Todd McClay: Kiwis keyed into trade opportunities in Asia

Todd McClay, Minister for Trade.

OPINION

There is no question that trade matters for our country’s prosperity.

One in four New Zealand jobs depend on trade.

That’s the high-quality exports we send overseas, the investment we attract, and the world-class experiences and education we offer.

We also know that employment grows 12 per cent faster, wages are 10 per cent higher, and productivity is increased by 36 per cent in exporting firms compared with non-exporters.

To harness and grow these benefits our Government is committed to growing our international connections.

We want to attract more investment and double the value of our exports in 10 years.

We are delivering more trade missions than previous governments, and we are sharpening our focus on the Indo-Pacific region.

From a trade perspective, seven of our top 10 trading partners are in Asia and it remains the region with the strongest growth prospects no matter which metrics we use.

China alone has a growing middle class of over 500 million people that are demanding high-quality, safe products and services.

Singapore is our fourth largest trading partner, with two-way trade of $10 billion.

Asian markets continue to offer huge opportunity for Kiwi exporters, and it is this Government’s priority to be outward-facing and engaging on the world stage.

Prime Minister Christopher Luxon has so far led two missions this year - visiting Singapore, Thailand and the Philippines in April, Japan in June, and there are more on the cards.

It is clear we are not just setting ambitions, but we are also out hustling to realise opportunities for Kiwi businesses.

Joining the PM and his delegation in Japan I can say there remain significant opportunities for New Zealand business in that market.

From partnering with like-minded and complementary Japanese companies to joint ventures in new and emerging fields such as renewable energy, science and innovation, and space.

The strong relationships built between business and government during this visit will deliver for New Zealand as we continue to grow our economic presence in Asia.

I was encouraged by the alignment of New Zealand and Japan’s trade interests, as we look to deliver stability and prosperity for our countries.

New Zealanders intrinsically understand the opportunity the Asia region presents.

The Asia New Zealand Foundation runs an annual in-depth survey that looks at how New Zealanders perceive the Asia region and our international relations more broadly.

Released in June 2024, the survey shows that New Zealanders see Asia as one of the most important regions to New Zealand’s future. In fact, three-quarters of New Zealanders now say that Asia is second only to Australia in terms of its importance to us.

Within Asia, I was fascinated to read that New Zealanders are increasingly recognising the importance of South Asia, and of India in particular. Our Government has come to the same conclusion.

A youthful, fast-growing country made up of 1.4 billion people is going to need the kinds of goods and services we can offer.

For a country like India, growing trade while we work to formalise our relations is essential.

That is why, as a Government, we see building business and trade linkages as the most important activity New Zealand can pursue, to grow our relationships across Asia.

Through trade, we not only work to advance our own prosperity, but also our security, our communities, our cultural connections, and our government-to-government relations. It is, after all, about bringing people and goods together for shared benefit.

From the survey, I was particularly pleased to see that 67% of New Zealanders are interested to learn more about business ties with Asia and are keen to learn more about our connections across the region.

This is good news, and one of the reasons we are heavily investing in outward engagement and taking delegations to explore opportunities for growth together. Being on the ground in Asia is essential.

You cannot get a sense of the scale, tempo, diversity and openings for us from afar.

New Zealanders are positive about the impacts of tourism and investment from Asia.

Eighty-one per cent expect Asian tourism to have a positive impact on New Zealand, while around two-thirds expect positive benefits to stem from regional economic growth and Asian investment in New Zealand.

New Zealanders are overwhelmingly optimistic about the impact technology and innovation in Asia will have on New Zealand over the next 10 to 20 years, with 76% saying it will have a positive impact.

While New Zealanders have long been aware of what New Zealand and our exporters have to offer Asia, it’s encouraging to see that New Zealanders are increasingly aware of what the region has to offer us in return.

We must manage risks, but for most of the markets available to us it is about scaling-up or diversifying our effort in two-way trade so that we have options and build greater resilience.

Once again, this is something the New Zealand public has recognised. In the Perceptions survey, New Zealanders identify India as one of the top five most important countries we should be working harder to forge connections with.

Close to 60% of New Zealanders now see India as important or very important to New Zealand’s future because of its sheer economic heft. India is projected to be the fourth-largest economy globally by 2025.

New Zealanders see Japan, Singapore, South Korea and the Philippines as countries in Asia with economies we should be paying attention to. I would also add Indonesia, Vietnam, and our other Southeast Asian partners such as Thailand and Malaysia.

We are best served by options and a range of partners to trade with. Combined, the 10 countries of Southeast Asia represent the world’s fifth largest economy. The region imported over NZ$9 billion worth of New Zealand goods and services in 2023 alone.

It’s encouraging to see that New Zealanders’ increased awareness of Asia’s importance to our future is matched by steadily increasing knowledge levels.

Knowledge of Asia is at an all-time high this year, but more work is needed to ensure New Zealanders are plugged in to the region and seeing firsthand the opportunities available to us.

Recognising the vital importance of Asia to our future and fostering a deeper understanding of the region is essential if we are to realise our aspirational goal of doubling the value of New Zealand exports over the next 10 years.

The Asia New Zealand Foundation’s survey shows we are well-positioned to achieve this goal.

It’s my commitment as Trade Minister to do all that we can to ensure this.

Todd McClay is Minister for Trade.