The COVID-19 crisis has thrown Australian and New Zealand businesses’ dependence on China into stark relief. With countries reportedly competing with and undercutting each other to secure desperately-needed medical supplies from China, many are now waking up to their economic exposure to a single manufacturing giant.
When it comes to our economic over-reliance on China, New Zealand’s consumers need look no further than their most popular big box chain, The Warehouse. The familiar “big red shed” sourced about 60 per cent of its home brand stock from China in 2017 — and a further NZ$62 million ($58 million) in products directly through offices in China, India and Bangladesh in 2019.
In Australia, many major chain stores as well as online retail giant kogan.com are in a similar position. Reliant on China for much of what they sell, including exclusive home-brand items, they are part of what has been described as the world’s most China-reliant economy.
Understandably, discussions about creating a “trans-Tasman bubble” between Australia and New Zealand have focused on kick-starting economic activity in the short term, particularly through tourism. But both countries also need to take a longer-term view of boosting economic activity — including through increased manufacturing and trade integration.
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The statistics support this. In 2018, 20 per cent of global trade in the manufacturing of “interm