The Indian connection gets critical for growth

New Zealand has vital political, security, trade and economic interests in Asia.

Dynamic growth in the Asian region is expected to continue over the medium term, fuelled by growth in China and India.

No other region will provide as many opportunities for New Zealand over the next decade or two. In the future, we will find ourselves dealing with a region, which will carry greater global weight. The competition for Asia’s attention is intensifying.

If New Zealand is to keep pace with developments in Asia, we will have to lift our game.

In our favour is much goodwill in the region towards New Zealand.

Our ties with Asia are longstanding and active across many sectors, both governmental and non-governmental. But the onus is on New Zealand to accelerate the tempo of these relationships.

Asia’s sheer size and diversity means that there can be no single approach to dealing with it. The region contains the world’s two most populous nations, a rich collection of cultures, religions and societies, and varied political and government structures.

Our relations with Asian countries vary widely, with some new and some longstanding links. We must take care not to neglect old friends in an effort to take up newer opportunities. Two key elements underpin New Zealand’s Asia strategy:

New Zealand must invest more time and effort into strengthening its ties with Asia. No matter what the area of interest – business, politics, education, culture – building strong relationships is vital;

New Zealand needs to look at ways in which it can build a greater shared future in the region, making a bigger contribution to Asia as well as focusing on what we can gain for New Zealand. Naturally, we would like to increase our trade and investment links – but it has to be more than just that.

There are four specific challenges that New Zealand must tackle if we are to succeed in Asia and, by implication, globally.

Better integrating ourselves into the region

The countries and economies of Asia are becoming progressively more integrated.

They are strengthening regional collaboration and taking steps towards new mechanisms for political co-operation. Any new regional architecture in Asia will have important implications for New Zealand.

We need to continue engaging actively to ensure our participation in decisions that are vital to our future.

We seek to be part of emerging regional structures. New Zealand faces risks from the development of bilateral and other regional trade agreements in which it is not included.

We need active and regular engagement with Asian countries in areas of common interest. We have to develop a sense that our interests and the interests of the region are intertwined.

And we need to highlight what we can offer the region so that Asian countries can see benefit in engaging with us.

This will require effort from the Government, business, the education and science communities, local government, the cultural sector, NGOs and many others.

A good neighbour

To build a constructive future with Asia, we must act as a good international citizen and a good neighbour.

Being a good neighbour means working with Asian countries and regional groupings to develop stronger shared interests to (a) maintain regional security and stability (b) address trans-national issues of concern to the region (c) build up scientific knowledge and expertise in environmental protection (d) support development in poorer nations – after the Pacific, Asia is our top priority for official development assistance (e) protect and promote human rights.

Boosting New Zealand’s growth by linking to the growth of the Asian economies

New Zealand businesses are not participating as fully as they might in the growth of Asia’s economies.

Despite rapid economic growth in the region, New Zealand’s goods exports have not shown growth in New Zealand dollar terms since 2001.

Undoubtedly, however, the high rate of our dollar in recent times has been a factor in that.

Tourism and education face intense competition from other countries. Investment flows are much smaller than they could be given the prominence of Asia in our trade profile, even though we are one of the easiest countries in the world in which to set up and run a company.

A 2007 survey of Asian businesses reported that New Zealand business people were well regarded and seen as trustworthy by Asian counterparts, but their Asia-related skills in language and culture were perceived to be low.

Our tourism sector emphasises New Zealand’s image in the Asian region as “clean and green” but we also have to communicate the message that we can – and do – offer a lot more, particularly when it comes to trade, investment and education.

To link ourselves more closely to the growth and dynamism of the Asian region, and so boost our productivity and global competitiveness, the Government needs to (a) raise awareness in Asia of the benefits of investing and doing business in New Zealand, and more effectively “brand” New Zealand as an innovative economy (b) invest more in building a reputation for quality, value and having a welcoming environment in tourism and education, our two most successful service exports (c) improve support for business connections between Asian countries and New Zealand (d) enhance access to markets through trade agreements (e) build the skills and capacity of New Zealand businesses to engage in Asia (f) build collaboration between Asian and New Zealand business institutions such as chambers of commerce and industry associations.

Asia literates

At home, New Zealanders are coming into increasing contact with Asia and its people, through short-term visitors (students, tourists and business people) and through immigration from the region. Nine per cent of New Zealanders identify themselves as Asian; the figure is 19% for Auckland.

New Zealanders need to become more “Asia literate” so we can better engage with the region in which we are increasingly making our living. We need more New Zealanders who are confident in their dealings with Asia and Asian societies, and that will only come through greater familiarity and knowledge of the region and its peoples.

New Zealand can become more Asia literate by developing Asian language and cultural skills must become a priority and more in-depth reporting from Asia is needed in our mainstream media.

This would lift our understanding of the region.

Executive Summary of Our Future with Asia, Ministry of Foreign Affairs and Trade

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