KEY POINTS:
Air New Zealand's chief executive Rob Fyfe has already pocketed some benefits from the China free-trade deal.
Air New Zealand will take business leaders on its inaugural flight to Beijing next month to celebrate the launch of its new thrice-weekly service to the Chinese capital. Before the China
free-trade agreement was inked, there were concerns that the airline's planes might be given an early-morning landing slot, which is not the best time for tired business people, let alone tourists, to scramble through Customs and make their way into the centre of Beijing.
Air New Zealand has since been offered a landing slot around 7.30am to 8am. This will clearly enable businesspeople to have a good night's sleep on their way up from Auckland and arrive fresh enough for the day's appointments.
More importantly, the timing, combined with rights to bring its planes into Beijing Capital International Airport's new Terminal 3, will ensure the airline doesn't lose customers to competitors such as Qantas.
Qantas also offers three flights to Beijing, via Sydney, each week but its flights arrive at 8.10pm, so business people lose out on a working day.
It may not seem a big deal for all Kiwi tourists but, with the Beijing Olympics fast approaching, Air New Zealand is positioned well.
With the small Kiwi airline intent on building a healthy business on the back of the China free-trade agreement, the fact that Beijing has quickly cleared roadblocks is a good signal that the Chinese also see value in the long-term relationship.
In all, Air New Zealand expects the agreement could add $10m-$15m a year to the bottom line - helpful when the airline is under pressure from rising fuel costs.
This vignette shows what happens when Beijing gets serious about commercial relationships with favoured nations. When the agreement was signed in April, there was considerable scepticism that it would deliver real benefits to New Zealand. But the signals are that the Chinese Government, even this early on, is determined to see New Zealand does post some concrete results.
Parliament's foreign affairs, defence and trade select committee is now hearing submissions on the free-trade agreement legislation.
Submitters have ranged from New Zealand's largest exporting company, Fonterra, through to the Wildcat Anarchist Group, which believes the agreement undermines local manufacturers and is concerned there are no safeguards built into the deal for New Zealand. The concerns need to be confronted openly.
But its likely the committee's balancing act will be strongly influenced by submissions such as that delivered by Fonterra executive Phil Turner last week.
The dairy giant was always predicted to be a long-term winner, as the agreement's lengthy phase-out period for tariffs on dairy products goes into effect. But the benefits have in fact been immediate, with a $300m contract to supply a major multi-national customer with nutritional milk powders inked within weeks of the agreement signing ceremony.
Without the agreement, lower-priced products from New Zealand would almost certainly have been processed offshore in Asia. But the value-added products will now also be manufactured in New Zealand factories, using New Zealand milk, capital, labour and technology.
The agreement has generated huge interest from Kiwi business people who have attended Trade and Enterprise's roadshows in the past week. The Auckland roadshow was standing-room only.
Trade and Enterprise will open up to five more offices in China over the next four years to work with New Zealand businesses and increase their engagement with potential trade and investment partners.
A New Zealand Concept Centre is also being set up in Shanghai to help companies build their connections, brand awareness and capability in China.
Chinese provincial governments are taking notice of Beijing's signals, with New Zealand companies now reporting positive responses on the regulatory front.
China's Vice-Commerce Minister Ma Xuihong emphasised to me in Beijing recently that the implementation phase was the most important element of the agreement's success.
These early signs that the agreement is delivering real benefits to New Zealand business should allay fears that there will be a considerable domestic downside to the deal.
