The News North Canterbury - Opportunities in China

Thursday, February 25, 2016

I recently travelled to China as a guest of GMP Dairy to learn about and discuss trade and export opportunities between our two countries.

Fellow National MP Jami-Lee Ross of Botany Electorate in Auckland and I met distributors, sellers and consumers of New Zealand products. We attended and spoke at an Infant Formula Industry Chain Security Alliance Conference.

We also spoke at a China-NZ Trade and Food Safety Conference in Shanghai. China's appreciation of the high quality of New Zealand products and our export processes were highlighted.

Our host GMP Dairy Limited, are a company in Auckland which manufactures and exports infant and adult milk formulas to China.

It quickly became very clear to JamiLee and me that New Zealand products, in particular value-added products like branded milk powders that are specifically targeted to certain age groups from infant formulas to those specifically for the elderly, are incredibly popular with the Chinese.

The Chinese take health very seriously and they are prepared to pay for it.

Organic New Zealand milk formulas in particular are so sought-after that they are no longer marketed because distributors simply do not have enough supply.

While sales of whole milk powder to China have declined over the last year, GMP Dairy report their formula exports tripled last year and are expected to double this year.

I often hear people say that targeting too much of our export market at China is like putting all our eggs in one basket: I would argue this is not the case.

Currently, China accounts for 16 percent of our export market. In comparison, Australia exports 35 percent of their products to China.

It makes sense to take advantage of this opportunity.

I spent time in Shanghai, which has a population of 24 million, and the province of Guangdong, population 120 million.

We're talking about massive opportunities and it is up to us take those up.

There was strong interest in New Zealand chilled meat.

If we are going to make the most of that demand and benefit from valuable export markets like China, we need to understand what the consumer wants.

I was served a New Zealand lamb chop which was the only time I was given a knife and fork. We will have to offer our products in the form and packaging that the customer wants if we are to be successful.

It might not be as simple as other markets but this is where the future lies.

If on the other hand we want to be a trader in commodities, then we will have to accept the wild fluctuations of the commodity markets or we need to change our systems and attitudes.

My visit to China was a hugely valuable exercise and has left me very excited about the future of New Zealand's trade relationship with China.