Fears about the trade war and a slowdown in the Chinese economy have not dampened New Zealand's exports to the economic powerhouse.
The latest trade figures for the year to September show exports to China rose 23 per cent, up $227 million to $1.2 billion.
New Zealand's total exports rose $216 million (5.1 per cent) from September 2018 to $4.5 billion, according to the latest terms of trade data from Stats NZ.
Dairy products (our largest export commodity group) led the rise, up $199 million (28 percent) to $920 million in September 2019. This rise was led by milk powder, up $160 million on a year earlier.
"New Zealand is exporting more milk powder than this time last year and getting better prices too," international statistics manager Darren Allan said.
Yesterday Fonterra shifted its 2019/20 forecast farmgate milk price range up by 30c to $6.55 - $7.55 per kg of milk solids due to that strong demand for whole milk powder.
"Exports to China were the leading contributor to increases in several commodities including milk powder, beef and lamb," Allan said.
The swine flu epidemic has seen pork prices rise sharply in China, boosting demand for alternative meats.
Meat export values rose 21.4 per cent month on month.
The good news was offset lightly by a fall in Kiwifruit and forestry prices.
Forestry products were down $63 million on September last year, led by a fall in untreated logs.
"In each of the last three months, the total value of untreated log exports is down on the same month of the previous year, driven by lower prices," Allan said.
Kiwifruit exports were down $77 million from September 2018.
ASB economist Mark Smith noted that (when seasonally adjusted) it was still the sixth monthly trade deficit but it was narrower than expected.
He was cautiously optimistic that the deficit would continue to narrow over the next year as food prices were expected to stay firm.
"New Zealand's mix of largely consumer-focused food exports makes us less vulnerable to weak global growth," he said. "So dairy and meat exports are likely to remain firm."
The fall in the kiwi dollar was also helping.
"If the global outlook was to deteriorate further, a lower New Zealand dollar would likely support the broader export sector," he said.
Smith also noted there were some positive signs on the domestic investment side of the equation.
The figures "revealed a stirring in plant and machinery", he said.
Plant and machinery imports were up 8.5 per cent on a seasonally-adjusted basis and transport equipment imports were up 4.1 per cent.
While this was off a low base it was a good sign as a firming in capital investment was a key prerequisite for ongoing economic growth, he said.
China's economic growth outlook has come under pressure as the trade war with the US has escalated.
It's GDP growth is expected to be 6 per cent - at the low end of official forecasts and the slowest pace in 30 years.
The Chinese slowdown has prompted a number of downward revisions to global growth.
The International Monetary Fund's latest forecast is for 3 per cent global growth next year.