New Zealand is well placed to benefit from China's Belt and Road initiative despite not being geographically located within it, says HSBC NZ chief executive Chris Russell.

The Belt and Road is China's largest foreign policy initiative. It aims to create a new economic zone based around the ancient Silk Road trade route from China overland to Europe (the belt) and China's ancient maritime shipping routes (the road).

There are more than 60 countries in the Belt and Road zone and China expects its trade with them to exceed US$2.5 trillion a year within the next decade.

As much as it was about creating new markets for China's economic expansion it was about improving the flow of trade and the access to those markets, Russell said.


More than US$1.1 trillion has been committed by China and its banks to development projects throughout the region.

New Zealand could also benefit from infrastructure investment, Russell said.

"I'm sure if China was asked they'd be very interested in looking at things like light rail to the airport," he said.

But ultimately the bigger opportunity for New Zealand would come from the economic growth in the region.

By 2030 there are projected to be three billion more middle-class people in the region.

"That just plays into New Zealand's economic story," Russell said. "What do the middle class want, they certainly want better quality food, they want to know about the safety of the food."

There was also a growth in demand for New Zealand's services. The country, for example, was well placed as a supplier into the tourism and education industries.

New Zealand's strong relationship with China put the country in a prime position to benefit from the developments.


"Premier Li's visit here [in March] and New Zealand agreeing to be the first Western Country to sign up to the initiative is pretty significant," he said.

But even going further back via the relationship with Rewi Alley which dates back 90 years the ties were very strong, Russell said.

Alley was a New Zealand writer, educator and social reformer who travelled to China and lived among its people for 60 years.

Russell acknowledged that New Zealand's diplomatic position might require some "careful negotiation", given some of the tensions between China and the US, but he did not see it as overly problematic.

"I think China gets that. What we've seen is quite a bit of maturity from China."

Countries like New Zealand and Australia have historical and cultural ties with Western countries.

"Where it is going to potentially be tricky is where we are forced to make decisions which test alliances and allegiances. But hopefully we can continue to negotiate our way through that."