New Zealand agriculture must embrace long-term relationships
with its Asian customers, particularly China, 2011 Nuffield
Scholar David Campbell says.
"Too many New Zealanders misunderstand China and its
potential. It troubles me that so many of us have such a
narrow view on China given they are our No 1 market for the
next century," he said.
The Canterbury man has just completed his Nuffield
Scholarship study report detailing two Asian markets, China
and India, and outlining key market advantages, challenges
and high level solutions to help create sustainable and
profitable future markets for New Zealand agriculture.
In the last decade, New Zealand agricultural exports to Asia
had increased 71% to $NZ6 billion, with China now the largest
of those Asian markets, he said. Growth was set to continue
as Asian economies continued to outpace those of the US or
Europe.
"An increasing proportion of Asia's large population will
develop internationally competitive purchasing power and
consumers will be more able to afford the safe, high quality
and innovative foods that New Zealand agriculture is capable
of producing," he said.
Mr Campbell spent March to August last year overseas as part
of his scholarship. Being so far away from his usual life and
work at Synlait was a great part of the challenge and
experience, he said.
China was described as New Zealand agriculture's No 1 market
for the next century due to its ongoing economic strength,
population dynamics and government policy direction.
The New Zealand-China Free Trade Agreement (FTA) and New
Zealand's reputation for high standards of food safety
represented key market advantages, Mr Campbell said.
However, New Zealand also faced challenges in understanding
and engaging with Chinese customers, including language and
cultural barriers, low purchasing power parity, New Zealand's
lack of capital and scale and Chinese government processes.
"My four key solutions for China are: get closer to the
customer, build relationships, extend the value chain with a
'One World' approach, and get clear on strategy so we focus
our attentions on what the customer wants and how we can add
value for them.
" China is setting up long-term strategic partnerships and
supply chains around the globe. They're demonstrating they
want to engage with the world.
"New Zealand has natural advantages and a great reputation in
agriculture, so it makes sense for China to look for
agricultural investments and relationships here."
One of New Zealand agriculture's key advantages over its
competitors at the moment was the country's status as the
first OECD nation to sign a free trade agreement with China.
"But we're missing out on some of the benefits that the FTA
has created because of an apparent fear of Chinese
investment. We're really short of capital, and China has lots
to invest.
"So we have to marry the two together - take the capital and
the pathway to market, concentrate on what we do really well
or where we have unique advantages, and commit to mutually
beneficial relationships. If we're too narrow-minded in our
view on China, they will look elsewhere and we will miss out
forever."
India represented a significant potential market, worthy of
development and investment, but was a much smaller market
than China, he said.
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