The China dividend: protecting gains and finding the next opportunities - NZIER Insight 130

New Zealand’s trading relationship with China has been one of the great economic opportunities of the past generation. China’s rapid integration into the global economy created strong demand for New Zealand exports, provided households and firms with competitively priced imports, and supported growth in markets worldwide.

New Zealand was well placed to capture these gains, with economic reform, the 2008 FTA, and sustained investment in regulatory and commercial relationships helping to turn opportunity into trade.

But the circumstances that produced the China boom are changing. As China’s growth slows and the international trading environment becomes less predictable, the challenge is not to retreat from a successful relationship, but to protect the gains while building new opportunities elsewhere.

Diversification means adding markets, not abandoning China, with future trade growth likely to be built market by market, barrier by barrier, and opportunity by opportunity.

NZIER Insights are short notes designed to stimulate discussion on topical issues or to illustrate frameworks available for analysing economic problems. They are produced by NZIER as part of its self-funded Public Good Programme. The purpose of NZIER’s Public Good Programme is to inform debate and educate on important economic and policy issues facing Aotearoa New Zealand. More information on NZIER’s Public Good Programme can be found at https://www.nzier.org.nz/public-good.