April 2, 2010
China overtook the United States as New Zealand's second-largest export market in February 2010 on increased demand for milk powder, wood and wool.
Shipments to China surged 37 percent to NZ$3.76 billion (US$2.65 billion) in the year ended Feb. 28, Statistics New Zealand said. Sales to the United States fell 22 percent to NZ$3.6 billion (US$2.55 billion). Australia is China's biggest market, buying NZ$9.27 billion (US$6.55 billion) of goods in the year.
Demand from China, the world's fastest-growing major economy, is buoying overseas sales that make up 30 percent of New Zealand's gross domestic product. Reserve Bank Governor Alan Bollard said the growth of China and Australia as export markets is insulating New Zealand from weakness in other regions, such as the United States, underpinning the nation's recovery from recession.
"Just imagine how bad it would look like if China fell off the rails," said Stephen Toplis, head of research at Bank of New Zealand Ltd. "Don't forget Australia is itself heavily dependent on China. So if China went down the gurgler, it would not only take direct exports down, it would take the indirect exports as well."
China's economy expanded 10.7 percent in the fourth quarter, the fastest pace since 2007. Premier Wen Jiabao's government implemented a 4 trillion yuan ($586 billion) two-year fiscal stimulus and unleashed a record 9.59 trillion yuan credit boom last year to help shield the economy from the impact of the world's worst postwar recession.
Reprinted in part from Bloomberg