Agreement to increase China trade

Prime Minister John Key and Premier Li Keqiang exchange banknotes in Beijing. Photo / AP

John Key plans to boost official presence in Beijing as links between two countries grow.

New Zealand and China have increased the goal for two-way trade to reach $30 billion by 2020 at a meeting between Prime Minister John Key and China's President Xi Jinping last night.

Mr Key has also told President Xi that the Government will boost its staff numbers dedicated to China - one of the key recommendations of the Government report into the handling of the Fonterra botulism scare last August.

The new goal is up from the target of $20 billion by 2015 - a goal set to be exceeded after trade figures came in at $18.2 billion last year and hit record highs in January.

Mr Key said the increasing links and trade meant it was important to invest in resourcing New Zealand's presence in China more heavily.

The Government will also spend $40 million to build a new Embassy in Beijing.

The new announcements will see the Ministry of Foreign Affairs and Trade set up seven new positions, and employ a Public Affairs manager and adviser based in Beijing. The Ministry of Primary Industries will also add nine people to its China office.

Mr Key said further announcements for other government agencies would be made closer to the Budget. The boosts follow a recommendation by the Government inquiry team into the botulism scare that it step up its resources in China to build up trust and provide for quicker handling of problems.

Mr Key dined with President Xi following their meeting - the first such dinner hosted by China since David Lange visited in the late 1980s.

He left Beijing, Mr Key said, knowing the relationship "has never been stronger". Mr Key has hosted President Xi in New Zealand in 2010 before he became President. It is possible he will return around the G20 summit in Australia in November.

Tourism will be the focus for Mr Key today in Shanghai. In the past year, 240,000 Chinese visited New Zealand, more than the United Kingdom for the first time.

China and NZ
• Current goal for two-way trade: $20 billion by 2015.
• New goal: $30 billion by 2020.
• Two-way trade in 2013 was $18.2 billion - up 25 per cent from 2012.
• Exports to China were $10 billion in 2013, up 45 per cent.
• Almost half of the exports were dairy.

Key concentrates on 'deliverables', not delivering punchlines

When it comes to China, Prime Minister John Key holds back on the jokes he often peppers in to warm up an audience.

It is the one country where the Prime Minister stays right on script. The jokes he uses to put an audience at ease before a speech are clearly deemed a minefield in China, where the New Zealand art of taking the mickey runs the risk of offending.

Speaking to students at the China Agricultural University, Key had to settle for getting a laugh after forgetting he had a translator and giving a lengthy answer to a question, only to then apologise to the frantically scribbling translator.

His diplomacy slipped only once - when he was asked by New Zealand media about New Zealand's 100 Per Cent Pure logo, which had been criticised by the Xinhua news agency in the aftermath of the botulism scare.

Key answered by saying that with all due respect to Beijing, New Zealand was certainly 100 per cent pure compared to a city with soaring pollution levels.

The food safety message was only part of his trip.

The other purpose was what the officials like to call "deliverables".

China has taken to calling New Zealand a "friend". Key tends to stick to the more business-like "partner".

Whichever it is, Key heads to Shanghai today with a clutch of "deliverables", brandishing them as evidence that China's leadership had accepted the assurances over food safety.

That evidence was plentiful - the dinner with President Xi Jinping, the currency exchange agreement, the decision to lift the two-way trade to $30 billion by 2020.

While the jokes might be out, Key did take one risk. Despite being pestered by ongoing questions about Judith Collins for tasting and praising Oravida's milk in China, Key went out on a limb by tasting a new UHT milk Fonterra is producing.

The media pounced, he declared it "great" and laughed, before hastening to add, "It was a promotion, not an endorsement".