Fran O'Sullivan: Dairy top of agenda for China talks

China is expected to raise the issue of visa extensions and OIO processing times during John Key's visit to the capital. Photo / Bloomberg

Key says NZ will ‘trade some stuff’ for traction on hefty tariffs.

John Key will put some hefty New Zealand issues on Beijing's radar screen on Monday as he gets down to business with China's top leaders.

A 40-strong mission accompanying Key to China - including leaders from major NZ dairy companies like Fonterra, Synlait, Tatua and Westland Milk - want China to relax punishing tariff "safeguards" that erode the returns from NZ milk powder imports.

But Key is downplaying expectations that an announcement is pending.

He expects the matter will ultimately be addressed in an upgrade of the ground-breaking 2008 China-New Zealand free trade agreement. But Government sources suggest the extent to which the safeguards are relaxed may not be known until an expected visit by Premier Li Keqiang to New Zealand later in the year.

Key says he put the FTA upgrade on the agenda when he met President Xi Jinping in Washington DC at the recent nuclear security summit.

"I said to him we have been long-standing friends and this really matters to us," he said. "Secondly, we can't embark on the upgrade without dairy being included. It's 45 per cent of our exports so I can't leave them out."

Key will be looking to Xi to give the Chinese bureaucracy a steer to get the detailed negotiations on the upgrade under way.

Key told the Herald that New Zealand will "trade some stuff" that China also wants. He would not divulge the detail but it appears likely that visa extensions will feature.

Much of the business will be done at Key's Monday meeting with Premier Li Keqiang at the Great Hall of the People. On Tuesday, there will be a subsequent meeting with President Xi Jinping followed by a private dinner.

Other issues likely to feature in the bilateral talks include Chinese foreign direct investment in New Zealand and the length of time it takes potential investors to have applications assessed by the Overseas Investment Office.

Key notes this is also a bugbear for investors from other nations.

"We'll give a bit of reassurance that while the law isn't changing, the efficiency of the process will."

It is expected that detailed discussion of sensitive issues like China's reclamations in the South China Sea may take place during the private dinner with the president.

He will also put in a word for Helen Clark, whose bid to be the United Nations' next Secretary General stepped up in New York this week.

'First son' goes along for the ride

DJ Max Key - dubbed the "first son" by Beijing - will accompany the Prime Minister to China on the air force 757 that leaves Auckland this weekend.

"They are apparently super-excited about the - quote 'first son' unquote - coming," laughed father John Key. "They have got him going to a girls' school."

Key explained that President Xi Jinping had invited him to bring his family with him on his next trip to China.

Max Key's celebrity preceded him when he hit Sydney earlier this year, staying with Key and his wife Bronagh at Australian Prime Minister Malcolm Turnbull's harbourside mansion during an official visit.

He is no stranger to life in the high lane, earlier joining his parents at Balmoral Castle in Scotland as a guest of the Queen, and playing golf with Barack Obama in Hawaii.

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