Chinese unease over Trump may prove boon for Kiwi exports

Friday 3rd March 2017

US President Donald Trump's blunt and confrontational rhetoric about Chinese trade policies hasn't won much support among consumers in the world's most populous nation and could give some Kiwi exporters a leg up over their American rivals.

A survey of 2,000 Chinese consumers by China Skinny and Findoout last month found 41 percent of respondents willing to answer held a more negative view on the US, while 51 percent were neutral and just 8.1 percent were more positive. The survey sought views on a variety of US products and services, with the most negative in areas where New Zealand exporters are jostling for attention in the world's second-biggest economy.

Chinese consumers were most downbeat on making US investments, with a net 18 percent more negative, followed by a net 14 percent more negative on travel, and 10 percent downbeat about study.

"America's loss is NZ's gain if we execute well," said Mark Tanner, an expat Kiwi who heads up Shanghai-based marketing consultancy China Skinny. "Chinese want to travel more than ever, but with America not looking overly welcoming, Europe looking unsafe, NZ (and Australia) are well-positioned for tourists and students."

China is an important part of New Zealand's strategy to attract both international students, who pay full price on school fees, and for tourism, with the Asian nation providing the country's second-biggest pool of short-term visitors.

Tanner said those students and tourists provided wider marketing benefits through word-of-mouth back in China, building "an affinity for NZ products" and they then "tell their friends and family about it on social media and return back to China praising it".

The survey also found Chinese consumers were more negative on food and beverage, and mother and baby products from the US, at a net 9.5 percent and 8.1 percent respectively. US health and pharmaceuticals products also attracted a net negative view at 4.6 percent.

The online market research firm said Chinese consumers can be sensitive to negative media about a country, as shown when sales of Japanese cars slumped in China during the territorial dispute in September 2012.

New Zealand counts China as its biggest trading partner, and government data yesterday showed the terms of trade with China rose 13 percent in the December quarter, with export prices up 7.7 percent and import prices down 5 percent. The volume of exports rose 29 percent while values were up 39 percent, due to the pick-up in sales of dairy products, while import volumes increased 6.9 percent for a 1.6 percent rise in volumes.

Fonterra Cooperative Group, the world's biggest dairy exporter, noted Chinese imports of dairy products were up 20 percent in calendar 2016, with skim milk powder the only category to decline through the period.

The US exported US$113 billion of goods and services to China in 2015, making it the nation's third-largest market behind Canada and Mexico, the other parties of the North America Free Trade Agreement. However, since Trump has taken over the White House he has threatened to impose punitive tariffs on China, and his national trade policy agenda for 2017 signalled a "fundamental change in direction" to "expand trade in a way that is freer and fairer for all Americans" and that rejects the idea the US can strengthen its geopolitical position by "adopting trade measures that make American workers, farmers, ranchers and businesses less competitive in global markets".

Reserve Bank governor Graeme Wheeler this week cited the Trump's trade policies as an unknown factor that could pose downside risks to the global economy.

BusinessDesk.co.nz

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