New Zealand can thank its close political relationship with China for its booming dairy exports there.

Th was the clear message from a top Chinese Agriculture official at a Wellington conference yesterday which looked at China’s growing agricultural industries.

Zao Weining, the deputy director of China’s Department of International Co-operation in the Ministry of Agriculture said New Zealand’s so-called three firsts — the first to recognise China as a market economy; New Zealand supporting Chinese admission to the WTO and the Free Trade Agreement — were all significant in terms of trading and economic relations.

He told the conference that New Zealand accounted for 63 per cent of China’s milk powder imports.

“I think New Zealand the EU will continue to keep the leading position in the market in China,” he said.

There was much talk at the conference of China;’s policy of food security meaning self-sufficiency.

But Zao told POLITIK  this applied principally to China’s staple foods —  rice, wheat and maize.

He said China was aiming for 90 – 95% self-sufficiency in those foods.

Professor  Carl Pray from Rutgers University in the US told the conference that where China was not self-sufficient, it had a policy of looking for reliable suppliers.

Clearly, New Zealand was one of those.


But it was also clear that what the Chinese delegates called  “win-win” co-operation between the two countries had a strong political dimension.

Zao referred to comments made here in 2014 by President Xi and said New Zealand and China had a great potential for co-operation and should further strengthen it.

“Today we hope this conference will implement that consensus made by our two leaders to construct a comprehensive strategic partnership and to intensify by concrete actions our agricultural co-operation.”

Professor Huang Jikun from Peking University said China’s decision to shift to subsidising its own agriculture over the past decade had produced mixed results.

However, new efforts to deal with those problems could bring its market reforms back on track.

But one private sector participant in the conference, Ben Lin, who imports New Zealand meat, Ben Lin, the president of Wellbright Foods, a food importer with investments in New Zealand warned that New Zealand was in danger of losing out in the Chinese beef market.

He said that though the amount of beef imported from China had increased in recent years, China’s recent re-opening of its market to American and Brazilian beef imports could have a large impact on Australia and New Zealand exporters.

He told POLITIK that one reason for this was that New Zealand was still sending largely unprocessed beef to China.

For that reason, he was not impressed with the Shanghai Maling purchase of the share in Silver Fern Farms.

“They are just doing slaughtering; that is the most basic approach,” said Lin.

“What they need to do is team up with really good research and development people in China to market products rather than just fundamental products.”

He said China consumed a lot of manufactured meat products rather than the basic cuts produced by Silver Fern Farms.

In 2012 his own company had developed a product based on Australian strip loins and as a consequence the prices of strip loins rose by 48%.

The picture that emerged from the conference yesterday was one of a much more sophisticated Chinese agricultural industry and market; where New Zealand would face challenges from growing Chinese production and an increasingly more demanding market.

The days of “ship it and they will buy” have come to an end at the same time as the political relationship has become more complex.

The conference pointed to a more challenging future.