Prime Minister John Key says the launch of negotiations to upgrade New Zealand's free trade agreement with China is an opportunity to catch up with other countries which have signed trade agreements with China since New Zealand became the first to do so in 2008.

Key announced the launch of negotiations at the APEC Summit in Peru this morning.

He said it was another first in China - New Zealand relations. New Zealand was the first developed country to sign an FTA with China in 2008 and will be the first to negotiate for an upgrade.

New Zealand had been pushing for an upgrade after China signed other FTAs with countries including Australia on more favourable terms in some areas.


Key said the China free trade agreement had exceeded all expectations.

"It has an enviable record and showcases to the world the importance of trade liberalisation."

The announcement followed a meeting at APEC between Trade Minister Todd McClay and China's Commerce Minister Gao Hucheng.

The first round of negotiations will be held in the first half of 2017.

The terms of the negotiations will allow the improvement in areas already covered by the FTA as well as some newer areas such as competition policy and e-commerce.

There have been some strains on the relationship, including over complaints about China dumping steel in New Zealand. McClay said that issue was not touched on in the talks this weekend.