Sunday, January 2, 2011

My thoughts on NZ's trade agreement with Hong Kong

What a great idea!  Negotiate a trade agreement with the most competitive and financially sound market in Asia.  No trade agreements are ever reached without a lot of hard work, a lot of schmoozing and without a doubt a lot of concession making.

Here are a few basic facts about Hong Kong -

  • Population:7.0 million,
  • GDP (PPP): $306.5 billion, 2.4% growth, 5.7% 5-year compound annual growth, $43,924 per capita.
  • Unemployment: 3.5%
  • Inflation (CPI): 4.3%
  • FDI Inflow: $63.0 billion


Here are a few basic facts about New Zealand -

  • Population: 4.3 million
  • GDP (PPP): $115.4 billion, -1.6% growth, 2.0% 5-year compound annual growth, $27,029 per capita
  • Unemployment: 4.2%
  • Inflation (CPI): 4.0%
  • FDI Inflow: $2.0 billion


So Hong Kong wins in all areas.  Interestingly New Zealand ranks at number four in the region on the Index of Economic Freedom.

So what do these numbers tell us?  Hong Kong has strong wealth, a growing economy and will provide huge possibilities for trade in the future.

What interests me about these trade agreements is what does New Zealand have to offer that Hong Kong would want to partner up with us?  Seriously.  New Zealand has a lot of land, a lot of primary goods e.g. dairy products, tourism and wood products.  Another thing that New Zealand has is a lot of smart and analytical people.

China and Hong Kong are both friends of New Zealand and a lot of kiwi's (slang) head over to those countries to establish, grow and expand their business opportunities.  I sincerely hope the economic benefits of such an agreement create waves into the future and not just ripples in the short term on a very big pond.

So we shall wait and see how this relationship develops over time.  I would expect that there will be few tangible results or effects for at least 3 to 6 months.

If anyone needs any help - I'm always available.

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