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Home / Business

China Business: Thoughtstarters - CEOs on China

NZ Herald
29 Apr, 2015 05:00 PM4 mins to read

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CEOs Theo Spierings of Fonterra and Christopher Luxon of Air New Zealand. Photo / Dean Purcell

CEOs Theo Spierings of Fonterra and Christopher Luxon of Air New Zealand. Photo / Dean Purcell

Theo Spierings - Fonterra

What always amazes me is that with China - wherever the world is or whatever issues they have to deal with - the Chinese leadership is so strong and the development is so fast we have to stay at China pace otherwise we lose relevance.

That is the most important message and it's most on my radar with all the issues we face around the world in markets.

With China you need to have a very good relationship with Beijing - that is very important. To have a strong connection at the national level is the key. But you also need something very focused at regional levels.

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Listen very carefully to what the Chinese tell you. Listen very carefully because they have a very clear agenda. We can always choose to be part of it or not. But we'd better be part of it.

If we don't get China right, it is difficult to operate from the South Pacific and difficult to compete in the rest of the world. So don't talk to me about spreading risk in New Zealand.

We need to do maybe two or three things in the market really well that are connected to our DNA and thinking and logistics and we need to forget about the rest.

My concern is that New Zealand and Fonterra go fast enough. Because China moves on. China goes so fast.

The basket has to be attractive enough to the Chinese. We should potentially have more eggs in the basket but we need to move and develop with the Chinese and their thinking. They are open for it. But we are not knocking on the door.

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Take Fonterra. We really did not have a China strategy but we launched one in line with the group strategy. Now, three years down the road, we sell four times the ingredients. We have more than doubled food services. We have launched Anmum and Anchor. We are building our farms progressively. We have formed partnerships with Beingmate and Abbott.

That's why the Chinese like us - because we move with their thinking, but at pace.

If commercial people - like Chris and I with global footprints - don't lead, then it is difficult for the country. And we need more "outside in" thinking.

Christopher Luxon - Air New Zealand

Big picture wise, it's obvious the relationship between China and New Zealand is still in very good heart.

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The danger, what we need to watch out for, is that we don't want to lose the notion of the "firsts" we have achieved.

And we don't want any slippage or to move down the pecking order with China.

We should be continuing to position New Zealand as a petri dish for the Chinese to gain experience working with Western economies that have sufficient developed market scope - but on a small scale.

We can play quite an important role and position New Zealand very positively. The question is about the level of ambition. We've got this free trade agreement. But now others are going to have FTA agreements. So the first mover advantage goes away over time. So, what's the next first mover advantage?

When we see a visa deal being done between the US and China - who arguably have more tension in their relationship in some ways than New Zealand - that is a real challenge and something we should be on the front foot with going after those things as new "firsts".

We could be doing a lot more to build Chinese language skills. I really don't understand how a country that in the next 20-30 years thinks it's going to become an important trading partner for China, and, already is - doesn't have a bigger drive around being able to do business in China.

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There's lots of anecdotal evidence that the quality of our Chinese teaching is poor. When my generation came through high school, Japanese was the number one language we were learning.

We need that same sort of focus on the Chinese language.

I still think it is important to diversify the China risk. We at Air New Zealand are doing that purposefully around the Pacific Rim, around the Americas and Asia and Australasia.

But the move to the "new normal" and a bigger middle-class in China, will impact on tourism, and big numbers trickling through will have consequences.

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