UK 'buddy' wishes NZ wasn't so singly focused on China
"All well and good but name five economies that are well diversified currently? Every country relies on something, best it be the future of China than anything else"Featured comment
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.
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.
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.”