China-New Zealand FTA upgrade to take effect

Products from New Zealand and Vanuatu are ready to be shipped to the fourth China International Import Expo (CIIE) from the Auckland port in New Zealand, Sept 25, 2021. [Photo/Xinhua]

The Ministry of Commerce announced on Tuesday that an upgrade to China's free trade agreement with New Zealand will enter into force on April 7, paving the way for further economic and trade cooperation between the two nations.

Experts said it marked the latest step in Beijing's bid to enhance regional economic cooperation as well as deepen reforms and opening-up at higher levels.

Wang Peng, a researcher at Huazhong University of Science and Technology's Institute for State Governance, said the upgrade of the free trade agreement marked a new landmark between the two nations since China signed the bilateral FTA with New Zealand in 2008－its first with a developed country.

Wang said the upgraded FTA is part of the country's ongoing efforts to implement its free trade zones upgrading strategy and build a network of high-standard free trade zones with global reach.

"It will help boost confidence in the world economy amid the impact of COVID-19, demonstrating China's firm determination to deepen reforms and opening-up," Wang added.

Wang said the upgraded FTA between the two nations will complement the Regional Comprehensive Economic Partnership agreement signed in 2020 by 15 countries in the Asia-Pacific region including China and New Zealand, as it can tackle specific issues in fields such as digital trade.

Chen Chuanglian, deputy director of the Southern China Institute of Finance at Jinan University in Guangzhou, Guangdong province, said the upgraded FTA highlighted China's concrete move to safeguard multilateralism and build an international environment of peace, openness and win-win cooperation.

"The upgrade protocol emphasizes that China will seek further cooperation in investment in the future, demonstrating that the nation will continue to promote outbound investment and international cooperation," Chen said.

Chen said the upgrade of the FTA will also enhance the two sides' cooperation in fields including trade, investment, aviation, education and finance. And it will be a key guide for the implementation of China's FTZ upgrading strategy and help guide China's further cooperation with other partners.

Zhou Maohua, an analyst at China Everbright Bank, said the upgrade sends a clear signal that China is a strong supporter of multilateralism and free trade, showcasing China's firm determination to promote high-level institutional opening-up.

China, the world's second-largest economy, has become New Zealand's largest trading partner. Bilateral trade between China and New Zealand increased from $4.4 billion in 2008 to $18.1 billion in 2020, with an average annual growth rate of 14 percent, according to the Ministry of Commerce.

Considering the two nations' economic complementarity, Zhou highlighted the great potential and broad prospects for advancing China-New Zealand cooperation.

"The entry into force of the RCEP agreement and the upgraded FTA between the two nations will help facilitate bilateral investment and trade and stabilize the global industrial and supply chains," Zhou said.

"The further cooperation between the two nations will spur the development of upstream and downstream industrial chains, promote reforms of enterprises and boost confidence in the global economic recovery."

Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation, said he expects to see upgraded FTAs between RCEP participating countries, adding that these will help strengthen industrial and supply chains in the region.

China has signed 19 free trade agreements with 26 countries and regions. In 2020, the nation's trade volume with FTA partners accounted for nearly 35 percent of its total foreign trade, up from 12.3 percent in 2012, according to the Ministry of Commerce.

Daniel Mathieson, CEO of Zespri, a cooperative of kiwi fruit growers in New Zealand, said China has shown real leadership in international trade and the company will benefit greatly from the upgraded FTA.

"China has been a major driver of global economic growth, and in particular during the recovery from COVID-19," he said. "China's outlook remains incredibly strong. … China is already one of our largest export markets. We're incredibly confident in China. … We will continue to invest in strengthening our relationships with our partners, consumers and communities in China."

Alex Wong, China country manager of Silver Fern Farms, noted that the upgraded FTA will benefit the peoples of both nations with larger market dividends.

As economic and trade relations between China and New Zealand reach a new level, Wong believed the agriculture industry will also become an important part of China-New Zealand cooperation.

"We are confident in the long-term cooperation between China and New Zealand," Wong said.