Closer food ties with China worth the risk, says Key

Fonterra chief executive Andrew Ferrier answers questions about its involvement in the Chinese milk scandal in September last year. Photo/ Brett Phibbs

BEIJING- China's desire for New Zealand to help sort out its food safety crisis is a commercial risk well worth taking, Prime Minister John Key said today.

Key met Premier Wen Jiabao overnight with both men toasting the health of the relationship and the desire to build on the one-year-old trade deal between the two countries.

It is the first visit by a New Zealand leader since the poisoned milk scandal swept through China.

New Zealand dairy giant Fonterra had a 43 percent stake in Sanlu before it became the first of 22 Chinese dairy companies to reveal its products contained high levels of melamine, the chemical blamed for the deaths of six babies and urinary problems in nearly 300,000 others.

``Premier Wen said as far as they were concerned they saw Sanlu as a single isolated incident that was behind us now... In particular he made reference to wanting to work with New Zealand in the development of food safety standards.'

Despite its involvement, Fonterra's exports to China have boomed since the poisoned milk scandal because Chinese households were seeking safe food, while Chinese farmers were in crisis because a lack of public confidence in their produce.

Key said New Zealand would work with the Chinese to see if New Zealand's food safety expertise and technology was exportable.

``From our point of view we want to play a long term role in the development of the agricultural sector. So if we can become a significant partner with China that gives us a big advantage,' Mr Key said.

``They see New Zealand as the big player.'

Asked if this might undermine New Zealand farmers by making China a strong competitor, Key said: ``There is always some risk there, but you can't stop selling cows to them or the like, they will just go and buy them from Australia or somewhere else.'

New Zealand could try and resist the economic giant's growth or work alongside the Chinese, and Mr Key believed it was better to form partnerships.

Regarding the political situation in Fiji, Key said Premier Wen had urged Fiji to work with New Zealand and other Pacific Forum countries to resolve differences with the military regime, but he did not believe that would stop them giving aid to Fiji.

``While they talked about the desire to see Fiji engage in dialogue with New Zealand and the likes... I think ultimately China is going to reserve the right to give aid where ever they think it is appropriate and for whatever rationale they have.'

Key travels to Shanghai today for a series of business-focused events.

Ian Llewellyn travelled to China with the assistance of the Asia New Zealand Foundation

NZPA