Route to China via food safety technology
OPINION: No-one does diplomacy by press statement quite like the Chinese.
This week’s state visit by the country’s second most powerful politician, Premier Li Keqiang, produced an epic outpouring of announcements.
The big ones included a date for upgrade negotiations on the nineyear-old China-New Zealand free trade agreement to begin and a chilled beef export trial.
There were new technical cooperation announcements on climate change and freshwater policy, and on educational exchanges.
Reflecting the explosion in tourism growth from China, the quota of weekly flights allowed between New Zealand and China rose again and 2019 was declared an official ‘‘year of China-New Zealand tourism’’.
The challenge for New Zealand will be finding enough beds for the extra arrivals as Chinese travellers dutifully book trips to Aotearoa in the same way that they turned out with flags outside Premier House in Wellington on Sunday afternoon, and disgorged in droves before dawn on Monday for a breakfast function at the Chinese embassy.
It’s no accident that the New Zealand Government unveiled its trade policy upgrade just before Premier Li’s arrival, aligning with China to the extent that both countries seek a new commitment to global trade liberalisation at odds with the new American protectionism.
Much was also made of how New Zealand might fit into China’s global ‘‘belt and road’’ strategy, which seeks creation of new, more efficient supply chains to facilitate global trade flows.
This matters to China particularly because the first chapter of its economic growth miracle is over, its growth rates are slowing, and its ability to keep trading with the rest of the world needs to be based in future on more than just competitively priced goods.
As a Nikko Investments seminar in Wellington last week heard, China continues to be vulnerable to far lower growth and perhaps even recession over the short to medium term.
In less developed economies, ‘‘belt and road’’ tends to mean investment in roads, rail, ports, and the like.
That gave early credence to NZ First leader Winston Peters’s claim that China Rail had held ‘‘secret’’ talks to build new rail links in Northland. That placed Peters in an interesting bind – welcoming investment in rail while criticising its source – but he was wide of the mark.
The reality of ‘‘belt and road’’ for countries like New Zealand is more likely to resemble a collaboration announced between Chinese e-commerce giant Alibaba on Tuesday and partners in Australia and New Zealand, including Fonterra.
Alibaba will use New Zealand and Australia to develop a new global tracking system to help guarantee food safety and quality – a major source of distrust among Chinese consumers.
The concept is to use the socalled ‘‘internet of trust’’ blockchain technology underpinning Bitcoin to create irrefutably transparent food supply chain verification that Alibaba hopes will make customers more willing to buy food online.
‘‘We see the New Zealand and Australian markets setting the tone for the rest of the world when it comes to integrity, safety and quality of food supply chains,’’ said Alibaba’s managing director Australia and New Zealand, Maggie Zhou.
Alibaba says existing trust in both the New Zealand and Australian food industries’ integrity among Chinese
Fonterra's involvement is particularly interesting.
consumers is the reason for running the pilot here, although nothing so significant could be happening without a nod from Beijing.
Fonterra’s involvement is particularly interesting. While the co-operative’s statement on the Alibaba programme adopted a cautious tone – it has invested heavily in its own food safety systems – this was clearly an initiative it had to be part of as such a major exporter to China.
It is here – in our experience as a food trading nation at improving the speed, efficiency and trustworthiness of goods as they cross borders, rather than big dollops of cash for infrastructure – that New Zealand’s deepest engagement with ‘‘belt and road’’ is likely to evolve. –BusinessDesk