Fran O'Sullivan: Chance to open trade doors wider

China's heir apparent, Vice-President Xi Jinping, who begins a three-day official visit to New Zealand tomorrow, is being accompanied by the most high-powered Chinese business delegation to visit this country.

The Xi visit presents an enormous opportunity for New Zealand players to lift the relationship from its focus on agriculture trade to broader business opportunities.

It also presents an opportunity for New Zealand's power players to take the measure of the Chinese politician who is expected to step into President Hu Jintao's shoes in 2013.

Xi is a very different figure from his leader.

Like Hu he trained as an engineer. But he cut his commercial teeth as party boss in Fujian where he reached the position of provincial governor in the early 2000s and earned a reputation for a "do it now" approach which he is reputed to have sold as the quickest response to problems emerging from fast competition.

He then honed his skills as party secretary in the fast-growing Zhejiang Province before being parachuted into Shanghai after the local party chief went down in a corruption scandal.

Importantly, Xi is also a "prince-ling" a son of Xi Zhongxun, who was a former Deputy Prime Minister of China. But he is considered to have made his way on his own merits.

About 120 senior Chinese business leaders are accompanying Xi to New Zealand. Many are under the umbrella of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products which is reputed to be one of China's most powerful business organisations.

Among them is Wu Kesong, who is vice-chairman of the giant Haier Electrical Appliances, which last year took a 20 per cent stake in cash-strapped Fisher & Paykel Appliances through a rights issue.

Wu is being accompanied by Haier general manager Shi Zhiyuan and region manager Wang Rongli.

The Haier delegation will accompany Xi on a visit to Fisher & Paykel Appliances' Auckland plant tomorrow.

The Chinese leadership is understood to view the Haier investment as a good marriage between the intellectual property and strong innovative record F&P can bring to the table with Haier's extensive distribution networks within China.

Fisher & Paykel products will be sold as luxury brands through Haier's Chinese stores. Cheaper Haier brands will also be sold here.

The Chinese leadership will be at pains to stress that New Zealand companies are not takeover targets but the opportunities for co-operation are immense.

An early plan for Xi to visit Rakon appears to have been dropped from his tight schedule. But he is expected to touch base with Rakon personnel who successfully raised $66 million last year to fund the expansion of its Chinese manufacturing operations.

Rakon had put expansion on hold while the world was in the grips of recession but is now proceeding with plans to build a crystal manufacturing plant in Chengdu, one of China's largest cities. Rakon executives say they decided to focus on Chengdu because it was a large city with a skilled workforce. It already had a high-tech zone with more than 700 foreign invested enterprises and was a development base for many of Rakon's customers.

Other visiting Chinese state-owned enterprises which are seeking to build their business interests here include China Railways Materials Commercial Corporation which has contracts to build rail and port facilities for mineral exports in Australia. The Department of Commerce of Inner Mongolia, which is expected to facilitate future investment by Fonterra in the autonomous region, will also be represented along with officials from China's investment promotion agency.

The centrepiece of the Xi visit will be a business luncheon in Auckland tomorrow - which will be addressed by Xi - followed by a free trade agreement seminar attended by nearly 350 leading business people from both countries.

Xi will be the first high-echelon Chinese leader to speak publicly to a major business audience here. President Hu Jintao privately met a bevy of senior business leaders during his official visit to New Zealand in October 2003 - one of his first overseas trips as China's leader. But Premier Wen Jiabao's subsequent visit in April 2006 had a distinctly operational focus with considerable attention paid to ironing out roadblocks in the negotiations towards a free trade deal.

When Wen visited, China was New Zealand's fourth-largest trading partner. Since the FTA was signed in April 2008 bilateral trade has continued to snowball. China is now New Zealand's second largest trading partner after Australia.

John Key's Cabinet will also take the visit as yet another high-level endorsement of their decision to leverage the $30 million investment by successive Governments and sponsors in the Kiwi Pavilion at the Shanghai 2010 Expo.

Trade Minister Tim Groser and Economic Development Minister Gerry Brownlee have led successful missions to China, spring-boarding on the hosting opportunities available at the pavilion. Key will lead a group of senior business leaders to Shanghai for NZ's National Day on July 9.

Among the VIPs on Xi's delegation are a smorgasbord of vice-ministers: Shen Yueyue (China Communist Party central committee - organisation department); Zhang Zhijun, (Foreign Ministry); Liu Tienan (National Development and Reform Commission) Chen Jian (Commerce Ministry) and Shi Zhihong (deputy director, Policy Research Office). The official party also includes Wei Chuanzhong, who is the vice-minister for the Chinese department dealing with quarantine inspection.

Companies represented include Shanghai General Motors, several investment and real estate companies, energy companies, textile companies, technology companies, ship building firms, coal and mineral firms and the wood industry.

Several agreements will be signed during the visit: An exchange of letters between the New Zealand-China Friendship Society (NZCFS) in New Zealand and the Chinese People's Association for Friendship with Foreign Countries (Youxie), the organisation with which Rewi Alley was associated for many years to facilitate youth exchanges; a memorandum of understanding between the China Development Bank and ANZ which has facilitated considerable high-level business investment between the two countries; and an agreement focusing on product safety and an endorsement of bilateral progress on market access.