Key (subtly) hints at Chinese retaliation

:  Before the rot set in; the Prime Minister and Zespri Chair, Peter McBride in Shanghai in April
 

Though the Prime Minister was yesterday saying it was business as usual with China in the wake of the kiwifruit controversy he suggested that China was “pushing back” over New Zealand’s decision to investigate allegations that it dumped steel here.

Zespri has suspended its exports of kiwifruit to China while it investigates what the Chinese authorities say they discovered in a shipment of fruit.

It is all a far cry from April when Mr Key launched the annual kiwifruit seeling season in China and Zespri’s Chief Executive, Lain Jager said having the Prime Minister launch the season in Shanghai was a great start to what was set to be a record-breaking season.

“China is poised to become Zespri’s number one market by volume this season and will account for around one-fifth of all our sales. We anticipate sales of around 24 million trays in 2016, up about one-third from the 18 million trays sold last season,” said Mr Jager.

When the Chinese authorities found the fungus which caused the rot three weeks ago, there were still eight million of the 24 million trays to ship. Zespri has re-allocated at least one million of those to other markets.

Meanwhile, it has stopped shipping kiwifruit to China temporarily until new checking protocols are in place and says it is working with New Zealand kiwifruit suppliers and the Ministry for Primary Industries to develop additional pre-shipping measures.

At his first press conference for over a month, the Prime Minister was unable to answer a series of questions seeking specific details about the discovery of the rot.

And he played down suggestions that it was retaliation for the steel dumping allegations.

“Historically in the last few months there have been discussions about trade issues, generally about trade between the countries,” he said.

“Where there have been claims made about reprisals about our trade with China we’ve sought assurances that wouldn’t be the case and I think we are comfortable that these individual trade issues are literally that – individual trade issues not part of a wide programme of retaliation against New Zealand,"

He said he understood the backdrop of the issue.

“But I think that people should be careful joining dots.

“We see this current issue with Zespri as a technical matter that could have arisen at any time.

"Yes, it has arisen at the moment, but we don't read any more into it than that."

Maybe not, but he also appeared to concede that MBIE is is now investigating the steel dumping claims.

"For obvious reasons, I can't go into the driving factor but if someone makes a complaint we know we have to follow the World Trade Organisation rules,” he said.

"I haven't seen all of the correspondence; I haven't been privy to all of the discussions so I am limited in what I can say."

He said discussion had taken place with China at various levels and interestingly suggested reporters talk further to not just the Trade Minister but also the Foreign Minister which raises the question as to whether there was a political dimension to any Chinese reaction to the dumping complaint.

He certainly suggested there had been a reaction from China to the steel dumping allegations.

“Every country, if it faces a particular issue will always want to push back on that issue,” he said.

“I think the Chinese perspective would be that they are not responsible for dumping steel.

“Whether they are or aren’t isn't something that I am in a position to comment on or to arbitrate on because there’s an individual section in MBIE that looks at that.”

Of course the Chinese reaction may have simply been to react strongly in meetings; that however would seem unlikely. 

The kiwifruit row has raised more questions about whether New Zealand has become too dependent on China as an economic partner.

Mr Key himself warned of the dangers of this just before he left for his trip to Indonesia four weeks ago.

And yesterday (predictably) NZ First Leader Winston Peters was happy to make his own complaints.

“It must now be apparent to all New Zealanders that we are too dependent on China

“We have got so close to them; they are telling us what to do.

“In 2008 I warned the then Labour Government as well as the National Party, as Labour negotiated the China Free Trade deal that we would rue the day that our largest exporters became perilously dependent on China.

“At the time it was clear far too much of the economy would be dependent upon one exporter, Fonterra, one product, milk powder and one market, China.

“That warning has come to pass.”

While he was nowhere near as melodramatic as Mr Peters, the Prime Minister appeared to acknowledge, at least in part, the same dangers.

“I think what we should do is what the Government has been doing which is following an agenda of working to broaden our trade relationships with as many countries as possible; not because of any threat or otherwise from any particular country but because there are always with concentration, risks, that put you in a more exposed position from your own economic perspective.”

Running through all this is a very hazy impression at this stage that some of the gloss on the China relationship may be starting to wear off.

 

 

 

 

 

 

 

 

 

 

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