Prime Minister John Key was yesterday playing up his
relationship with China's leaders after trade data showed this
country's two-way trade with China had exceeded $20 billion for
the first time.
Mr Key is already planning for two-way trade to exceed $30
Statistics New Zealand figures show May trade data in surplus
for the seventh consecutive month, although the balance of
$285 million was below the expectations of some commentators.
Imports in May were $4.3 billion and exports were $4.6
The annual balance was $1.37 billion.
However, it was the annual China trade figures which allowed
Mr Key to take some of the credit.
In 2010, two-way trade between New Zealand and China was
worth $10 billion with New Zealand's exports to China worth
''At that time, the then-Chinese premier, Wen Jiabao, and I
agreed on the ambitious target of doubling two-way trade to
$20 billion by 2015.''
Figures out yesterday showed New Zealand was exporting more
than $11 billion worth of produce to China and two-way trade
had already exceeded the goal of $20 billion, Mr Key said.
''The growth is showing no signs of slowing and that is why
in my visit to Beijing in March, President Xi Jinping and I
set an ambitious new goal for trade. We are now aiming to
reach two-way trade of $30 billion by 2020.''
New Zealand's economic relationship with China had deepened
markedly in recent years, he said.
Rapidly escalating demand from China had come as its citizens
became wealthier and turned to higher-quality products. As a
high-quality food producer, New Zealand was well placed to
meet that demand, Mr Key said.
ASB chief economist Nick Tuffley warned New Zealand's overall
trade was likely to moderate over the rest of the year.
In May, dairy export price falls of about 7% were balanced by
strong dairy export volumes, which were up by the same
amount. The strong end to the dairy production season should
cushion to a degree the fall in dairy export values over the
next two to three months.
Beyond that, the dairy price falls would be the sole
influence on dairy export values.
In other export sectors, meat and forestry values recorded
strong falls of 7% and 9% respectively, mainly because of
falling export volumes, he said.
Import values were 6.2% higher in May compared with May last
year. Capital imports continued to lead the way, driven by
the purchase of equipment for the Canterbury rebuild, as well
as the commodity export boom.
Households continued to show constraint and spending on
imports was lagging the rest of the economy.
Mr Tuffley still expected the Reserve Bank to lift interest
rates next month before pausing until December.
''Continued restraint on behalf of households will be a key
factor shaping the extent of interest rate rises over the
next couple of years. Our view is interest rates will rein in
households faster than both the Reserve Bank and markets
expect at this stage,'' he said.