When the Asia New Zealand Foundation was established in 1994, about 3 per cent of New Zealand's population identified themselves as Asian. By the time of the 2013 Census, that had grown to a figure of nearly 12 per cent - a remarkable change in the composition of our society.

The reality of this change is no more apparent than in Auckland, where at the last Census 23 per cent of the population was of Asian descent.

Complementary to these changes in ethnic composition has been the change in New Zealand's place in the world. Our eurocentric reference point in trade has been transformed in the past 20 years. New Zealand has now become part of the Asian sphere of economic - and increasingly strategic - influence.

China has emerged as NZ's No 1 export destination, and six other Asian countries are in the top 10. Asia is New Zealand's largest source of immigrants and a significant source of tourists and students.

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In 20 years, New Zealand has emerged from a eurocentric, Anglo-Celtic society to one that includes Asian communities and embraces Asian cultures in a way that previous generations simply would not have conceived of. This is in sharp contrast to our history, which has not always been distinguished in its treatment of minorities. In the early 20th century, Chinese settlers suffered the inequities of poll tax and over the decades were disadvantaged by many other discriminatory laws. It wasn't until 1987 that New Zealand introduced a skills-based immigration policy.

The remarkable changes of the past 20 years should be seen in perspective against this background. New Zealand is not perfect, but we do now have a multicultural society based on a bicultural heritage. This was very much a dream for Don McKinnon and me when we founded the Asia New Zealand Foundation - then Asia 2000 - in 1994.

The foundation was established with the mandate of increasing New Zealand's knowledge base about Asian countries, which it has done through business, culture, education, media and research programmes and a leadership network.

We are proud of the contributions we have made in bringing Asian cultures into the mainstream. Asian Kiwis are no longer looking through the window from the outside. They are embraced and included in all walks of life - politically, commercially and culturally. This is nowhere better illustrated than at Auckland's Lantern Festival and Diwali, which have grown to become iconic events enjoyed by hundreds of thousands of people annually.

New Zealand has been more successful than almost any other country in adjusting to the changing ethnic composition of our society. Since 1997, the foundation has been tracking New Zealanders' attitudes through surveys, and these show a high degree of tolerance and inclusion that we can take pride in.

This puts New Zealand in good stead for decades to come. As a country we are going to be increasingly integrated into the Asian sphere of influence. That has to be seen as an opportunity, not a threat. It will not always be an easy process, as reflected in debates about issues such as foreign ownership. Clearly, a capacity for friction and suspicion remains, which is unhealthy and unhelpful.

Education is the best tool for handling these challenges. In this respect, we have a long way to go. New Zealand's monolingualism is symbolic of a continued failure to fully recognise the realities of the changes that have taken place. It would probably represent the greatest challenge to New Zealand in our engagement with Asia.

Though we have come a long way in 20 years, our relationship with Asia is not a done deal. Our comparatively isolated and insulated society presents challenges to our capacity to engage with countries in the region.

We are going to have to take an increasingly proactive attitude to meet the changes and dynamics taking place in Asia, and here in New Zealand.

• Philip Burdon retires as chairman of the Asia New Zealand Foundation, a position he has held since 2007, at the end of this year.