Fran O'Sullivan: Key pushes business message

Prime Minister John Key enlisted the support of the "Gang of Seven" to send China a strong message: "New Zealand wants to do business."

The seven New Zealand business leaders who flanked Key when he called on Chinese President Hu Jintao at the Great Hall of the People in Beijing yesterday were well chosen.

Each man leads enterprises with substantial interests in China which they plan to strengthen by leveraging the Prime Minister's official visit to impress their top-level Chinese business contacts at the select soirees where Key will expand on his plans for New Zealand's economic development.

The group includes Fonterra chairman Henry van der Heyden, Glidepath chairman Sir Kenneth Stevens (who championed Export Year 2007), Air New Zealand CEO Rob Fyfe, Beca Group chairman Robert Durrant, Solid Energy CEO Don Elder, Zespri chairman John Loughlin and Fomana Capital CEO Wayne Mulligan.

The delegation has deliberately been kept small so that the senior business players could be invited into the high-level meetings and thus directly get the measure of the powerful Chinese leaders who effectively control the business environment in China.

This is particularly important for van der Heyden, who must ultimately make a judgment call on when Fonterra should reinvest large again in China after being so comprehensively burned by the tainted milk scandal at its now bankrupt Sanlu joint venture.

Fonterra's chairman will want to feel assured that the Chinese leadership does not bear his company any ill-will over the disaster - a message that has already been conveyed to the New Zealand Government through diplomatic channels but carries much more weight if it comes directly from Hu, Premier Wen Jiabao or their senior ministers.

Fonterra has put a lot of effort into a series of briefings this week, taking reporters to inspect its model dairy farm and publicising its work on corporate social responsibility to make some amends for the Sanlu affair.

But others like Air NZ's Fyfe and Solid Energy's Elder will also be seeking insights into when and how the Chinese economic recovery will pick up speed leading to an increase in Chinese tourist numbers or demand for coal to fuel energy plants.

The business leaders make no secret that they find Key a more simpatico personality than his predecessor when it comes to understanding the potential opportunities available to New Zealand companies in China and elsewhere in Asia.

Which is not to denigrate Helen Clark's achievement in gaining for New Zealand the free trade deal which has created a platform for business expansion in China - just to observe that Key is more focused on driving up business itself.

The symbolism of having such a strong business presence was not lost on the top Chinese either, given the number of business leaders present at yesterday's meeting with Hu - they outnumbered the officials in Key's entourage by two to one.

The Chinese leaders know this game well. On their "shopping excursions" to South America, Africa and elsewhere, Hu and Wen have frequently been accompanied by representatives of China's top companies as they seek to leverage their leaders' presence to square away resource deals.

Helen Clark was a known quantity to the two top Chinese leaders, President Hu and Premier Wen. They respected her political prowess in international forums and the fact that she went out on a limb by affirming China as a market economy well ahead of other Western nations in order to secure the FTA.

Key is probably more of a pragmatist than Clark.

But the mere fact that he had a successful business career before entering national politics makes him a well-understood player in Asia where many political leaders have business backgrounds: South Korea's Lee Myung-bak and Singapore's Lee Hsien are the standout examples.

This atmosphere on this trip is very different from last April when a 200-strong business mission accompanied Clark to the Great Hall to witness the historic signing of the first bilateral free trade agreement that China had reached with a developed Western country.

The FTA is not centre-stage this year although Key will note in his formal speeches its critical importance as an economic bedrock for the bilateral relationship.

The detail will be put to one side until Trade Minister Tim Groser travels to Beijing this year.

Last year Clark had to put up with sandbagging by her Foreign Minister, Winston Peters. Now the atmosphere is pure business.

Key is simply pointing out that his Government wants to leverage the FTA to drive a much deeper strategic integration between New Zealand and China.

Despite the impact of the international financial crisis trade between China and New Zealand has continued to grow.