On Target: Sporting nations share economic success
The country’s 4.6 million ‘Kiwis’ have a well-known passion for sports. New Zealand is home to defending World Rugby Cup Champions the ‘All Blacks’ and the country is current holder of the prestigious America’s Cup.
This spirit of competition plays an important role in New Zealand society. Comparable to the nations’ sporting achievements, the country’s economy ranks high in gender equality, economic freedom and ‘ease of doing business.’
In terms of the country’s gross domestic product (GDP), New Zealand is one of the highest-performing nations within the 36-member Economic Co-operation and Development (OECD) organization. In the second quarter of this year, the country’s economic growth hit a two-year high and forecasts for growth remain bullish.
Remarkably unaffected by the global financial crisis a decade ago, government debt is low and the country’s banking and financial services sectors continue to act as economic drivers.
While Japan is currently New Zealand’s fourth largest trading partner, ties date back to 1928 with the signing of the Provisional Arrangement between Japan and New Zealand Concerning Commerce, Customs and Navigation.
Today, Japan is New Zealand’s fourth-largest export market, fourth-largest investor, fifth-largest inbound tourist market and third-largest source of international students. A new-wave of Japanese corporate investors and high-net worth individuals are seizing opportunities within the New Zealand economy.
“Kiwis have a positive feeling towards Japan and this feeling is mutual. There are 43 sister-cities shared between our two island nations, a significant number for a country the size of New Zealand. Traditional trading relations between our countries are based on mutual trust and Japanese business people recognize New Zealand as a source of high-quality services, products and commodities.”
Timber, dairy, fruit and nuts account for some of New Zealand’s most significant exports to Japan and they continue to attract Japanese investment such as Sumitomo Corporation’s acquisition of Southern Canterbury juice manufacturer, Juice Products New Zealand in 2014.
New Zealand’s largest export to Japan, aluminum, accounts for 16.6 percent of the total goods exported to Japan (USD 2.2 billion).
The country’s leading smelter, New Zealand Aluminum Smelter (NZAS) produces one of the purest aluminum’s in the world at 99.9% purity is partially owned by Sumitomo Chemical (20.64%) with the majority share of ownership being held by Australia’s Rio Tinto. Over 55 percent aluminum produced at NZAS is exported to Japan.
“Every year the NZAS board gathers in New Zealand in May and Tokyo in November where we continue to increase our understanding of each other’s culture – this is truly an international relationship with the focus on the successful operation of our aluminum smelter in New Zealand,” says Stew Hamilton, NZAS Chief Executive.
Japan-based industrial machinery manufacturers and leading Japanese automotive brands such as Toyota and Suzuki have found success in New Zealand’s open market and are contributing to the Japan-New Zealand economic relationship.
“Japan and New Zealand believe in free trade and advocate for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or TPP11,” says Takata.
“Our hope is that when this agreement comes into effect, companies from both countries will develop new areas of business together.”
The government of New Zealand is encouraging investment in biotechnology, information communication technology (ICT), infrastructure, film production, renewable energy, oil and gas and well-established commodity sectors.
In the coming years, the eyes of the world will be on Japan as the nation hosts both the 2019 Rugby World Cup and the 2020 Summer Olympic and Paralympic Games. In addition to their passion for all things sports related, Kiwis are rediscovering their love for Japan.
“New Zealand is a great sporting nation,” concludes Takata. “Our close ties will be further strengthened over the next few years through our shared pursuit of sporting recognition and our desire to further the partnerships and friendships shared between our two nations.”