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UK 'buddy' wishes NZ wasn't so singly focused on China

The traditional “buddy” relationship with the UK needs refreshing, its visiting trade and investment minister says.

Lord Livingston is here this week to champion the NZ-UK relationship.

He mentioned more than once while talking to the NBR ONLINE that New Zealand didn’t need to be so “singly focused” on China. This country did not drop off the UK radar and there’s still a “special relationship” between us.

“Your Prime Minister described the UK recently as one of his 'best buddies' – I think that was the phrase that was used. So I don’t think China is the only option."

Born Ian Livingston, he took up his government role last year after working in the highest levels of business for 30 years. He has operated under the Sir Stanley Kalms, of Dixons Group, and was the youngest FTSE 100 finance director at the age of 32.

Ambitious goal
Lord Livingston's big goal over the next six years is to double the UK’s exports worldwide to £1 trillion by 2020.

That will be a tough ask but if anyone can achieve this it would be a person who turned $10,000 into $30,000 in just 10 months – while he was still at primary school.

“I think it’s important to have an ambitious target. In business if you set a really ambitious target you radically change people’s behaviour, rather than if you set things which are reasonably within reach,” he says.

The UK is already the sixth largest exporter in the world. He spoke to NBR in the showroom of the largest Mini dealership in the southern hemispher; a world-class brand with its genesis in Britain.

“The UK is doing well, we’re growing by about 3% which is the fastest rate of growth in the G7. Our economy can grow even stronger with a strong exporting capability. And we’ve got very good, big global companies and a huge number of entrepreneurial companies," he says.

“But the medium-sized companies tend to export to Europe and only one in seven actually exports outside the EU. So the drive is really to get these companies growing and that will add to prosperity.”

The push for more exports is about creating long-term sustainability. Exports represent just 18.2% of GDP in 2011, making the UK one of the few large economies not dependent on exports.

Strong ties
Lord Livingston says New Zealand and the UK are already highly invested in each other’s economies.

“We’re keen to get our companies together to join expertise to sell to third parties. In fact, Fonterra and Dairy Crest have got together to sell into the Chinese market.

“Bear in mind that as much as your China success comes from it being in your back garden, actually the journey from the UK to Beijing is even shorter than it is from Wellington to Beijing.

“So there’s a lot we could do together as well as selling into each other’s markets.”

Lord Livingston points out that reliance on China as a main trading market isn’t the only answer. New Zealand has more options for trade in the 21st century than it did during the heights of the mid–20th. Asia is just one, albeit incredibly large, market.

“While China’s been a good market, it has slowed down recently. I don’t think any country wants to have a single market. And I don’t buy that the only answer for New Zealand is China.

“I think it is important for New Zealand but so is Europe and perhaps the UK can help [your companies] get in to Europe. And it’s still got a very strong relationship with the US.”

Time for a refresh
Lord Livingston wonders although New Zealand wants to move up the export value chain, the question is how much further it can get without diversification.

He says traditional markets might need a refresh.

“We share a common heritage but I think more relevant today is that we share an common attitude toward an open economy.

“Maybe it’s not a coincidence that both New Zealand and UK are growing at rates north of 3%, in contrast to a number of other close economies. There’d be many countries very, very happy with those growth figures,” he says.

Lord Livingston hasn’t received much pushback from the New Zealand business community on his effort yet. Generally speaking, the reception has been warm. The issue now is turning heads and focusing the New Zealand business community’s attention.

“In terms of barriers, I don’t think there’s a lot. It’s about getting people focused and realising the opportunity in the UK. I think the biggest barrier is just focus.”

nsmith@nbr.co.nz

More by Nathan Smith

Comments and questions
15

What a joke. Britain stopped being a "friend" to NZ when it betrayed the Commonwealth and joined the EU. The French allowed their "friends" (their ex colonies and members of the francosphere) to have unfettered access to the EU while we were starved. I remember 1974 and its effects, and can assure you Britain is not to be relied on.....

Shane,
You are so so right. I was in the UK when they joined the EEC and my heart swelled to twice size when I read "the case for New Zealand" written by Sir Bernard Ferguson ex Gov Gen ,and the sacrifices this country made for Britain in times of war... but it was all to no avail. We were dropped like a hot potato and an inconvenient partner. And now they come back with weasel words that mean little

Great call Shane,Bud & Jeremy. For what we did for the UK between 1914-18 and again between 1939-44 and then for the U.K to ditch us in the 60's and now to be treated as "aliens" at UK's passport control, makes Livingstone's comments more than incongruous!

Well if the UK hadn't of entered the EEC in 1974.............and that is the reality of course. The UK turned away from NZ, with its growing and almost exclusive focus on Europe and the North Atlantic, we didn't turn away from them. When was the last time a British Prime Minister visited us? In fact how many British Prime Ministers' have ever even visited New Zealand? If it wasn't for the fact that we share the same head of State which provides some connection to the corridors of power in London, you wouldn't see a senior British politician in NZ for dust. That's how much we register on their radar. And once this economic malaise in Europe is over, and the UK has sorted out its relationship with the EU, how long do you think their interest in far off, it's just like Britain was in the 50s, New Zealand will last? I can tell you, not very long.

He is right, we shouldn't have all our trade eggs in the China basket. That's not sound investment policy, and it's not sound trade policy either. Diversification is key. But I don't see NZ having a strong future in the UK or the EU as things there currently stand.

Britain was a great help to NZ for many years prior to jointing the EEC when it had to help itself
What is all this self pity about being abandoned by a country trying to recover from a devastating war .
Sadly they are now shackled to a corpse - the EU
Give us a break Shane

Britain knew exactly what it was doing when it turned its back on trading with the Commonwealth in favour of the EU. It was their decision to make. Now that their decision has turned out to be disastrous why should we provide them special favours?

Of course we should diversify away from China and should be happy to have a free trade agreement with Britain; but we can't negotiate a free trade agreement with Britain as they have outsourced that capability to the EU - so anything from Britain about us opening up to them is simply a request for us to bend over and be prepared to be shafted as anything will be entirely one way until Britain leaves the EU.

This is all very well and good but name five economies that are well diversified currently?

Hong Kong shuffles paper, doesn't make anything and deals in money.

Always seems to do fine.

Every country relies on something, best it be the future of China than anything else.

Totally agree. Make hay while the sun shines. China could buy all of our exports without even blinking and the problem is somehow ours? How exactly?

I find it really interesting that top-level ministers and experts from around the (western) world consistently call for other developed countries to "diversify" away from China. As if they can't wait for China to slowdown or collapse.

It's like they're gaming China into a slowdown. Every country has its economic problems, sure, but I don't recall anyone suggesting diversification from Europe in 2008. Is there something fundamentally different and dangerous about China's coming slowdown? I'm yet to see the evidence for that.

There's something fishy with putting all this on China alone. I'm not sure what that is. But it certainly smells like maybe a concocted "yellow peril" theory protectionism all over again.

He has to use slang like 'buddy' since, in formal trading partner terms, the UK has favoured Europe since it joined the EEC in 1973..

The 'buddy' term was from John Key.

Friends have open borders.

As regrettable as it was, NZ getting the cold shoulder from Britain proved to be the shot in the arm that we needed - we picked ourselves up and started to open ourselves up to the world. Today we are a far more interesting, open minded and dynamic people than the stifling Pavlova Paradise of of 50 years ago. Have a read of "The Passionless People". Bring on tomorrow.

This is exactly why we should be championing most of the government's free trade deals. They make us more worldy and give us access to imports - which is the whole point of trade.

It would be nice to have the UK back on board as a major export destination (they're already our sixth-largest trading partner), but then wouldn't it be nice to have South Korea, Japan, Malaysia, Vietnam, or for that matter Nigeria, Belarus, and Colombia on board too?

Bring on tomorrow's free trade, I say.

A traditional buddy? when it has no money, who cares! This is a reality of the world!

Is there an equivalent of Godwin's law to be applied for any remarks about 'sacrifice'?