KEY POINTS:
Trade liberalisation in goods
Winners China will lower tariffs on most imported NZ agriculture and manufactured products to zero (over time), saving our exporters a total of at least $100 million annually.
With Chinese tariffs running at about 10 per cent for milk powder (yoghurts and cheese
top 15 per cent); 12-20 per cent on sheep meat and 15-20 per cent for kiwifruit, the upside is considerable. But there will a lengthy phase-in period for dairy as China fears its own fledgling dairy farming industry would be squashed.
Manufacturing exports ranging from machinery through to light industry, whiteware, automotive parts, steel and aluminium products will benefit to varying degrees. But reciprocal liberalisation will ultimately make the local scene more competitive.
Losers Wool: China is NZ's biggest market for wool products which enter at very low-duty rates (1 per cent under a tariff rate quota system).
But out-of-quota exports face a 38 per cent duty. China strenuously argued going to zero would wipe out the livelihoods of its sheep farmers in frontier regions. A special quota arrangement is expected.
Forestry: China is one of the world's largest forest product importers. But complications under a provision in China's WTO accession deal with the US proved a sticking point. Some co-operative element may emerge.
Textiles and apparel manufacturers: Will have to up their game when NZ speeds up remaining tariff reduction in these areas, opening the way to stiffer competition from Chinese imports.
Electronics: A separate agreement will be signed to ensure co-operation on conformance assessment for electrical and electronic equipment. Some retailers are nervous NZ's safety standards may become compromised.
Movement of people
Working-holiday programme for young professional Kiwis to go to China.
NZ business people will find it easier to get short-term visas; an advance record system will ultimately be promoted to ensure important enterprises and organisations on both sides get timely entry visas.
More exchanges of experts, scholars, students and technicians and intra-corporate transferees.
Chinese traditional medicine experts, acupuncturists, Mandarin teachers and chefs will be allowed into NZ under a constrained quota.
No invasion of unskilled Chinese workers into NZ. Trade Minister Phil Goff strenuously opposed a push for Chinese labourers to work on NZ construction sites; Chinese workers must be paid NZ rates while here.
Trade liberalisation services
Winners
Tourism and education ex-China are major money-spinners for NZ. An agreement to facilitate two-way tourism traffic is expected. Education earnings fell away after the collapse of English language schools and the appreciation of the NZ dollar. Look for more NZ educational institutions running schools in China in co-operation with Chinese authorities in areas like biotech, management and telecommunications. NZ students may also be encouraged to study in China.
Aviation and transport co-operation will be encouraged. Likewise insurance and financial services areas and the film industry.
Losers
NZ construction firms may face more competition if China gets a slice of NZ's motorway and road building business.
Bilateral investment
Investment flows between NZ and China are modest in comparison to other countries. China will want more favourable investment terms in NZ than, for instance, the US. Will it succeed?
Winners
NZ may score an advantage from international investors moving here to get better access to China.
NZ businesses will be encouraged to invest in Western China and the old industrial bases in northeast China.
Wood processing, dairy biotech, ICT, fisheries and manufacturing have also been pinpointed as suitable for joint-ventures.
Making it work
More efficient customs clearances.
Strengthened co-operation on intellectual property rights protection and sanitary and phytosanitary measures.
Support for small to medium enterprises to enter China.
Trade and investment promotion and government procurement.
Most-favoured nation clause will ensure any subsequent deal China signs with another country will not cause NZ to lose its first-mover advantages in critical areas.
How the major sectors can cash in
Food and Beverage
* Asian consumer trends are shifting towards safe, healthy food produced in an environmentally sustainable manner.
* China is already New Zealand's largest customer for milk and cream products. The development of functional foods such as low-fat, high-calcium and protein milk are expanding Fonterra's product range.
* NZ meat - a $4.3 billion annual business - will be pitched as the "very best pasture-fed, naturally raised meat in the world". The national flock and herd are disease free - and the prime cuts have succulent flavours.
* Seafood is another success story with the consumer preference for healthy, fresh and delicious products. Fresh vegetables and fruit have counter-cyclical seasonal appeal.
* Wines and specialty products like honey, avocado oil and even water are on the promotion list. This is a sector where Maori have a strong economic upside from their investments in farming and fishing (Sealord).
Education
* New Zealand's education system will be promoted as world-class, modern and responsive, equipping leaders and citizens for the 21st century.
* Almost 100,000 foreign, fee-paying students from 71 countries study in NZ. 80 per cent are Asian - 32,000 (one-third) from China. NZ educational institutions are also setting up in China.
* The pitch: "fresh thinking, British-based programmes, world class educators and NZ's recreational paradise". It can be offered in NZ, or over there. Unitec's School of Design has a research centre in Guangzhou.
Agritech
* "Can do" attitude and an "ingenious" approach to problem-solving have endowed the Kiwi agritech companies with the smarts to develop anything from improved livestock farming to bovine genomics and products that boost animals' immune systems.
* Fonterra has already developed a commercial dairy farm in North China with its partner San Lu to demonstrate Kiwi ingenuity.
Creative Industries
* NZ is positioned as the "world within one country" when it comes to shooting movie blockbusters. China is already mass-producing props for big NZ epics.
* Natural History NZ is producing docos on China for the international market; then there are the TV commercial producers, multimedia software and post-production houses wanting a slice of China's rapidly growing film and TV sectors.
* NZ engineering consulting firm Beca Group is the ground-breaker. Marshall Day Acoustics is advising on the new Guangzhou Opera House.
* So far our designer fashion exports to China are minuscule. New Zealand Trade & Enterprise hopes to change that by promoting Trelise Cooper and Karen Walker.
* High-class footwear and children's clothes, NZ textiles and carpets will also feature, along with the finest quality fibre used for innovative garments made by Icebreaker and Untouched World.
Aviation
* NZ's aviation sector will be promoted as providing a one-stop solution for international customers from pilot training, through to general aviation, airport infrastructure, cabin interiors and maintenance repair and overhauls.
* NZ is responsible for 9 per cent of the world's airspace. Aviation exports were worth $800m in 2006 and are predicted to reach $2 billion by 2020.
* Among leading NZ companies, Right Hemisphere designs 3D product graphics management systems for nine of the top 10 US defence companies. CTC Aviation trains pilots; Glidepath designs and manufactures baggage handling systems; Beca manages airport projects. Source: New Zealand Trade & Enterprise