New Zealand businesses should have a China strategy whether or not they are doing business there, says Kiwibank chairman and former Hong Kong based investment banker Rob Morrison.
He said a fellow banker had once described China's power in simple terms that "Whatever China produces will go down in price and whatever it consumes will go up in price."
And that was roughly true.
"Whether or not you are investing in China you have to have a China stratgey because China is a key variable in pricing of almost anything," he said yesterday.
Morrison was speaking at a symposium in Wellington hosted by Victoria University and the NZ China Council to mark the 40th anniversary of diplomatic relations with China.
He also said that New Zealand was not paying enough attention to the real drivers of growth in China - the unprecedented level of urbanisation of the population of 1.3 billion.
In the 1980s, less than 20 per cent of people in China lived in urban areas. Now it is 47 per cent; under the 12th five-year plan ratified last year it is projected to rise to 51.5 per cent by 2015 and 80 per cent by 2050.
"That is an unbelievable shift and the world has never seen it before and that throws up enormous issues in terms of consumption, pollution, water usage and so on.
"From New Zealand's point of view, you have to understand that if you're going to do business in China.
"You also have to understand it if you are not doing business in China because that will be the single biggest in terms of growth globally.
"New Zealand needs to understand it and we don't spend enough time strategising about that future."