Panel Discussions
hosted By Susan Wood

In response to TIM GROSER interview

SUSAN WOOD
Welcome to the panel. Dr Raymond Miller from Auckland University; Fran O’Sullivan, the Herald columnist, a very fine one indeed; Gregory Fortuin, former race relations conciliator and South African honorary consul. Fran, you’ve spent a lot of time in China. You’ve done a lot of trade missions over a number of years. Very interesting interview, that. The minister said we need to run faster, we need to keep up with developments and more sort of ‘whole of government’ infrastructure. How do you think they’re doing on it? Do you think they’re getting it up fast enough to deal with the issues?

FRAN O’SULLIVAN - NZ Herald Columnist
No, and I disagree with Mr Groser when it’s a matter of telling the departments to come to ministers and say, you know, make a plea for more resource and then they’ll tick it off. I think where we’re lacking is that we’ve had a China strategy, and behind the scenes, they’re developing a China plan, but there’s been no real lift up, and looking at it from a strategic risk perspective of all the things we need to be doing to protect the trade. I mean, one of the things, particularly around milk. I mean, this makes me think. And he is right, there is a milk gold rush on, but if you go back to the time when we were making a lot of money training students in English language here, and then we had a lot of issues around the side, and we just didn’t husband that trade sufficiently. Now they’re getting onto it now, but I think they need to step it up big time.

SUSAN The risks are enormous, aren’t they? Some of them we can control, but we can’t control what comes out of Hong Kong and goes into China. There are many things we cannot control. You’re saying we’re not doing enough to control the ones that we can manage?

FRAN Yes, and also to perhaps get across to the Chinese and the Hong Kong Government and others what we are doing and to put the acid on them to lift their own game. I mean, one of the things the CCTV crew looked at was an issue here involving one of our OEM manufacturers who was making infant milk powder for a company back in China. It was effectively mislabelling it and passing it off as being a big brand which was on the shelves in NZ when it wasn’t. Now, is that our responsibility, or is that something for the Chinese authorities to look at in relationship to the fact that they don’t have a Fair Trading Act? So there’s a bit of to-ing and fro-ing that needs to-

SUSAN It’s our reputation, so therefore it’s upon us to look after our reputation, surely, isn’t it?

FRAN Absolutely.

SUSAN The interesting thing about it is the myriad of risks, though. It’s not just, sort of, let’s just make sure we’ve got the best product and there’s no melamine in it. The risks are extremely complex.

FRAN Well, I think what you have to factor in is that the powder, the infant milk powder is going to these very precious little beings, the one child with about 12 other adults looking after this one person, the real focus of the family. They’re paying a lot of premium for that milk powder. It’s what they rely on for that baby to be fed, so of course they want it to be safe, and we have a vested interest in making sure that is so. But Mr Groser’s right, I mean, what we are producing out of here is safe. The danger is in the supply chain. Other contaminants getting in in China, by things being mislabelled or just failing to get sufficient registers of the brand so NZ can say, ‘Hey, these are brands that are made here. Tick it off against the list.’ And now that’s going to happen. But you have to say why didn’t this happen much earlier?

SUSAN There does seem to be some suggestion the CCTV stories, the Chinese media coming here doing fairly negative stories about NZ, the DCD, the meat held up. Some sort of push back, payback, almost political motivation behind it?

FRAN I wouldn’t say so on the meat. I think on the meat, China’s a very big, diverse country. It was settled within two or three weeks. It didn’t go on and on forever. A change was made, and again it comes to being not savvy about China and the Ministry of Primary Industries washing through a change without any sense of, ‘Hang on, what happens in the market?’ Not having certificates that are recognised by the Chinese, not talking to the counter-parties in food safety there. So I don’t see that as payback at all.

SUSAN Gregory, in NZ - get Crafar farms the prime example - xenophobic. ‘Absolutely no. The Chinese, we don’t want them buying it.’ It turns out foreign direct investment, China is 5 per cent. It is tiny. Australia is our biggest, anyway. Just how damaging is that to a relationship, do you think, when you have people in NZ going, ‘No, we don’t you buying our land, but it’s ok to profit off you selling you our milk.’

GREGORY FORTUIN - Former Race Conciliator
Susan, before I was Race Relations Conciliator, although I’m sitting to the left of Fran, I arrived here quarter of a century ago as a capitalist with a conscience. So it’s critical to understand from a fiscal sustainability point of view, NZ has to go hell for leather with the Chinese. But in order to do that, we have to ensure that the issue of language, for instance, which the minister raised, that we speak their language, that everybody in government understands that if we want to do business with them, then we need to have the capability and capacity, and so resources are important. And also sentiments are important, because you’re going to do business with the people you like. And so that brings in a whole gambit of issues that we need to focus on from an economic perspective. But we are dreaming if we think the Chinese are doing business with us because we are just giant economic fiscal being in the bottom of the Pacific.

SUSAN I don’t think anybody’s ever accused NZ of being a giant. Maybe at rugby.

GREGORY But that puts it into perspective. The Chinese are currently in Fiji, the Chinese are in Africa, in Nigeria, and they are picking all the strategic partners to do business with. NZ also needs to realise that we are an important strategic partner, and they need us. So not everything for them is economic. It is political as well.

SUSAN But to that point, Raymond, politically we are doing things in partnership. I think in Rarotonga, the Chinese and NZ governments are in there. There’s water projects going on, aren’t there? So they are starting to take those relationships further.

RAYMOND MILLER - Political Scientist
Yes, I mean, the relationship is a really work in progress, actually. And I agree with Fran, and I wouldn’t want to diminish the importance of food safety and the importance of ensuring that labelling is correct and so on, but our traditional trading partners have been countries like Britain, the United States, Australia. It’s been very easy culturally and in terms of language to do business with them. This is a relatively new, although we’ve been going for a long time, 40 years. The number one partnership is only a matter of months old, and, really, I think, you know, a remarkable amount has actually been achieved over this period of time when you consider the issues of culture and language, but also domestic politics in China. It’s very difficult where there is a government that has such tremendous central control over the dissemination of information. That affects perceptions of countries like NZ. So I think there’s a period of adjustment. But I think overall, given the short period of time involved, we’ve made good progress.

SUSAN Fran, when we hear comments from politicians in this country, for example, Winston Peters, and he fairly recently had a go at Chinese over various things, how much does that damage the relationship in China and does get play in China?

FRAN Oh, it got play when he became Foreign Minister under the last government, very much so at the time, mainly, actually, through interviews in Hong Kong. The South China Morning Post, which were then relayed into China. But I think China’s learnt how to deal with Winston. They know exactly what Winston’s about, and so he’s compartmentalised. I don’t think in any respect that they see him as a person who- I mean, he’s basically quite cynical about what he does. I think they would be seriously worried if it was someone like David Shearer, for instance, making those comments because he would be seen as the prospective leader, prospective prime minister of an alternative government at some stage. But not with Winston, no.

SUSAN Panel, thank you very much.

ENDS

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