Evolving China economy still ripe with potential
Reading Time:2minutesWeak consumer spending may have dulled some of the gloss of the New Zealand primary sector’s largest export market, but observers say it is a sign the Chinese economy is evolving. Chinese. . .
Reading Time:2minutesWeak consumer spending may have dulled some of the gloss of the New Zealand primary sector’s largest export market, but observers say it is a sign the Chinese economy is evolving. Chinese exports are thriving but second-quarter 2026 economic growth and consumer consumption data is flatter than expected due to low household confidence from falling property prices and an oversupply of housing. An ANZ report on China showed year-on-year retail sales for the quarter are the lowest since December 2022. Meat Industry Association data shows that in the 2025 calendar year China was NZ’s largest sheepmeat market by volume, taking 156,345 tonnes. That was 7% lower than 2024, but a 17% lift in prices saw the export value increase to $1. 1 billion. China takes about a third of all NZ dairy exports, which in 2025 were worth $11. 6 billion. Alistair Crozier, the executive director of the New Zealand China Council, says China’s economic drivers are being transformed and the market still holds opportunity for primary sector exporters. New Zealand exports to China are worth $20 billion a year, accounting for about 25% of NZ exports in 2024-25, down from 33% in 2021-22 as exporters diversify their markets. Alistair Crozier, the executive director of the New Zealand China Council, said China’s economic drivers are being transformed and the market still holds opportunity for primary sector exporters. “China’s challenge is to catch the next wave, which is entirely different in character, such as AI and digital, but it requires a totally different labour force. “If they manage to catch the next wave, then the future is very bright for China and therefore for our companies. “It is just in a transition phase at the moment,” said Crozier. The Chinese economy is still buoyant, evident by the 31,500 students studying in NZ and demand from Chinese tourists. Despite these challenges, a survey of NZ businesses operating in China by the New Zealand Business Roundtable in China (NZBRiC) in April and May found a high level of satisfaction and confidence. It found 64% had high or very high optimism with their Chinese operations, and 68% were satisfied or very satisfied with their partners in China. But 60% identified more intensive competition as their single largest business challenge and 51% no longer had NZ nationals working for them in China. In all, 51% reported improved profitability and 49% greater revenue. Crozier said the Chinese economy resembled a K shape. AI, renewable energy, automotive manufacturing, and digital technology industries are booming, pursuing the upper arm. The lower arm in the K reflects declining residential property values which are dampening consumer confidence. Crozier said China’s vastness means it consists of multiple economies in one country, noting Tier 2 and 3 cities are still growing. He said the economy’s performance has defied sceptics before as the Chinese government has multiple levers and policies it can use. Crozier said realising the potential from the India free trade agreement will take time, but China still has immediate potential and NZ companies have established markets, contacts and supply chains. “In the meantime, in China we have very good access, zero tariffs and logistics. ”