China's growing trade push includes new efforts in New Zealand, aligning a second-tier city with our markets, all part of a focused effort to put China at the heart of their giant international infrastructure investment

Trade shows are ubiquitous around the world. They are common in New Zealand as well.

One at the Vodafone Centre in Manukau over the weekend featured the Chinese city of Weifang promoting its export wares to a New Zealand audience.

But Chinese trade efforts are couched in the mystique of their "Belt and Road" initiative these days, something that is claimed to be the brainchild of President Xi Jinping. It counjures up the image of a renewal of the old Silk Road trade routes, modernised to enable a reach into the vast Chinese markets.

It is a developing network of land (rail), sea and air routes that stretch from Western Europe all the way to China.

It's core strategic aim is to build a giant logistics network with China at the heart of its many tentacles.

It is a very tangible outreach of China's growing power.

At the opening ceremony of the Auckland event, the director of the Weifang Bureau of Commerce, Mr Bai Weiming (and who is also a local Party Secretary) told that outreach events like this are more than building export markets at the end of the logistics infrastructure.

Bai said there are four components to their One Belt, One Road initiative. First, relationships are founded on essential government-to-government trade deals.

"Second, the people-to-people initiatives."

Thirdly, the "cultural connections".

And "finally, there are the finance and trade relationships". However, from our perspective (and probably theirs), this is what it is really all about. The first three are there to help make the trade work.

Wiefang is a mid-tier Chinese city in Shandong Province, an area in north east China. Shandong borders on the Yellow Sea and has a total population of about 100 mln people and has a number oif cities with about 10 mln people. They include the provincial capital Jinan, Linyi, and the important port city of Qingdao, a key import point for the vast iron ore trade.

Weifang is just one of the large cities in this province, with a population also approaching 10 mln. It is in an area where agriculture was the dominant activity, but where industrial development has been getting the primary focus for decades. They claim to be "in the heart of China's On-Belt-One-Road system".

The Chinese are putting enormous resources in the system in a project driven from the top. It has found a new impetus with the sudden loss of focus on trade by the Americans.

Export trade will not only drive Chinese development, it will become the means of building its soft power. The 150 exhibitors at the Manukau event are the front lines of the effort.

Weifang is an appropriate city to be linked to New Zealand. It has a GDP of about US$80 bln which is about half New Zealand's US$190 bln GDP. At this level it is easy to see why one city in one province might turn their attention our way. New Zealand may not be making any formal effort to tie up with Weifang, but they have put considerable effort to connect with us.

Mr Bai and his team are reaching out to New Zealand, probably as part of a very large multi-pronged effort incentivised by Beijing. But there is unlikely to be much infrastructure investment that will flow formally our way. The infrastructure they will need is already here, with deep shipping and air connections that are already being expanded based on the growth in trade that we are initiating. For example, there are currently more than 70 flights per week from Auckand to China.

New Zealand purchased NZ$10.4 bln in the year to April 2017 a slip of -1.5%, and we exported NZ$10.1 bln of goods; China is now our largest single export market and that trade is up +14.6% in a year. However, we still run a NZ$300 mln goods deficit with China.

Bai said China's expanding network of bilateral trade treaties is seeing trade volumes expanding rapidly everywhere 'and this benefits everyone'. Our questions about international sea access and related disputed sovereignty claims in the middle of trade routes to countries that don't involve China were politely declined.

He also said that cities and regions like Weifang and Shandong are unrestricted by Beijing in terms of capital controls for offshore investment projects.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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