreement will be needed within thenext year to allow further expansion of services.Aviation talks will take place this year.New Zealand welcomed 141,000 Chinesevisitors in the year to November 2011. In the2010 calendar year, Chinese visitors madean economic contribution of $362 million.The goal is to grow this figure by 60 percent.The growth in visitors from China hasbeen significant in recent years. In the yearending November 2011, 141,000 travellersfrom China visited New Zealand. Averageannual growth of 8.4 percent is forecastbetween 2010 and 2016, increasing visitorarrivals to around 180,000 per year.Tourism New ZealandHow will we achieve these tourism goals?Tourism New Zealand and otheragencies will develop the brand to tellthe New Zealand story for specific keysectors in China, and will invest furtherin in-market promotion to supportairlines investment in new services.Meanwhile, Immigration New Zealand’sShanghai-based service, one of its fourChina operations, has expanded andhas an outsourcing agreement for thelodgement of applications.Other servicesChina is maturing as a market for New Zealandideas and skills, as well as goods. The followingareas all have significant potential to grow:design and architecture; water management;film and television company production;green engineering; entertainment, includingadvertising; IT and educational resources.How will we achieve these service goals?Improved statistics on services trade wouldcapture a more accurate picture of the growth inthese areas and help identify possible areas forincreased service liberalisation under the FTA.4Increase bilateral investment tolevels that reflect the growingcommercial relationship with ChinaBilateral investment flows relative to bilateraltrade volumes are low. There are a number ofreasons for this: Chinese investors and businessesare unaware of New Zealand opportunities; theNew Zealand deal size is relatively small for majorChinese investors; outward Chinese investmentis subject to strict controls; and New Zealandinvestors are inexperienced in Chinese markets.New Zealand would benefit from increasedForeign Direct Investment (FDI) from China,and Outward Direct Investment (ODI) intoChina. It would serve our country well if levelsof bilateral investment reflected our countries’growing commercial relationship.Inward investmentIt is estimated China invested approximatelyUS$60 billion internationally in 2010/11. TotalChinese investment stock in New Zealand is$1.87 billion; the comparative figure of FDIfrom Australia is $100 billion. Avenues forCommunications in CHINAMOBILE PHONE USERSINTERNET USERS WITH BROADBAND ACCESSTELEPHONE CONNECTIONSSource: China's Ministry of Industry and Information Technology (2011).increasing investment in New Zealand includeChinese state-owned enterprises, which couldprovide investment capital for strategic resourcedevelopment and infrastructure funding. Majoroutward FDI bids from Chinese firms are subjectto Chinese government vetting. Private Chineseinvestors are showing increased interest in certainsectors of the New Zealand economy. Sectors ofdemonstrated or possible interest include food andbeverage, natural resources, cleantech, high-valuemanufacturing, IT, and infrastructure. Significantrecent investment by Chinese firms includesBright Foods (in Synlait), Haier (F&P Appliances)and Agria (PGG Wrightson).Policy settingsAcquisition by foreign investors of New Zealandfarming assets is a sensitive issue for some.Over the last five years, sales of land to Chineseinvestors have been less than 1 percent of totalsales to overseas investors. The Government hasundertaken a review of the Overseas InvestmentAct to improve its operation and effectiveness.Officials are working on a detailed policyframework to assist in targeting, attracting952 MILLION150 MILLION288 MILLION