Kiwi companies entering the Middle King should become familiar with New Zealand’s economic andpolitical history with China, especially our track record of initiatives according to DavidMahon.
“New Zealanders must endeavour to see the larger picture of poverty and struggle that drivebillions of human beings in Asia,” says the ex-pat, Beijing based head of
Mahon warns that New Zealand is squandering the chance to convert an historic politicalpartnership into major economic gains. An added danger would be allowing China’s demand forcommodities push us to concentrate too heavily on these, instead of diversified value-addedtechnologies, products and services.
Most kiwis aren’t aware of the position of favour enjoyed by New Zealand in the Chinesegovernment’s eyes. In political meetings, the Chinese government makes constant references to whatis calls New Zealand’s ‘four firsts’. Ours is an unusually intimate relationship for a bigdeveloping and small developed nation, though Mahon says there has actually been five firsts.
• July 1997. NZ broke the boycott by most OECD countries of the swearing in of the new HongKong government. America and Britain put considerable pressure on NZ, but from a simple matter ofprinciple, NZ politicians/bureaucracy concluded China, not Britain, had honoured the handoveragreement.
• 2001. NZ was the first developed country to conclude bilateral negotiations onChina’s entry into the World Trade Organisation.
• April 2004. NZ’s recognition of Chinaas a free-market economy, for which it was widely derided by other OECD countries.
• December2004. NZ the first developed nation to enter into bilateral negotiations with China for a freetrade-agreement.
• (April 2008). First OECD country to sign a free-trade agreement.
While no doubt New Zealand has been test crash dummy in a sense for China’s negotiations forlarger prey, the country’s far from ingratiating itself Mahon says.
“While it has supported China on a range of issues, it has also aroused China’s pique when ithas stood up to it on others, such as allowing persons whom China considers dissidents, like theDalai Lama and Xinjiang human rights advocate Rebiya Kadeer, to visit New Zealand,” he says. “Ifsmaller nations conduct smooth relationships with larger nations out of weakness, the smallernations will quickly lose the respect of the larger ones.”
Mahon contention of an unlikely partnership between China and New Zealand is a living example ofa verse from the Dao De Jing by 5th century BC poet Laozi.
If a great country can lower itself to greet a small country,
It will win thefriendship of a small country.
If a small country can lower itself to greet a great country,
It will win the friendship and support of a great country.
From a business perspective, Mahon says kiwi CEOs and their boards too often underestimate theneed to form comprehensive strategies for China and do not consider their presentations carefullyenough.
“It is not enough to simply ‘sell’ one’s company to an audience in China,” he says.“Meetings are opportunities to learn the needs of Chinese companies in their business methods. Itis too easy to come away from meetings where mutual goodwill and hospitality are mistaken forcommercial substance.”
Often delegations of companies, such as a recent green-lipped mussel co-operative, waste theirtrips to China Mahon says.
“They need to see such trips as the beginning of deeper relationships and not ends inthemselves,” he says. “Much of the value of the opportunities that these delegations offercompanies will be wasted unless the companies follow up with subsequent trips, bringing their seniormanagers and board members.”
Mahon says that New Zealand companies should also look to their intangible assets and residualgoodwill in China, and maximise returns from these.
A full version of Mahon’s paper is