CNBC | Thu, Jun 9, 2016 08:55:06 AM
New Zealand is known for its lush, green scenery and abundant dairy produce, but there were broader investment opportunities than tourism and food, the country's economic development minister said.
The country, famous for providing the settings for Peter Jackson's "The Hobbit" and "The Lord of the Rings" film series, is just as good at software services and niche high-tech manufacturing from healthcare products to airport conveyor belts, Steven Joyce told CNBC's "The Rundown" on Wednesday.
Joyce, who was in Vietnam and Singapore to promote his home country's investment opportunities, said New Zealand's tech sector had clocked strong growth to become NZ's third-largest export. Overall, New Zealand exports were worth NZ$4.3 billion ($3 billion) in April, up 4.0 percent on-year.
Like many export-oriented countries long reliant on China's voracious demand for commodities, New Zealand, the world's largest dairy exporter, has looked to diversify as demand from the world's second largest economy has slowed.
In a February speech Reserve Bank of New Zealand Governor Graeme Wheeler said a marked slowdown in China would have important implications for New Zealand, especially if it was accompanied by a sharp decline in Chinese' household consumption.
"This would reduce the volume and price of our commodity exports to China, and likely affect our services trade, including exports of education services and tourism," he said. "Its overall impact on our economy would be magnified through other trade channels as China is the largest trading partner for over 100 countries – including our main trading partners."
New Zealand posted GDP growth of 2.3 percent in the fourth quarter of 2015 from a year ago.
Joyce said he was keen to promote New Zealand in emerging Vietnam because it would help the New Zealand tech sector in its search for ICT (information and communications technology) staff and offshore bases.
New Zealand and Vietnam are both signatories to the U.S.-led Trans-Pacific Partnership (TPP), which is awaiting approval from Congress.
The TPP is a trade and investment pact made by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam. The accord includes several policies that would make trade and investment run more smoothly the countries — key among them is lowering tariffs.
But the deal has come under attack from environmental, business and employment groups, as well as the presumptive presidential nominees Hillary Clinton and Donald Trump and Democratic hopeful Bernie Sanders, who've said it would cost U.S. jobs.
Reuters reported on Monday that Congress was expected to vote on the trade deal after the November 8 presidential election, with President Barack Obama pushing to have it ratified before he left the White House on January 20, but that opposition to the deal had increased during the fractious election campaign period.
Joyce, however, indicated that he was not yet worried about the deal falling through.
"There are lots of mixed signals coming out of the presidential campaign but in the medium term, it's so crucial for U.S. to be actively engaged in the Asia Pacific," said Joyce, adding after the election fray, the TPP would be back on the table.
"They'll be there but we just have to let them play though political stuff at the moment, which is at least very entertaining," he noted.