Recent travel limitations have meant businesses have had to find different ways of working with overseas counterparts. What has this meant for those who have relied on face-to-face visits to build relationships? Franky Wang, Head of Asia Business Activation, takes a look at what this has meant for those working with China.
For many businesses, it’s not easy doing business internationally when you can’t visit your customers, suppliers, or the supply chain has broken down and nothing can get shipped (don’t even mention when the ‘Ever Given’ ship got stuck in the Suez Canal…).
The recent China Business Summit held in Auckland emphasised the importance of China as a trading partner, with Prime Minister Jacinda Ardern recognising China’s geostrategic relevance and the opportunities for New Zealand and China to work together in international trade.
If your business is an existing or potential exporter/importer to or from China, there are a few things that could be working in your favour.
- China has recovered well from the pandemic, and trade with New Zealand has increased significantly in the last decade (quadrupling between 2008 and 2019 to over $33b). China could be a good target market, especially if some of your other markets are struggling with COVID restrictions.
- The Asian population in New Zealand is fast growing. Five percent of New Zealand’s population has Chinese roots, and it’s predicted that twenty-two percent of our nation will be of Asian ethnic origin by 2038. This could mean better connections between Chinese and New Zealand businesses.
- New Zealand has recently signed an upgraded Free Trade Agreement with China that makes it easier and cheaper to trade (reducing tariffs, less red tape, enablement of digital trade).
If you are thinking of exporting to China, there are a number of positive steps you can take to minimise the current inconvenience of limited travel.
Step 1. Find a trusted partner
If you’re exporting for the first time or looking to expand into other regions of China. It’s often easier if you can use the power of referrals and existing business networks to fast track what you need. There are over 250,000 Chinese residents living in NZ (and growing fast), some of whom could act as key influencers and ambassadors connecting you to China.
There are also several organisations set up for this purpose, such as:
- the New Zealand China Trade Association who facilitate trade opportunities, have an active community of members and can organise trade missions and provide members with access to Chinese business intelligence
- the New Zealand China Council which is partially funded by Government to encourage dialogue between the public and private sector. The Council publishes and promotes research and publications like Understanding Chinese Investment in New Zealand to grow connections between both countries
- New Zealand Trade and Enterprise, who help exporters with expertise and investment support
- Callaghan Innovation, who work with innovative businesses to provide access to experts, technology and product development, skills and funding
- the China Chamber of Commerce in New Zealand, which is a member-based organisation that hosts events, forums, conferences, summits, and delegations, as well as connects New Zealand based businesses with their Chinese counterparts.
There are also strong Māori culture and business relationships with China especially in the tourism, agriculture and aquaculture sectors. Common values are shared and exchanged between Māori and Chinese targeting this strong culture economy.
Trusted partners can also be more informal, including business owners you already know trading in China. Great examples are Good Farms, which cooperates with hundreds of New Zealand farm brands in the Chinese (and other) markets and health supplements company Alpha Group. Your professional advisers (bankers, lawyers, accountants) may also have industry links, contact, or referrals to share (the tech and gaming market are also very active in partnering).
Step 2. Shift to new sales channels
Many businesses have been forced to change how they sell. Working from home, Zoom and Microsoft Teams meetings, using social media to communicate and connect, and shopping online are now standard practice for many of us.
Forgoing your physical visits to China could be an opportunity to establish a virtual selling process. Setting up online ordering and fulfilment, holding virtual meetings and events, and exploring new marketing and sales channels like WeChat, Douyin (Chinese TikTok), and live-streaming takes more effort than hopping on a plane and having a coffee with a client, but could become a the new normal for business if travel restrictions stick around long term.
Step 3. Find out what’s happening in and around China
I think understanding the culture and economy of China is critical. Before doing business in Asia, you really need to learn how customs, marketing, sales distribution and ‘doing business’ works. The only way to get this information, in my view, is from existing Chinese business owners operating in the region you want to trade in.
Discover for yourself the current circumstances or influences on your business and the industry prospects in China. Don’t rely on one source, read widely from media and other sources, network, attend webinars and events and talk directly to your contacts.
You should also have an understanding of wider risks when dealing with China. It’s the same for any country you export to of course, but an effective risk management process is important.
Step 4. Get access to offshore capital
If relevant and practical, you may want to tap into offshore capital for your business as there are many Chinese businesses who want to invest in New Zealand. You could get funding to improve local capacity and capability (retaining assets and intellectual property) and new partners based in China who would then have a vested interest in ensuring your business succeeds. It’s a win/win.
How BNZ can help
I believe it is a great time to connect with the fast-growing Chinese segment who are potentially your consumers, investors, and business partners for future business collaboration, and we’ll do as much as we can to help.
A good example is our recent partnership with the Team from the Alpha Group to host an introduction to “Kiwiso”, their latest concept to take ‘a little piece of NZ everyday’ to Chinese consumers. Working together we planned an event at BNZ’s Queen Street Partners Centre which resulted in a fantastic evening with seventy businesses attending, helping them accelerate the start of their project.
It’s also a good time to consider a ‘China Plus’ strategy and look simultaneously at India, Korea and the ten ASEAN countries (including Indonesia, Malaysia, Philippines, Singapore, and Thailand). These countries all have close trading links with China. BNZ recently hosted an external event with the ASEAN NZ Business council and the Indian NZ Business Council to share their learnings post COVID-19 and also encourage businesses looking into these regions with our support.
Here at BNZ we’re doing our bit while the borders are closed by:
- connecting with the New Zealand Chinese community through the BNZ WeChat account and celebrating key cultural moments like Lunar New Year with our colleagues and customers
- supporting customers with their banking needs through our nationwide Asian Cohort (bi-lingual colleagues)
- running our Asia Ambassador programme (BNZ non-Asian bankers with a strong interest in helping SME businesses export, import and expand)
- providing workshops and events supporting Asians in New Zealand to connect with professionals, such as lawyers, accountants, and valuers who speak their languages (BNZ Connect events) or launching their products and services
- helping to identify investment opportunities to support businesses in the Chinese market
- arranging wider banking services through our National Australia Bank Asia network.
My team, and the wider business is here to help you connect with this significant part of our community and grow with you. Talk to us about how we can help you trade with China, even if you don’t bank with us.
Any views expressed in this article are the personal views of Franky Wang and do not necessarily represent the views of BNZ, or its related entities. This article is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Neither BNZ nor any person involved in this article accepts any liability for any direct or indirect loss or damage arising out of the use of, or reliance on, all or any part of the content. References to third party websites are provided for your convenience only and BNZ accepts no responsibility for the availability or content of such websites.
References to third party websites are provided for your convenience only. BNZ accepts no responsibility for the availability or content of such websites.