New Zealand Institute of Economic Research (Inc)
Media Release, 23 September 2026
For immediate release
China has been one of New Zealand’s great economic opportunities, but the conditions that produced the China boom are changing, according to a new NZIER Public Good Insight released today.
“China’s emergence into the global economy was an extraordinary opportunity for New Zealand, and we were unusually well placed to take advantage of it,” says Chris Nixon, Principal Economist at NZIER and author of the report.
“But the China dividend has always been about much more than selling New Zealand products into China.”
The Insight argues that New Zealand has benefited from China as a customer, a supplier and an engine of global growth. Rapid Chinese growth increased demand for New Zealand’s exports, while its emergence as a manufacturing powerhouse provided households and businesses with access to a wide range of competitively priced imports. Chinese growth also stimulated demand in other markets for New Zealand goods and services.
“Exports are the most visible part of the relationship, but they are only part of the story. New Zealand households and firms have benefited from Chinese imports, investment, and tourism.”
The report also highlights the importance of New Zealand’s early engagement with China. Economic reform left New Zealand exporters well positioned to respond to new opportunities. At the same time, the 2008 New Zealand-China Free Trade Agreement helped build the market access, regulatory arrangements and institutional relationships needed to turn those opportunities into trade.
“Being first helped, but maintaining the relationship has mattered just as much. Market access is not something that is negotiated once and then forgotten.”
The Insight argues that the FTA has been about much more than tariffs. Regulatory cooperation, sanitary and phytosanitary requirements, product standards, certification and the ability to resolve practical market-access problems have been particularly important for New Zealand’s agricultural exporters.
But the economic environment is changing. China’s economy is maturing and growing more slowly, while geopolitical tensions and growing protectionism are making international trade less predictable. The exceptional growth in the trading relationship over the past two decades cannot be assumed to continue or replicated elsewhere.
“There probably isn’t another China waiting in the wings. China combined extraordinary scale and growth with increasing openness and strong demand for products New Zealand produces competitively. That combination was exceptional.”
NZIER argues that this changes the way New Zealand should think about diversification. Reducing trade with China to lower its share of New Zealand exports could impose real economic costs if alternative markets offer lower returns. Instead, diversification should focus on developing additional commercially attractive markets alongside China.
“Diversification should mean addition, not subtraction. The objective should not be to make China smaller in our trade figures, but to make other markets bigger.”
India, ASEAN, the United States, Europe and other markets will all contribute to future opportunities, but none is an obvious replacement for China. NZIER concludes that the next generation of trade growth is therefore likely to look different from the last.
“The task is to protect what New Zealand has built with China while creating opportunities elsewhere. The next generation of trade growth is unlikely to arrive in one large package. It will probably be built market by market, barrier by barrier and opportunity by opportunity,” Nixon says.
For further information, please contact:
Chris Nixon
Principal Economist
021 633 127
chris.nixon@nzier.org.nz
