The global market place of usually dynamic, some of the factors that determine the trends of global market trends include foreign relations, involvement in regional trading and politics, international trade agreements and financial crises. Bilateral trade treaties are an integral element of global trade between two countries (Jian & Shujie, 2006). This paper provides an overview of how the export opportunities for New Zealand are likely to change over the course of the next decade putting into consideration its trade relationship with China.
In order evaluate effectively the trends of export opportunities for New Zealand in China, it is imperative to carry out an analysis of the market opportunities available in China that New Zealand can exploit in bit to increase its export trade with China. With its huge population, increasing levels of income and intense urbanization, China has emerged be one of the largest consumption markets at the global arena (Jian & Shujie, 2006). This is due to the fact that the government of the Republic of China opted to readjust resource allocation, which in turn fostered more consumption and minimal accumulation of capital. The outcome of this is that the funds within of China and its people are steadily increasing, which in turn increases the Chinese purchasing power. Higher incomes among the Chinese people, implies that there are dramatic changes in their lifestyle. The principal argument is that China’s economic strength is ever increasing, and that its improved living standards are creating an avenue for a market that is characterized with a high purchasing potential that New Zealand must make effective use during its trade partnerships with China. In addition, the government of China is laying emphasis on the aspect of self-reliance; this in itself is an export opportunity for New Zealand (Deepak & Shantong, 2004). The recent economic trends in China that provides an opportunity for New Zealand exporters is through China’s strategy that importation is the only way to achieve economic development and increase the rates of consumption. The rapid and steady increase in Chinese imports implies that China is huge market that has various business opportunities for a vast New Zealand’s exporters. Economic calculations predict that China is on the verge of becoming the globe’s largest economy, and this has a significant impact on the opportunities for New Zealand to conduct export business with China (Mona & Shepherd, 2011).
The export opportunities in China are due to the rapid economic growth in China that is projected to continue steadily in the coming decade, and the availability of manufacturing base in China, which is cheap, from which New Zealand can exploit to sell its exports to China. From the perspective of the manufacturing sector, China has been for a long time been distinguished in terms of its economic structure and strength. The outcome of this is that China is constantly becoming a competitive manufacturing sector in the present global market place.
This implies that export opportunities in China for New Zealand is bound to incorporate the intense export of manufacturing goods and services such as machinery, equipment and modern technology. This change in export opportunities in China is due to the fact that the central government and its respective local governments are laying emphasis on the development of infrastructure in the energy, transport and communication sector (Scott, 2010). In addition, food processing plants are becoming a key requirement in Chinese in the next decade.
This economic developments imply that China is will be in dire need of technology, equipments and the appropriate machinery because the country cannot meet this needs internally, and the only solution for such is through importation; which in turn presents itself an export opportunity for New Zealand. In this context, New Zealand is significantly looked upon by China in the provision of technology and equipments for food processing. For instance, New Zealand is one of the global leaders in technologies and equipment used in the meat processing industry. Therefore, over the course of the next decade, China will be an export opportunity for exporters of such kind of products (Scott, 2010). The following graph represents the economic growth in China since 1952. The increasing trend in economic growth implies that export opportunities for New Zealand are increasing.
The rapid urbanization in China is gradually replacing the traditional conventional farming in China. This has resulted to lifestyle change in China coupled with economic growth. The outcome of integration of economic growth and lifestyle change results Chinese are becoming big spenders in aspects such as entertainment, arts, modern clothing and western foods. As such, this presents an export opportunity for New Zealand to exploit by supplying them with their needs[ CITATION Deerk \l 1033 ].
Another perspective to view the trends in which the export opportunities for China will change is due to the need for advancement in economic construction, this implies that China will be in dire need raw materials and other intermediary goods, which the country cannot develop in the short run and can be easily acquired through importation. In China, New Zealand is well known for its rich supplies of coal, wool products, wood and pulp, and aluminum. Since there is an increasing demand for this products in China in the coming decade, this presents itself as an export opportunity for New Zealand to exploit and sell its products to China, especially the goods that China are short of, and play an integral role in its manufacturing economy (Mona & Shepherd, 2011).
Another change in the trends of the export opportunities in China for New Zealand is due to the increase in the living standards of the Chinese people. As a result, the lifestyles of the people of China are witnessing a transformation from the traditional lifestyle to the contemporary lifestyle, whereby they are laying more emphasis on diet, health and more entertainment. The Chinese increasingly desire to travel more, try more natural clothing that is of high quality and other foods that are different from the traditional Chinese culture. In the next decade, the demand for dairy and meat products, clothing and cosmetics are bound to increase. This is a perfect export opportunity for New Zealand due to the fact New Zealand is one of the global leaders in dairy and meat products. In addition, China is witnessing a transition whereby cheap labor will no longer be a characteristic of the Chinese economy, owing to the fact that Chinese are becoming wealthier, resulting to more spending in quality products (Jian & Shujie, 2006).
A significant milestone that will have an effect on the trends of export opportunities for New Zealand in China is due to Free Trade Agreement between China and New Zealand that was initiated in 2007. This meant that all tariffs on goods from New Zealand will be phased out. This will come to the advantage of New Zealand and provide an opportunity for New Zealand to exploit on their exports to China. In addition, the trade liberalization policies of China provide a framework through which New Zealand can conduct their business effectively with China. In addition, the government of China strategy in fostering stimulus spending aims towards increasing domestic consumption, which in turn will increase the export opportunities for New Zealand (Jian & Shujie, 2006).
The integration of increased wealth of the Chinese, population, westernization and intense urbanization will result to an increase in the consumption levels and demand in China. This implies that export opportunities in China will increase during the next decade. Therefore, the exporters form New Zealand has the responsibility of establishing appropriate strategies in order to address the diverse needs of the Chinese demands and overcome the barriers associated with such kind of trade.
Deepak, B., & Shantong, L. (2004). China and the WTO: accession, policy reform, and poverty
reduction strategies. New York: World Bank Publications.
Jian, C., & Shujie, Y. (2006). Globalization, competition and growth in China. New York:
Mona, H., & Shepherd, B. (2011). Managing Openness: Trade and Outward-Oriented Growth
After the Crisis. New York: World Bank Publications.
Scott, J. (2010). Researching export opportunities into China and other Asian countries. Sydney
: Horticulture Australia.