New Zealand needs to expand its export options away from its reliance on China, trade expert Charles Finny told the Covid-19 select committee today.
"As the rest of the world starts recovering, we do need to be looking at ensuring we're not just selling into one market and just relying on one sector," the NZTE board member said.
He told the committee that in 2019, China took 33 per cent of New Zealand's dairy exports, 41.9 per cent of meat and contributed to 58.3 per cent of international education earnings and 13.5 per cent of tourism.
"When China shut down (during the Covid-19 pandemic), all our product going into one market shuts down - immediate crisis."
Mr Finny also pointed out the historical use of trade as a political lever for China to put pressure on export partners.
"If China is buying and no one else is, we sell as much to China as we can right now. By all means trade a lot to China, but if you’re selling more than 25 per cent of your exports to that market, I’d be cautious.
"You go in knowing the risks you’ll take."
Mr Finny also said he expected the Māori economy to be "hit hard" from Covid-19.
"I’d like to see a super-charging of Government effort to boost exports from the Māori economy. We have plenty of resource devoted to this area, but we can coordinate better I believe."
He also said there should be an "immediate restart of export manufacturing".
“I would start it today if possible. They’re a very important part of the export story and if we continue to keep it closed we risk losing international contracts and continue to be harmed in the long term."
As the coronavirus crisis started to hit, in the year to March, exports to our two biggest markets China and Australia were down 11 and nine per cent respectively . Those drops cost a combined $243 million.
However, total exports rose two per cent - a lift to $5.8 billion from $5.7 billion. Imports were also up three per cent, but again down from both China and Australia.
Mr Finny also recommended restarting New Zealand's $5 billion log trade, expanding the CPTPP agreement "as a priority", finishing the UK-NZ free trade agreement as soon as possible and placing new momentum in an EU-NZ free trade agreement.
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