On the Ground: China in 2023

New Zealand Prime Minister Chris Hipkins and a delegation of trade experts, business people and journalists are on the ground in China this week.

One of the highlights will likely be Tuesday night’s meeting with Xi Jinping, which came at a pivotal time in this country’s relationship with China.

By all accounts the meeting went very well, with Xi describing New Zealand as a "friend and partner" and the relationship one to which he was "always attaching a great deal of importance".

Hipkins described the meeting as "warm, and incredibly constructive" and "an opportunity for relatively free-flowing dialogue on a range of issues where New Zealand and China have mutual interests".

"The relationship between China and the US was discussed, the situation in Ukraine was discussed, the Pacific was discussed, human rights were discussed," the PM said.

So, with the NZ delegation roughly half-way through their trip, what’s likely to leap out at them in the China of 2023 ?

When I joined our own New Zealand China Council visit in May, our first since 2019, it was immediately clear that China has not stood still during the Covid years. 

Here are my takeaways from our own visit, and some thoughts on implications for New Zealand:

 New Zealand’s image is still positive

This country is still well regarded in China.  But these days it’s not just about the safety and quality of our exported goods or the beauty of our landscapes.

Almost all people we spoke to viewed China’s international engagement squarely through the US-China lens.  State media convey the message that the United States is the aggressor in the relationship. Compared to some others, New Zealand is not seen as closely associated with the containment that Chinese people believe is occurring. 

We’re also recognised as central to the expansion of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other regional trade arrangements for example. 

Concrete developments this year have backed up these gut impressions. 

Direct flights between our countries (subject to state approval, and thus a political issue) will be back to 77 per cent of pre-Covid levels by the end of July, in contrast to links with some other countries.  China hosted Foreign Minister Mahuta in March and now Prime Minister Hipkins is on the ground, his visist sure to be well covered by Chinese state media.

 And there is a public awareness in China of New Zealand, and of differences between the two nations.  But its the way we frame discussion of those differences , and act on them, which gets noticed. 

 Climate change response is a full court press

The Chinese government is committed to achieving its twin goals of peak carbon emissions by 2030 and carbon neutrality by 2060 – in fact we were told the first milestone will be achieved several years ahead of schedule. 

China is still known globally as the world’s largest carbon emitter (not least due to its size – a per capita assessment presents it in a better light), with a heavy energy reliance on fossil fuels.  But on the ground, you see increasing evidence that the country has a plan for long-term change.

 It’s a lot easier to track the rise of e-vehicles in China than it is in New Zealand:  their subsidised number plates are an easily visible green. 

They are everywhere now – an estimated 30 per cent of all 2022 new car sales in China were EVs, making it the world’s number one manufacturer and consumer.  (EVs have also helped to make city streets quieter, but they are lethal from behind - pedestrians beware!)

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Wind turbines and solar panels along our train route from Shanghai to Beijing were another physical indicator of progress.  China is the world’s leading manufacturer of components and equipment there too. 

 But the real story is still what’s happening behind the scenes.  Setting and achieving long-term targets is an undeniable strength of China’s system of government, even if there are weaknesses also..

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With a growing number of large Chinese companies also announcing their own carbon neutrality goals in support of government policy, watch this space. 

 And consumers?  Evidence suggests there’s lower individual environmental consciousness in China than in developed economies – shoppers favour sustainably-produced items because they are ‘good for me’ not ‘good for the world’.  But regulation will probably push consumers towards climate-friendly behaviours over time.

China’s determined green mindset has implications for how New Zealand can partner with China in areas relevant to the interests of both countries in future.  And our exporters need to keep abreast of evolving consumer sentiments in the market.

 Buying local is in

There’s a new pride in Chinese culture and products, especially amongst Gen Z consumers.  Influenced also by the youth cultures exported from countries like Japan and South Korea, the longstanding desire to copy the West has not disappeared but it’s been diluted.  

There’s increased confidence in the safety and quality of Chinese food and beverage products as well.  Local producers are inventive, constantly releasing new products and flavours that may trend or flop but are worth trying.  These producers keep up with ever-changing social media channels as well, to engage constantly with their target customers.

Elsewhere, China’s car companies are producing models that are as well-designed and innovative as anything from the US, Asia or Europe. There’s no doubt an element of national pride in some purchasing decisions, but mainly it’s simply a reflection that quality local products are available at a competitive price.   

 This means New Zealand exporters, used to competing mainly with other international brands at the top end of the market, are increasingly now up against local brands as well.  Our own products are world class, but we will need to be as inventive and hardworking as local competitors in future.

 China is increasingly sophisticated

 Sitting on one of China’s efficient, clean ‘gaotie’ bullet trains hurtling along at 350kms per hour, ordering a delivery meal from the next station using the on-board mini-app with cashless payment, watching high-rise city after city glide by, I did wonder if the world really understands how sophisticated China has become. 

 It’s the little things you notice.  Not just the quirky side – chatty ‘robots’ delivering meals to restaurant tables and room service in hotels, for example.  But lifestyle choices as well. 

 I was interested to see the large number of weekend joggers in a Shenzhen Park, easily outnumbering the tai chi and other traditional exercisers that used to dominate.  I was treated to a meal at one of the 50 Michellin-starred restaurants in Shanghai.  We drank takeaway coffees served at meetings as a courtesy to foreign visitors (even if the green tea of our hosts would have been tastier!)  And admired the dog couture stores, minimalist cafes and edgy pop-up outlets in downtown Shanghai.  The streets are cleaner, as is the air above them.  And we haven’t even begun to explore China’s fast-developing metaverse…

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As we witness continuing debate in developed western economies about ‘de-risking’ from China, if not decoupling, there’s sometimes a sense from foreign media that China is also somehow turning in on itself.  China’s dual circulation economic strategy, with its emphasis on strengthening domestic production and consumption alongside international trade, has sometimes been portrayed as China preparing to go it alone.

I just don’t think China and its people want that to happen.  

So for New Zealand, the more contact we can have with Chinese visitors and in China itself, the more we will be able to remind ourselves that China is now an increasingly modern and contributing part of global society, sometimes doing things we don’t support or agree with, but with its door still very open to the world.  

 As it is for our Prime Minister and delegation this week.

The opinions expressed are those of the author

- Asia Media Centre