China’s middle class drives Asia-Pacific, says Key
Prime Minister John Key has pointed to the rise of the middle class in China as a major driver of economic growth in the Asia-Pacific region.
Mr Key said in Sydney yesterday that New Zealand’s focus over the coming years would be tapping into the Asian market, forging closer links with Australia and transforming its industries to operate in a highly competitive environment, the Australian Financial Review reports.
“Substantial economic growth is going to continue in Asia and New Zealand is going to be a very strong recipient of that,” Mr Key told a Trans-Tasman Business Circle event.
He said the country’s manufacturing sector could compete with China at the “higher end of the value curve”.
Local economic growth and the internet were the most significant forces in the Asia-Pacific region.
Mr Key said New Zealand was the first developed country to sign a free trade agreement with China, lifting trade from $6-$7 billion a year to $14 billion.
The countries had set a target of $20 billion by 2015.
“We sold more to China in the six hours you were in bed last night than in all of 1972,” he joked.
Mr Key said the number of middle-class Chinese would hit three billion in 2030, up from half a billion.
In the same period, there would be no dramatic change in the number of middle class people in the United States and Europe.
Mr Key said Australia was New Zealand’s largest export market and source of foreign investment.
It was a relationship “I think we can do more with”, he said.
The Australian Productivity Commission and its New Zealand counterpart are examining ways to strengthen the relationship between the countries ahead of the 30-year anniversary next year of the Closer Economic Relations agreement.
Mr Key said his conservative government had inherited an emissions trading scheme but it differed from the Australian version because there was a cap on prices rather than a floor.
“We don’t want to get ahead of the rest of the world,” he said.
The government had also rolled out broadband across the country but it did not involve the expensive “fibre to the home” infrastructure planned as part of Australia’s national broadband network.