Next week's visit by Chinese Premier Li Keqiang is an auspicious one for New Zealand.

It provides an opportunity to progress talks on updating the China Free Trade Agreement, removing remaining non-tariff barriers and addressing new areas a like e-commerce.

But beyond the detailed discussions it also offers a golden opportunity to send a message to the world with a joint commitment to free-trade and open global commerce.

These things are as vital to China's future as they are to ours.


The timing is significant. The second most powerful man in China arrives in our country at a time of great political uncertainty for international commerce.

US President Donald Trump's has already derailed the Trans-Pacific Partnership and there are fears he could go further, potentially causing a full-blown trade war with China.

Trade officials and commentators remain hopeful that his new administration's trade stance will be softer than the harsh rhetoric used during his presidential campaign.

Trump has talked about imposing harsh tariffs and openly accused China of currency manipulation.

But few believe that the US establishment has any serious appetite for a trade war.

The consequences would be severe for American corporations and consumers.

Certainly China does not want a trade stoush.

Speaking after the annual National People's Congress in Beijing earlier this month Premier Li was open and emphatic on the issue.


"We don't want to see a trade war between the two nations. That wouldn't make our trade fairer and it would hurt both sides," Li said.

He warned that Americans had most to lose if tensions between the world's two largest economies came to a head. "Foreign-invested companies, especially those from the US, would bear the brunt of it," he said.

We've seen mixed messages from the US in the past few days.

US Secretary of State Rex W. Tillerson and President Xi Jinping met Sunday, publically talking about greater cooperation and vowing to strengthen ties.

But even if Trump pulls back from his most extreme rhetoric, concerns remain about his administration enabling the creep of protectionist policies around the world.

These were born out on Saturday at the G20 meeting of Finance Ministers in Germany.

Key provisions promoting free trade and committing to end protectionist policies were dropped from the final communiqué. It was a move some see as the first step on a dangerous path for the global economy.

German finance minister Wolfgang Schäuble described it as "an impasse" and indirectly pointed the finger at the US.

US Treasury Secretary Steven Mnuchin appeared to have "no mandate" to talk about definitions fair trade, Schäuble said.

New Zealand does not have to "pick a side" on trade with the US and China.

It would serve no useful purpose and diplomacy with the US is now more important than ever.

But, judging by the rhetoric coming from leaders of the two nations, it is now with China that our most common economic ground lies.

Next week's visit should provide a platform for our Prime Minister and the Chinese Premier to send a positive message on global trade.

A message which makes it clear that the Asia-Pacific region remains open for business.