New Zealand may be looking at its trade relationship with China through rose-tinted glasses, says Michael Every.

Rabobank's Head of Financial Markets Research Asia-Pacific told Jamie Mackay that the rest of the world has a very different view.

Today on The Country, Every painted a bleak picture of the "ugly, ugly, ugly" plight of the global economy and said the situation was not helped by trade war tension between China and the US.

In fact, Every said the two countries were heading for a cold war, which "New Zealand just doesn't want to wake up to".

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Mackay: I said to you it's very uncertain times in the world at the moment. We've got Trump. We've got Trump versus China. We've got Brexit, we've got trade wars, we've got tariffs - you name it there's so many headwinds against free trade around the world. But you're suggesting the problem is not Donald Trump, the problem is China - and we refuse to recognise it in this country.

Yes very much, thank you for summarising my opinion there. That is the crux of the problem. What I've said time and again to you wonderful farmers down in New Zealand
and over the Tasman in Australia, is that you are the lucky ones. You have great products. China will buy everything that you're producing and pay you a good price for it, and for you, China is a fantastic opportunity and it has been for years.

But you are the exception. For nearly everybody else, particularly in developed economies in the west, all China does is sell and not buy.

PM Jacinda Ardern meets Chinese President Xi Jinping at the Great Hall of the People in Beijing in April this year. Photo / Supplied
PM Jacinda Ardern meets Chinese President Xi Jinping at the Great Hall of the People in Beijing in April this year. Photo / Supplied

So imagine if China for example, was suddenly to move into the dairy trade or the meat trade in a big way, and the Chinese Government were to say that 'we're going to be the world's number one producer of milk and cheese and meat. Regardless of the fact we're not very good at it, we're going to throw science and money at it until we can undercut you by 50 per cent.' How much would you like China then? And that's what just about everybody else faces in just about every other industry. And that's the root cause of a huge amount of these tensions, and why we're seeing everything gradually collapse everywhere.

Mackay: Surely though, China hasn't got the physical and natural resources to produce vast amounts of milk and meat?

No it doesn't, and I'm using this as a hypothetical. I'm not saying they will do that specifically. What I'm saying is every other country in every other industry, apart from you guys in your industry, feels they're getting screwed by China rather than making a lovely wad of cash off of China.

And as a result - you can continue to cling to this life raft saying 'free trade's wonderful' - well it is for you - and it isn't for many other people. And guess what? They're the guys who set the rules, because you're small and they're big.

So you can cling to this life raft, as I said, saying 'hey, wouldn't it be wonderful if we all just traded freely with each other?' Yeah it would. Donald Trump's saying the same thing to China and they won't listen. Which is why we are heading rapidly for an escalating trade war which is actually turning into an unpleasant cold war. In fact China's just warned its citizens not to go on holiday to America.

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So all manner of nastiness is flowing out of this, and I repeat - it's not being caused by Trump, it's being caused by China - and unfortunately New Zealand just doesn't want to wake up to that.

Rabobank's Head of Financial Markets Research Asia-Pacific, Michael Every. Photo / Supplied
Rabobank's Head of Financial Markets Research Asia-Pacific, Michael Every. Photo / Supplied

Mackay: So effectively what you're telling me, and I'm just having to do a double take on this one Michael Every, is that Donald Trump is potentially a knight in shining armour?

I've said similar things to other people and they're always gobsmacked and I want to make it quite clear, that there's a very, very long list of things that Trump has done and said and is, that I don't agree with. So I'm not trying to be a flag waver on this show or anywhere else.

All I would say is that if you don't like those things that Trump is doing, that doesn't automatically mean he's wrong on China. And on this particular front, and it's a very, very important front, both within America and globally for all of us - in fact you could argue it's historical and almost existential - I happen to think that he's right.

Listen to the full interview below:

Also in today's interview: Every looks at whether the trade war between the US and China could lead to a recession and what that could mean if New Zealand was forced to chose sides.