Handshake puts province on China trade map

RELATIONSHIP: Local Government NZ president and Hastings Mayor Lawrence Yule addresses Chinese President Xi Jinping and Prime Minister John Key during the launching ceremony of the New Zealand-China Mayoral Forum, PHOTO/GREG BOWKER

A handshake between the mayor of Hastings and the Chinese President has helped seal a stronger New Zealand-China business pact 33 years after Hastings entered the first sister city relationship involving the two countries.

Hastings Mayor Lawrence Yule met Chinese President Xi Jinping in Auckland yesterday before the President flew out of New Zealand after a two-day state visit.

Mr Yule's meeting with one of the world's most powerful men was in his capacity as president of Local Government New Zealand and was to sign a memorandum of understanding (MOU) between LGNZ and the Chinese People's Association of Friendship with Foreign Countries aimed at building stronger relationships between the two nations at a local government level.

The Chinese association represents 680 cities in the world's most populous country and Mr Yule said the signing of the MOU was a significant milestone with President Xi noting in his speech that local government bonds were a necessary path to further international relationships.

As well as helping to foster sister city agreements, the MOU put in place a much more strategic relationship between local government in New Zealand and China to support ongoing trade efforts between the two countries, Mr Yule said.

"We shouldn't underestimate the significance of Chinese government relations, whether it's local government or central government," he said.

"We don't quite appreciate it in New Zealand, but a lot of business that gets transacted in China has to be sanctioned by central or local government."

While having official assistance in China benefited New Zealand export companies, at the same time Chinese doing business in New Zealand wanted to involve central or local government, in part because it gave them surety that the deals they were doing were legitimate.

"This MOU is a way of ramping up the relationship and putting it on a more formal basis," Mr Yule said.

"It is hugely significant for the Chinese that even though they have signed free trade agreements with other countries, including Australia, New Zealand was the first one."

China is New Zealand's single largest trading partner and second largest source of tourists.

The first ever New Zealand-China sister city relationship was established between Hastings and Guilin in 1981, a fact that was acknowledged during yesterday's ceremonies.

"Hastings is right up there in terms of the quality of sister city relationships and the amount of interaction that's going on," Mr Yule said.

"I'd say we're punching well above our weight. We might be behind the big cities of Auckland, Wellington and Christchurch, but it wouldn't be by much."

The MOU signed yesterday would give other provincial parts of New Zealand confidence to participate in and develop trade relationships with areas of China, he said.

Hastings will next week host a mayoral delegation from Dezhou City, Shandong Province, as part of a developing relationship between the districts as they look at trade opportunities, including the export of Hawke's Bay honey, meat and wine into the Chinese province.

"The reason they want to have a friendship city relationship with us is because they want a formal government-to-government link at a local government level," Mr Yule said.

"They are the solar capital of China and I see a significant opportunity for us to bring that technology over here."