China growth and Australian investment key for NZ

The growth of China's middle class is crucial to economic growth in the Asia-Pacific region, said New Zealand Prime Minister John Key in his speech in Sydney yesterday.

At a Trans-Tasman Business Circle event, Mr Key said that the number of middle-class Chinese would reach three billion by 2030, up from half a billion currently; as compared to Europe and the United States, where growth was not expected to be as dramatic.

"I think that when it comes to New Zealand and Australia, the challenge is how you move up the value curve, and how you can be successful in those countries," Mr Key said.

Both countries have free-trade agreements in place with China since 2005 and 2008 for Australia and New Zealand respectively. China is also Australia's largest trading partner and is New Zealand's second largest (after Australia). Conversely, neither country is part of China's top eight trading partners - its two biggest partners by volume of imports of exports are the European Union and the US.

Tapping into the Asian market would be one of New Zealand's major goals over the next few years, along with establishing closer ties with Australia, enhancing its competitive edge and further developing its broadband infrastructure, said Mr Key.
"The two things that are going to change Australasia as we know it are going to be economic growth in Asia and the internet," Mr Key said.

"If you don't have an e-strategy in business, then you should get out of business or get someone who's going to give you one, because you will fail [otherwise]."

He also talked about strengthening the trans-Tasman relationship, calling on Australian businesses to invest in his country.
"Our government needs to create jobs ... but in the end we need you to invest and take some risks by putting your investments in New Zealand."

This comes off the back of recent earthquakes in Christchurch and rebuilding efforts, which is estimated to cost around 1.5 per cent of New Zealand's GDP over the next five years.

Mr Key said that some areas Aussie businesses could invest in were food production, manufacturing and tourism.

"New Zealand faces a relatively favourable set of circumstances and opportunities. From what I can see, so does Australia. It's now a matter of making the most of the opportunities that are out there."

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