Hawke's Bay Chamber's China deals

By PATRICK O'SULLIVAN - Business Editor

The Hawke's Bay Chamber of Commerce is clearing a path into China. A trade delegation returned last week with deals done, agreements signed and a flurry of more trips planned by both sides, says chamber CEO Murray Douglas.

The chamber acts as the economic agent in China for Napier City Council and the Hawke's Bay Regional Council. Councillors from both organisations attended.

Deals were done for honey and wine and memorandum agreements were signed with the Xuzhou Chamber of Commerce and Beihang University in Beijing.

The university is small by Chinese standards - 55,000 people. "The deal is for Chinese language training, co-operation on aviation training, tourism management and other possibilities," Mr Douglas said.

"We were staying in their five-star hotel, about 20 stories, on their campus, fully staffed by their students. You wouldn't know - it was faultless.

"There is a potential for some of their teaching to be done here. We will never get a university from New Zealand in Hawke's Bay but we might get overseas educational facilities based here because we are safe and friendly with China.

We are still the only western nation with a free trade agreement with China.

"The memorandum is pretty mild but they have since emailed me so they are quite serious about trying to link with us."

It is an important step in what can be a colourful journey, Mr Douglas said. "When you sign the document in China that's when you start negotiating. In New Zealand when you've done the negotiation you sign the document. It's an art form, not a straight-out contract. And the art form is over the meal and conversation and the karaoke."

The chamber met, without the politicians, some "seriously well-healed" investors and presented investment opportunities. "We took up some that are public, like Te Mata mushrooms with Colliers involvement, but also others you wouldn't think were on the market."

He said many were happy to invest in New Zealand even though they would receive a lower level of return, but for safer investments. "They'll be getting massive returns in China. When your economy is growing at 8 per cent your returns are at six or seven, maybe 11 or 12 per cent. New Zealand is seen as safe and you are distributing your risk. Many of them want to have some residency arrangements, primarily for family.

"What people want here are equity partners because that helps their business. But more importantly they want equity partners with distribution channels in China. The trick is the distribution channel.

"Selling wine here to a Chinese national to sell into China is not exporting, it's just fiddling around.

Mr Douglas brought back some interesting products, including a lookalike timber made from our own recycled milk bottles which was used as structural building material. "You have to remember trade is two way," he said.

He said wineries needed to club together and push the Hawke's Bay region. "The French are up there in a big way, the Australians are up there in a big way with wine, the Chileans are up there, the Germans and the Spanish. New Zealand is not.

He said it has taken several trips to achieve traction for Hawke's Bay deals. "We met some seriously wealthy people, billionaires in NZ dollars who are looking for businesses and I'm pretty confident we can get some deals up there, after three goes at Xuzhou we've finally got them and more to come."

He said the Xuzhou Chamber of Commerce president was a good example of the changes taking place in China. "When I first met Gu Yuhua he was in grubby jeans and a polo shirt. Now he's wearing an Armani suit." patrick.osullivan@hbtoday.co.nz

- Hawkes Bay Today

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