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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.

Comments and questions
10

I guess its a plan of sorts Mr Key, but what are you going to do now that China is hitting the wall?

Do you think 8.1% growth is hitting a wall?

Patience my dear anonymous, patience.

i wouldn't hold my breath on that, darlin

Take a look at this first chart and tell me what you see:
http://www.businessinsider.com/jim-oneill-forwarded-these-7-charts-to-goldman-sachs-portfolio-managers-and-senior-executives-2012-7#goldman-sachs-proprietary-coincident-and-lead-indicators-for-china-still-look-soft-this-suggests-that-possible-further-economic-data-disappointments-may-lie-ahead-2

Boy are folk like you in for a shock.

china's middle class of 3 billion by 2030? does that mean the population of china will be more than 3 billion by 2030? perhaps 6 billion? that doesn't make sense to me. may be india will achieve that feat, but china's population is currently (and officially) at 1.3 billion.

3 billion is clearly wrong - please correct!

“The Chinese middle class is already larger than the
entire population of the United States. In fifteen
years, the Chinese middle class will reach 800 million.
It has changed and will continue to change, the
dynamics of the world we live in and have huge
impact on everything – our life, our jobs, our
economy, and the world.” Helen Wang – Forbes Magazine

.... but not 3 billion!! Population growth to accommodate that would certainly need China to overturn its restrictive child birth policy from 1.3 billion today!

Is the PM overexcited or did the writer have too much wine at his corporate lunch?

By the way, Indonesia's middle class is predicted to be 244 million by 2030, and it may be an easier market to approach.

I hope our officials and politicians are not totally besotted by China to the exclusion f other emerging markets!

David Catty, Director
ASEAN ANZ Business Council

“We don’t want to get ahead of the rest of the world,” he said.

Well, thanks to your mismanagement of the economy and a complete lack of vison or forward-planning, you're right on track with that goal, Mr Key.

Check out the research paper from Mintel here http://world.einnews.com/pr_news/105178595/online-chinese-middle-class-travel-boom-for-australia-reports-mintel

Looks like the Chinese numbers are still pretty solid.