New Zealand can offer important goods and services for a growing Chinese middle class. Rising Chinese incomes have brought about an increase in the total quantity of food consumed, as well as a change in the types of food consumed at a time when there are serious limitations on food production in China. A three per cent year-on-year increase in meat consumption has been recorded over the past five years. Already, and certainly in the future, agricultural commodities and technologies will be in high demand.
New Zealand will probably not be contributing many manufactured goods to China anytime soon as the Chinese manufacturing sector prefers raw material such as timber. However a good sign for New Zealand comes from Euromonitor which says China will overtake the U.S. as the largest consumer of wine by 2015, on an absolute basis. A big driver of this trend is an increase in the number of Chinese women drinking alcohol.
Although New Zealand’s resources for medical expertise are already stretched tight, demand for these skills in China will increase in the years ahead. The Chinese middle class will begin to demand more and better medical services for themselves and for their aging population. If New Zealand continues to innovate in the medical sector there will be on-going demand for our medical products in China. Demand is more likely to come from the affluent sectors of the Chinese society, but a rising middle class will increasingly require higher quality medical care and should have the funds to purchase it.
Rich Chinese and members of the middle class have been travelling outside of China at an extraordinary rate. China’s outbound tourism market in recent years has been increasing by about 20 per cent year-on-year. As Prime Minister John Key outlined after his recent trip to China, tourism from China will see important gains over the next decade. New Zealand has felt the effects of a drop off in visiting European tourists due to EU financial instability, but an increase in Asian travellers has somewhat offset this trend. As the Chinese middle class expands, putting more money into travel, the New Zealand tourism industry must be prepared for an increase in Asian tourist numbers if it wants to continue to be seen as an attractive destination.