New Zealand exporters feast on China's vast market

By Gyles Beckford

WELLINGTON (Reuters) – China has become New Zealand's biggest export market in the first quarter, adding lustre to their economic links since they inked a free trade deal five years ago and providing a vital source of growth for the South Pacific nation.

New Zealand was the first developed economy to sign a free-trade agreement with China in 2008, and since then exports have roughly tripled to NZ$7.4 billion ($6.3 billion).

Official data on Friday showed exports to China rose 32 percent in the 12 months to March as the world's second biggest economy bought increasing amounts of logs, meat, and dairy produce, displacing Australia as New Zealand's biggest export market.

"This largely reflects the growing demand from China, as its growing middle class results in increased demand for protein. New Zealand is well positioned as a food producer to address that growing demand," said ASB Bank economist Christina Leung.

New Zealand shops have long been crammed with cheap Chinese goods, making it the country's biggest source of imports, worth NZ$7.8 billion in the year to March.

Overall, two way trade still sees neighbouring Australia as New Zealand's biggest trade partner, but over the past year the total has fallen 1 percent while two way trade with China is up 12.8 percent.

New Zealand and China are aiming for two way trade of NZ$20 billion by 2015, a target reaffirmed when Prime Minister John Key visited with a large trade delegation earlier this month.

"New Zealand's post-free trade agreement trade and investment growth with China has helped to lessen the impact on New Zealand from theNike Zoom Assersion EP