China overtook the United States as New Zealand's second-largest export
market last month on higher demand for milk powder, wood and wool.
Shipments to China
surged 37 per cent to $3.76 billion in the year ended February 28, Statistics
New Zealand said. Sales to the US
fell 22 per cent to $3.6 billion. Australia is the nation's biggest
market, buying $9.27 billion of goods in the year.
Demand from China, the
world's fastest-growing major economy, is buoying overseas sales that make up
30 per cent of New Zealand's
gross domestic product.
Reserve Bank Governor Alan Bollard this month said the growth of China and Australia
as export markets was insulating New Zealand
from weakness in other regions such as the US, underpinning the nation's
recovery from recession.
"Just imagine how bad it would look like if China
fell off the rails," said Stephen Toplis, head of research at Bank of New
Zealand in Wellington.
"Don't forget Australia
is itself heavily dependent on China.
So if China
went down the gurgler it would not only take direct exports down, it would take
the indirect exports as well."
China's
economy expanded 10.7 per cent in the fourth quarter, the fastest pace since
2007. Premier Wen Jiabao's Government implemented a 4 trillion yuan ($586
billion) two-year fiscal stimulus and unleashed a record 9.59 trillion yuan
credit boom last year to help shield the economy from the world's worst postwar
recession.
China buys about a fifth
of Australia's exports, led
by iron ore and coal, helping New
Zealand's neighbour to skirt a recession
last year.
Bollard on March 11 forecast New
Zealand's economy would grow about 4 per
cent this year. GDP rose 0.4 per cent in the fourth quarter from a year
earlier, said Statistics NZ.
Sales of logs, milk powder and wool to China rose last month, the Government
agency said.
About a fifth of all exports to China are milk powder and the
country is the largest customer of Auckland-based Fonterra, the world's largest
dairy exporter.
Toplis said the growth in shipments to China
had been spectacular and, although unlikely, the possibility of it overtaking Australia
could not be ruled out.
"Australia is likely
to remain our number one trading partner but in 1991 China
bought less than 1 per cent of New
Zealand's exports, and today is takes about
9.5 per cent," he said.
"You wouldn't expect the increase to be as fast but you would expect it
to rise."
