The upgraded free trade agreement between China and New Zealand will generate fresh momentum for their trade ties in the coming years, boosting the trade in goods and services and regional connectivity activities.

Many opportunities occurred after the two sides inked an upgrade to their 12-year-old bilateral FTA in late January, on the basis of the Regional Comprehensive Economic Partnership that they signed along with 13 other countries in the region in November.

Under the upgraded agreement, China and New Zealand have committed to reinforcing cooperation in areas including e-commerce, competition rules, government procurement, and their trade in goods, said Yu Benlin, director-general of the Department of International Economic and Trade Affairs at the Ministry of Commerce.

Notably the content on the environment is of a higher level than that in the RCEP, with the two sides agreeing to enhance higher-level cooperation in environmental protection, enhancing enforcement and implementing multilateral environmental protocols.

Zhang Jianping, director-general of the Beijing-based China Center for Regional Economic Cooperation, said the move is an indication that both nations hope to achieve a comprehensive, modern and high-quality agreement. Trade and economic ties between the two sides will expand in terms of scale and become more dynamic in the next stage.

China and New Zealand signed their original FTA in April 2008 and implemented it in October that year. They began talks on upgrading the agreement in November 2016 and concluded the talks in November 2019, according to information released by the Ministry of Commerce.

Following the implementation of the free trade deal in October 2008, duties totaling 28.39 billion yuan ($4.36 billion) were exempted from China's import of New Zealand goods.

"The upgrading of the China-New Zealand FTA improves logistical efficiency and cuts other operational costs, which in turn creates more value for businesses," said Leo Liu, general manager for China of Grin Natural, an Auckland-based oral care brand. The company, which entered the Chinese market via e-commerce platforms in 2018, said it sold half a million tubes of toothpaste in the Chinese market from late 2019 to the end of March this year.

Boosted by Chinese consumers' strong purchasing power, the company's sales revenue jumped by 300 percent on a yearly basis in China in the first three months of this year. Liu said the company will establish three additional teams and work with top-tier Chinese universities and institutions to develop new products this year.

"The Chinese economy will continue to grow steadily and rapidly, and Chinese consumers will demand more high-quality, professional products to improve their quality of life," he said, noting the country's e-commerce sector will continue to lead consumption, based on the convenience and service efficiency it offers and the mature infrastructure nationwide.

The upgraded FTA will make exporting to China easier for New Zealand companies and reduce costs. The new rules will mean, for instance, faster border clearance for fresh food, as well as other goods that may have transited through other countries or regions en route to China, said Cui Fan, an international trade and economics professor at the University of International Business and Economics in Beijing.

Thanks to closer business ties, the easing of the pandemic and vaccinations, China-New Zealand trade soared by 33.2 percent year-on-year to $5.92 billion in the first quarter of 2021, data from the General Administration of Customs show.

Timber, dairy and leather products, meat, pulp and raw materials for textiles are China's main imports from New Zealand, while clothing, machinery, telecom equipment and parts, computers, furniture, toys and sports goods are China's pillar exports to New Zealand.

In addition to their complementary trade structure, the willingness of the RCEP members to ratify the deal before the end of this year and push for it to take effect on Jan 1, 2022, will benefit more New Zealand businesses in China's lucrative market in the next growth stage, said Ren Xingzhou, a research fellow and former director-general of the Institute for Market Economy of the Development Research Center of the State Council.

She said China's economic vitality and resilience have generated growth opportunities in New Zealand and other parts of the world, and driven by market opportunities and policy support, domestic companies have accelerated the pace of "going global" to diversify global market channels through making outbound direct investment.

Apart from enhancing trade ties via various free trade deals, a number of Chinese companies have already invested in New Zealand, including China's dairy giants Mengniu Dairy Group, Yili Industrial Group, and Bright Dairy & Food, as well as infrastructure company Beijing Capital Group and telecom equipment provider Huawei Technologies.

"The complementary nature of the two countries' industries will continue to increase their trade in both goods and services from a long-term perspective, as China, a manufacturer, needs to import many agricultural goods and commodities from New Zealand," said Zhao Ying, a researcher at the Beijing-based Institute of Industrial Economics, which is affiliated with the Chinese Academy of Social Sciences.

Limited by land size and geographical location, he said New Zealand is proficient in the trade in services and related sectors such as logistics, tourism, shipping, education and environment protection.

The country is also one of the founding members of the Asian Infrastructure Investment Bank and an important hub in the Belt and Road Initiative.

In February, New Zealand's State-operated railway company, Kiwi-Rail, ordered 10 new diesel locomotives from CRRC Dalian, a subsidiary of China Railway Rolling Stock Corp, or CRRC, China's largest rolling stock manufacturer, on top of the 63 that have been purchased since 2009,
These locomotives will be built on the mature design and concepts of the previous generation, and leverage the experiences accumulated in the on-site technical support services and the user application habits of the previous locomotives, said Wang Jun, CRRC's vice-president.

Apart from building both regular and maglev high-speed trains, he said the group will continue to develop high-speed freight trains and 30,000-metric-ton heavy-duty trains, as well as new special trains for standardized containerized freight, cold-chain logistics and cross-border freight transportation to meet its global customers' demand.