Economy is focus for Hickey's talk

STEAMING: Bernard Hickey, financial commentator, says even though China's growth might fall, it would still boost New Zealand. PHOTO/DUNCAN BROWN

Smartphones are "deflationary steam engines" says financial commentator Bernard Hickey.

Likening them to how steam engines dropped prices and costs of production in the Industrial Revolution, new technology was suppressing prices across industries.

Showing centuries-old graphs, he said the world was probably entering an era when low inflation with economic growth was the norm.

He said Hawke's Bay was where his mother's Keogh family were based and his "second home".

Speaking at the Napier War Memorial Conference Centre, the building where his uncle and aunt were married, he told a Napier City Council business breakfast yesterday morning that Jetstar's upcoming flights to Hawke's Bay would further increase the positive affect Auckland growth had on the Bay.

"Auckland and Hawke's Bay have a lot of connections," he said.

Hawke's Bay stood to gain from increased Chinese tourism, with a rise in the number of direct flights to Auckland bringing independent Chinese travellers.

Many looked to escape air pollution with a "lung-washing holiday".

Lowering economic growth was not as big a threat to the national economy as many feared, he said, because its economy was now so much bigger.

Even if China's growth was 5 per cent this year "the amount of growth you get from 5 per cent is the same now as 12 per cent growth was in 2007".