New Zealand's goods and services exports fell by more than $14 billion in the year to March as COVID-19 impacted the global economy, but trade with China increased as a percentage of total trade with the rest of the world year-on-year.
According to figures released by StatsNZ on Wednesday, total exports of goods and services fell $14.3 billion - or 16.5 percent - to $72.6 billion in the year ending March 2021. Imports fell $14.6 billion to $70.3 billion.
"This fall in exports reflects the changing shape of New Zealand’s economy over the past year, where we saw a dramatic drop in both travel and transportation services, leading to the increased importance of our primary industries," StatsNZ international trade manager Alasdair Allen said. "Other contributing factors were the slight falls in the traditionally strong export commodities of dairy and meat."
Dairy exports are down from being worth $16.6 billion in the year to March 2020 to $16 billion, but it's travel which has unsurprisingly seen a dramatic 63.1 percent drop from $15.8 billion to $5.8 billion.
Travel exports reflect visitor spending in New Zealand, including that by international students. In May, StatsNZ revealed the number of people crossing New Zealand's border had fallen from 13.6 million in the year to March 2020 to 319,700.
Our top trading partners are China, Australia, the European Union, the United States and Japan.
In the year to March, StatsNZ figures show China accounted for about 23 percent "of the total trade with the rest of the world", up from 19 percent in the previous year-to-March period.
The Asian nation made up 26 percent of total goods and services exports and 20 percent of imports. Exports were worth $19 billion, down from $19.9 billion, and imports were worth $13.8 billion, up from $13 billion, creating a roughly $5.1 billion trade surplus.
Exports to China that saw increases were wood and dairy products, while New Zealand's biggest increasing imports from the country were electrical machinery and equipment.
"While we didn’t see the usual spending of Chinese visitors during the past year, China has continued to be a strong export market for New Zealand wood, meat, and dairy," said Allen.
Overall, New Zealand's trade surplus was $2.3 billion, including $6.1 billion with the European Union.
Aotearoa's reliance on China for trade has been a significant point of debate this year, with accusations New Zealand is prioritising money over speaking out on human rights abuses. That's despite New Zealand releasing a number of statements condemning China's treatment of the Uighur people in Xinjiang and Beijing's interference in Hong Kong.
However, Foreign Affairs Minister Nanaia Mahuta has been clear in recent months that Kiwis exporters should diversify.
She raised the "value of diversity" to long-term economic resilience in an April speech.
"It is prudent not to put all eggs into a single basket. The New Zealand government will continue to work with business to pursue a range of trade opportunities."
Mahuta elaborated on that in an interview with the Guardian in May, in which she said New Zealand may find itself drawn into the trade "storm" between Australia and China.
"The signal I’m sending to exporters is that they need to think about diversification in this context – COVID-19, broadening relationships across our region, and the buffering aspects of if something significant happened with China. Would they be able to withstand the impact?"
Trade Minister Damien O'Connor is travelling to Europe later in June for negotiations on free trade agreements with the European Union and the United Kingdom.
In January, New Zealand and China signed an upgrade to their free trade agreement.