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GFSF serves as an industry platform to help improve food safety in the Asian market. This blog offers the most up-to-date news on Asia's food safety events.

Tuesday, March 18, 2014

Chinese market needs careful handling

When Prime Minister John Key stepped into the Air Force 757 in Beijing in April to fly home from his last state visit, he had little idea he would be back less than a year later.
Just a day earlier, senior government officials and business figures snapped photos on their mobile phones on the steps of the Great Hall of the People, as Key was welcomed as a "real friend" by Premier Li Keqiang.
A 19-gun salute rang out over Tiananmen Square, which had been closed to the public.
It was a grand celebration of the exponential growth in trade since Labour signed a free trade agreement with China in 2008, but just four months later it all seemed to be at risk.
The botulism scare from a contamination at a Fonterra plant in Waikato sparked fear across the world, especially among mothers in one-child China, who trusted New Zealand's infant formula much more than local products.
Although the scare turned out to be a false alarm, Key will return to Beijing next week for a highly unusual visit. At its core, the trip is simply an effort to reassure China, now our largest export market, that all is well with New Zealand food safety. All this, just six months from the election, suggests a growing vulnerability to the superpower, which has experienced much more serious food safety issues than New Zealand has.
Key dismisses any suggestion that the trip represents diplomatic humiliation - when New Zealand has nothing to explain - or an over-reliance on China. "They didn't ask us to go, and we're not going to apologise anyway," he said.
"If anything, it's an opportunity to turn a negative situation into a positive for New Zealand."
Key made a commitment to go back to China when it was not known if the scare was real or not.
Chinese social media had pointed to this promise as the situation calmed down last year, he said, and now that a ministerial inquiry had given the food safety regime the all-clear (the findings specifically on Fonterra's role in the scare are not yet public), New Zealand can give further reassurances.
Now, Key will be armed with news that Fonterra, which declined to comment for this article, faces heavy fines, a sign that even the world's largest dairy company company is not above the law.
The charges, announced on Thursday, were quickly dismissed as a stunt by Labour, designed to paper over flaws exposed in New Zealand's underfunded food safety regime.
Key, though, even denies there was ever a problem in relations with China, despite being reminded of a sharply critical editorial in state-run news agency Xinhua.

Three months before the botulism scare, New Zealand meat was blocked from entering China and it took days for the Ministry for Primary Industries to work out why. Eventually it turned out to be miscommunication over labelling, blamed squarely on MPI. "There's a high trust factor between the two countries," Key said this week.The article, written in Wellington, criticised New Zealand's approach to trade and even mocked his comparison of Tourism New Zealand's 100 Per Cent Pure slogan to a McDonald's slogan.
If Key refuses to accept there was ever an issue, China's new ambassador, Wang Lutong, does not, acknowledging there was a "problem", albeit one which has been resolved through extensive reassurances and contact between governments.
Whatever the problem was, it is hard to detect its impact, outside diplomatic signals. Wang points to the massive growth in trade.
"Nothing has been affected," he said. "The figure for bilateral trade said everything about it."
In export terms, the botulism scare was hardly a speed wobble.
Every month since October has been a record month for exports to China, which were worth $10 billion in 2013. That surpassed the Australia figure for the first time, while in January alone, exports valued at $1.2b to China were double those to Australia.
But as China opens to the West, will it look beyond New Zealand? Academics warn that as China increasingly engages with the world economy, it is looking for other trading partners who will eventually compete directly in our markets.
Dr Marc Lanteigne, senior lecturer at Victoria University, said that although New Zealand was seen as a valued partner of China because of its first-mover advantage, China signed free trade agreements with Iceland and Switzerland last year.
Eventually it could reach a deal with Australia, this year or next. "If that were to take place it would downgrade New Zealand's lofty status as the only country in the area that has direct access. The New Zealand Government does have to prepare itself for this eventuality."

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