Nick Calder, executive director of the New Zealand Business Roundtable in China (NZBRiC)
Optimism, opportunity, and growth. These are the dominant themes emerging from our 2025 Business Outlook Survey, conducted by the New Zealand Business Roundtable in China, which asked Kiwi businesses about their experience in the Chinese market.
So, what does this optimism look like in practice? An overwhelming 95% of New Zealand companies surveyed are at least moderately optimistic about doing business in China, with more than half (52%) reporting high to very high confidence. This sentiment is backed by strong performance, largely driven by a resilient Chinese economy that continues to grow at around 5% per year despite global headwinds.
The results speak for themselves. In the first half of 2025, just over half of New Zealand businesses operating in China saw their revenue and profits increase. Looking ahead, this positive trend is set to continue. Two-thirds of respondents expect their revenue to grow further in 2026 — a vote of confidence, especially when contrasted with the challenging economic conditions at home.
Where do Kiwi companies see the most significant opportunities? According to our survey, securing profits and gaining market share remain the top priorities. The key to achieving this lies in understanding China’s unique and highly digitised commercial landscape. It’s a market where consumers order everything from groceries to pet food online, using a vast array of specialised platforms for every possible niche. Our respondents believe success hinges on building the right mix of these digital channel partnerships to reach their target customers effectively.
The sheer scale of the Chinese market cannot be under-estimated, a single district in Shanghai can have a population equal to all of New Zealand. It’s no surprise that 70% of Kiwi companies in our survey are there primarily for the size of the serviceable market.
However, seizing this opportunity now means looking beyond the traditional gateway of Tier 1 cities like Shanghai, where over 78% of New Zealand businesses currently have a presence. Consumption growth in these megacities is becoming sluggish. With housing prices reaching nearly 30 times a person’s annual income, many households are reluctant to increase discretionary spending.
The new story of growth is unfolding in China’s Tier 3 and 4 cities. Here, with lower housing costs and basic needs met, families are shifting their focus from the quantity of consumption to the quality of their lives. They are turning to domestic travel and seeking out better-quality products.
The data backs this up. According to China’s National Bureau of Statistics, 26 out of 35 major Tier 3 cities recorded consumption growth, with most increasing by 3.7% or more. This stands in contrast to urban Shanghai, which saw only 0.1% growth and a decrease in luxury spending, despite a robust increase in disposable income.
While the premium price point of many New Zealand products makes the high-income middle class in Tier 1 cities a natural fit, ignoring these emerging urban centres would be a missed opportunity. The challenge for Kiwi businesses is to watch these trends closely and plan their play to expand at the right time.
Of course, this isn’t to say we’ve “drunk the baijiu” so to speak. New Zealand businesses certainly face significant hurdles. When asked about their biggest challenges, the top concern for 57% of companies was strong domestic competition. This was followed by the difficulty of adapting to a changing retail environment and shifting consumer preferences (43%).
The challenge for Kiwi businesses is to watch these trends closely and plan their play to expand at the right time.
Traditional fears like legal hurdles and market access issues ranked much lower, at only 19%. This suggests the primary battle for Kiwi firms has shifted from getting into the market to competing within it. This is reinforced by another key challenge, weak brand awareness for New Zealand Inc., with 44% respondents feeling that there is weak brand recognition for NZ, making it harder to present their value proposition to consumers.
On the “ease of doing business,” most respondents found it to be either somewhat easy or neutral. While that may not sound like a positive number, it implies that most businesses are not fighting for basic access but are instead competing on a relatively level playing field—a crucial sign of a maturing market relationship.
This resilience rests on a strong foundation. The New Zealand-China Free Trade Agreement, now more than 17 years old and China’s first with a developed nation, ensures that 99% of our goods enter China tariff-free. This bilateral relationship is critical for business, with 70% of respondents believing the strength of this relationship is important for their commercial success.
This confidence extends to how the relationship is managed, with 69% of companies stating they are satisfied with the New Zealand government’s approach to the bilateral relationship. Many businesses in China see first-hand the impact of our active and engaged diplomats, whose strong working-level relationships help maintain market access and improve the speed to market for our perishable goods. Without such strong advocacy, New Zealand companies could not thrive in the way they have.
Given the opportunities and risks, what is the way forward for businesses as they navigate the journey into the Middle Kingdom? Our report offers several key recommendations for both business and government.
· Understand Market Dynamics and Move into New Markets. As someone who moved from a New Zealand dairy farm to China, I know first-hand that the speed of change can be dizzying. To succeed, businesses must understand that China is not a monolith. The retail and e-commerce markets differ markedly across the country. Expanding into Tier 2 and 3 cities requires more than just localising products, it needs strong local partnerships built on a long-term vision.
· Bridge the Gap Between HQ and Your China Team. Success depends on hiring talented local staff who understand the Chinese market and can communicate effectively with their New Zealand-based colleagues. Companies must invest in mutual cultural understanding and empower their local teams to make decisions at speed. In this hyper-competitive market, business decisions often cannot wait two days, let alone a week.
· Evolve the ‘New Zealand Story’. The traditional “clean and green” branding is a starting point, businesses should use social media to build a deeper narrative, one that showcases New Zealand’s unique values, personality, and ingenuity to achieve new brand differentiation.
· China must continue breaking down internal barriers. By fully implementing its “National Unified Market” policy, Beijing can reduce the friction between provinces and cities. This will make it easier for our exporters to expand beyond traditional Tier 1 markets as consumption patterns evolve.
· Both governments must maintain a strong working relationship. This means continuing the full implementation of the NZ-China FTA, nurturing strong working-level relationships, and streamlining processes wherever possible.
The year 2025 is the Year of the Snake in the Chinese zodiac, an animal associated with wisdom, transformation, and strategic thinking. By embracing these qualities, businesses can navigate the challenges and seize the opportunities in New Zealand’s “Year of Growth”.
To download a copy of the report, please visit www.nzbric.com
Nick Calder is executive director of the New Zealand Business Roundtable in China (NZBRiC)