China's Premier Wen Jiabao shakes hands with Helen Clark after a signing ceremony at the Great Hall of the People in Beijing. Photo / Reuters

China's Premier Wen Jiabao shakes hands with Helen Clark after a signing ceremony at the Great Hall of the People in Beijing. Photo / Reuters

BEIJING - New Zealand's landmark Free Trade Agreement with China is "just the beginning" of a relationship which offers both nations significant benefits, Prime Minister Helen Clark says.

Speaking after the signing ceremony in Beijing's Great Hall of the People, Miss Clark said it should not be treated simply as a clearing of tariff barriers.

"We should see it as a platform for growing the value of what we do in China," she told reporters tonight.

Tiananmen Square was draped in New Zealand and Chinese flags when Trade Minister Phil Goff put his name to the agreement, the first China has signed with a developed country.

Earlier, Miss Clark met Premier Wen Jiabao and she said he was also treating the agreement as a historical step in an ongoing relationship.

"The premier was as keen as we are to get on with implementation now and look for new areas to develop trade between us," she said.

The New Zealand business community lauded the agreement, saying it had the potential to become New Zealand's largest export destination.

"An enhanced trade relationship with the world's fastest growing economy is an outstanding achievement," said business New Zealand chief executive Phil O'Reilly.

New Zealand became the first Western country to sign such a deal with China.

The trade agreement was signed in Beijing and outlines an ambitious plan to boost trade between the countries.

About 35 per cent of New Zealand goods will become tariff free by October, with another 31 per cent tariff free by 2013. The bulk of the remainder will be tariff free by 2019.

"Our current position is that we are one of many potential customers buying Chinese goods," Mr O'Reilly said.

"Following the free trade agreement, the potential will exist for China to become our biggest customer." He said it was up to New Zealand businesses to capitalise on the deal by trading with China.

Business Roundtable chairman Rob McLeod said both New Zealand consumers and exporters would benefit from the deal.

Business and investment links would also be strengthened.

"Initial indications are that the agreement is comprehensive and largely free of the restrictions and exclusions of some FTAs.

"It suggests China could well be a force for multilateral trade liberalisation in the decades ahead."