China keen to build on free trade deal: Key

BEIJING - China remains committed to its trade deal with New Zealand and wants to expand and build on links between the two countries, Prime Minister John Key said last night.

Mr Key made his first visit to Beijing's Great Hall of the People for a meeting with President Hu Jintao.

The state of the world economy and trade was on top of the agenda for the meeting, which comes one year after New Zealand became the first developed nation to sign a free trade agreement (FTA) with China.

Since the deal, trade between the two countries has grown rapidly, with exports to China increasing by 35 per cent and imports from China growing by 12 per cent.

With the world economy in recession, many countries are flirting with erecting trade barriers, but Mr Key said President Hu had reassured him that China was committed to ensuring the trade deal came into force as scheduled.

"He noted the increase in exports and imports for both countries. He believed we were facing quite difficult economic times ... but was hopeful the foundation stones had been laid through the FTA, and that would provide great opportunities in the future," Mr Key said.

Most of the large benefits for New Zealand's main exporters will be rolled out in stages over the coming years, and some have feared that China may trigger delay clauses to protect industries hit by the worldwide recession.

However, Mr Key said China had, in fact, said it wants to build greater links.

"[Mr Hu] reiterated to me the importance of free trade ...

"He said we had a very warm relationship and he wanted that taken to another level."

Mr Key continues his visit to Beijing today to sign an agreement on tourism and give a speech at Beijing University, before meeting Premier Wen Jiabao.

Tomorrow he travels to Shanghai for a series of business-focused events before going to the Boao regional economic forum in Sanya over the weekend. The forum is China's regional economic forum which many regional leaders and business people attend.

CHINA
* New Zealand's fourth-largest export market after Australia, the United States and Japan.
* New Zealand's second-largest source of imports after Australia.
* New Zealand estimates that two-way merchandise trade grew to $9.1 billion in the year to February 2009.
* New Zealand's largest source of foreign students, with around 20,000 now, down from the peak of 65,000 in 2003/2004.

- NZPA