Recall those who voted against the China FTA

February 1st, 2014 at 2:00 pm by David Farrar

chinaexports

 

This is a graph of our annual to . The growth in exports since we signed a with them has been almost beyond belief.

In the last six years we have exported $33.7 billion of goods to China. In the six years before that, it was $9.9 billion.

Remember those facts as you also recall that NZ First and the Greens railed against the China FTA, and voted against it.

I hope Labour are proud of the China FTA. They should be. May the protectionists in their party and the affiliated unions not gain dominance.

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84 Responses to “Recall those who voted against the China FTA”

  1. lolitasbrother (589 comments) says:

    haha good post Farrar. NZ Nat Government 2014.
    New Zealanders are not stupid

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  2. thedavincimode (6,590 comments) says:

    Prostitution of our sovereignty … blah blah … bah humbug … green economy pfft …

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  3. lolitasbrother (589 comments) says:

    quote Farrar last line
    I hope Labour are proud of the China FTA. They should be. May the protectionists in their party and the affiliated unions not gain dominance.

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  4. wikiriwhis business (3,883 comments) says:

    The TPP is a whole new ball game that only serves the interests of US corprations and will give them power to sue govts who refuse to let them enter borders citing loss of earnings which amounts could be as spurious as police drug raid claims.

    The TPP will also allow corporates to trade mark any particular item exclusively to themselves – alternative/natural medicines etc which grow freely in nature and even indigenous to certain nations.

    Anyone who knows the extent of damage NAFTA did to the US will concur the TPP is a very dangerous fascist bill which is why it is so secretive.

    Praise God for the TPP leaks. Edward Snowden is being nominated for the peace prize.

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  5. kowtow (7,953 comments) says:

    Chinas’ is not a free economy.

    Nothing changes that fact.

    Meanwhile make money there while you can,but don’t put all your eggs in the celestial basket,it can’t last for ever.

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  6. Jack5 (4,905 comments) says:

    Yes, it was smart to be early into a free trade agreement with China, however the Government has done poorly in trade diversification. NZ’s fortunes are now tied to one product – milk powder – to one market. That market is a communist, centrally run state, so it’s a bit like having one customer.

    (Pinus radiata log exports are tiny in comparison with milk powder to China.)

    Because of the shakiness of vast lending by “shadow banks”, the Chinese economy could be headed for the top of a cliff, and God help NZ if it goes over.

    The Financial Times talks today of China’s “debt powder keg … only getting more tightly packed”.

    A tiny, high-yield investment product offered by one shadow bank has just had to be rescued. A tiny investment product, colourfully named “Credit Equals Gold No. 1”, it is held by only a few hundred people, but it has focused international attention on the state of China’s economy.

    The Financial Times article:

    http://www.ft.com/intl/cms/s/0/2795839a-8902-11e3-bb5f-00144feab7de.html#axzz2s1pZEACL

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  7. Kea (11,878 comments) says:

    Fantastic stuff and long may it continue. :)

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  8. CryHavoc (45 comments) says:

    Wiki, what you’re saying is a mountain of pure horseshit drummed up by the clinically anti-American elements of our academia and chatterati. And Edward Snowden being nominated for a Nobel is about as credible as… Barack Obama winning one.

    Anyway I’m as pro free trade as anyone, and agree with your central tenet DPF, but in the interests of objectivity the critical graph to show alongside this one would be Aussie exports to China. The profile would be much the same, absent an Aussie/China FTA. Don’t get me wrong – the NZ China FTA is a brilliant piece of work but there are simple geo-economic factors applying here as well as the FTA.

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  9. Colville (2,191 comments) says:

    CryHavoc.

    I feel (without any research) that the Aussie graph would have flatlined a couple of years ago and taken a huge dive recently.

    Anyone care enough to prove me wrong? (or right? :-) )

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  10. duggledog (1,439 comments) says:

    Principles are all well and good but they do not feed a family. The views from Russell and Winston’s high horses must be amazing but not very sustaining.

    Imagine, for example, if the clown Lange had not f***ed off the Americans.

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  11. CryHavoc (45 comments) says:

    Possibly true Colville – Chinese will privilege kids’ food over minerals I guess, in straitened times, and we’re good at food. Also the tariff preferences will be diverting NZ trade to China over other destinations.

    I agree with others here though – nobody wants to get too reliant on China, for a whole host of reasons. Lucky we also have an excellent FTA with ASEAN and will hopefully also get Japan and the US through TPP…

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  12. Jack5 (4,905 comments) says:

    Re Colville (2.30) – Australia has been trying to complete a Free Trade Agreement with China since 2005, and it looks till distant, though it has an FTA with the USA and expects to sign one with Japan in a few months.

    The latest figures I’ve seen have Australian trade with China accounting for about 40 per cent of Australia’s exports and these China exports are up about 50 per cent year on year.

    On Aussie’s Japan FTA progress:

    http://thediplomat.com/2014/01/july-date-for-australia-japan-free-trade-deal

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  13. Maggy Wassilieff (312 comments) says:

    @ Colville… not too difficult to find
    http://www.dfat.gov.au/publications/stats-pubs/australias-exports-to-china-2001-2011.pdf
    check out the growth in minerals exports

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  14. Maggy Wassilieff (312 comments) says:

    and a bit more up-to-date info on the continuing expansion of Australia’s exports to China

    http://www.afr.com/p/national/australia_china_trade_no_longer_BR858fGu3LCDM0n3NzUDhJ

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  15. Jack5 (4,905 comments) says:

    Adding more recent material to Maggy Wassilieff’s 2.41 link, is the Sydney Morning Herald:

    http://www.smh.com.au/business/the-economy/trade-deficit-narrows-as-australian-exports-to-china-hit-record-high-20140107-30ffk.html

    Maggy, I’ve just read your 2.45 link. Australia will be in trouble, too, if China’s economy tanks. That means our second biggest trade, with Australia, won’t be much of a cushion for NZ in that case.

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  16. Manolo (13,517 comments) says:

    The figures speak for themselves.
    Long live NZ free trade with other nations, against the will of socialists and communists.

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  17. Jack5 (4,905 comments) says:

    Re Manolo (2.54 post).

    Free trade agreements are great if you regard them as pragmatic tools for getting your exports into other markets with minimum foreign duties and restrictions.

    However, the ideological goal of “free trade” is a flaky, IMHO. How can you have truly free trade between countries when at least one manipulates or controls the exchange rate of its currency? How can you have fully free flow of investments when their ownership rules differ. For example, NZ allows foreigners to buy its arable land, China doesn’t allow foreigners to buy its land.

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  18. NK (1,138 comments) says:

    Australia will be in trouble, too, if China’s economy tanks. That means our second biggest trade, with Australia, won’t be much of a cushion for NZ in that case.

    Our second biggest trade is in trouble now because of almost parity between the currencies. Thank goodness for the China FTA to offset this. Many exporters hurting now with our dollar close to the $AUS.

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  19. PaulL (5,983 comments) says:

    @Jack: only if you don’t accept the general economic analysis that says free trade even when the other end doesn’t reciprocate is still valuable. If the French want to send us heavily subsidised cars, that doesn’t hurt us. It only hurts us if we decide that we want to have a domestic car industry. It is closely related to the theory of relative advantage, and it’s pretty much basic economics.

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  20. Jack5 (4,905 comments) says:

    Re Paul L at 3.27:

    I, too, learned in economics 101 the principles of free trade. However, I’m also aware of the economic gains of those who manipulated free trade, such as (then) West Germany and Japan in their remarkable economic recoveries after World War 2, and China in its dazzling economic growth since the death of Mao. Using tactics usually subtler than open subsidies, they outmanoeuvred and outpaced trading partners who fully believed in, and fully followed Ricardo’s theory of comparative advantage.

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  21. MH (690 comments) says:

    And once China’s internal dairying production comes on line and up to speed and modernisation?

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  22. PaulL (5,983 comments) says:

    @Jack5: or, alternative view, Japan and Germany had massive investment after the war, most of their stock of productive assets were destroyed. New plant will help to make you really productive. As for China, sure, they’re growing fast. But their GDP per head is still a fraction of ours, and I know which country I’d rather live in. Japan never really passed the west in GDP per head – ultimately the limiting factor is innovation, and Japan still aren’t so good at that.

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  23. wat dabney (3,721 comments) says:

    Jack5,

    West Germany and Japan “manipulated freed trade” by offering better goods at better prices. That was a win for consumers in other countries, not a loss.

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  24. Viking2 (11,281 comments) says:

    While that may be so we still have a problem. We still spend more than we earn.

    NZ’s trade deficit remains despite better terms

    By Brian Fallow
    5:30 AM Saturday Feb 1, 2014

    Exports of dairy products rose by $2b to $13.4b, or 28% of all goods exports. Photo / APN

    The most favourable terms of trade for 40 years and a $3.1 billion rise in exports to China were not enough to close the trade gap last year.

    Imports exceeded exports by $259 million or 0.5 per cent in 2013, Statistics New Zealand reported yesterday. But that was an improvement from a trade deficit of $1.2 billion, or 2.5 per cent of exports, in 2012.

    Exports rose $2 billion or 4.4 per cent to $47.5 billion last year despite a 5 per cent rise in the trade-weighted exchange rate.

    The improvement was dominated by a $3.1 billion or 45 per cent increase in exports to China, which more than offset declines in exports to the next three largest markets: Australia (down 8 per cent), the United States (down 4 per cent) and Japan (down 11 per cent).

    how are we going to fix that??

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  25. ZenTiger (425 comments) says:

    But look at their human rights record – forced abortions, capital punishment, corruption in government officials, seizure of property, persecution of religions – all in themselves seemingly not a reason to cease trade.

    But if they treat gay people badly, I think the writing is on the wall for this agreement.
    Or am I getting confused with the Russian Winter Olympics?

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  26. Jack5 (4,905 comments) says:

    Watt Dabney posted at 4.30:

    West Germany and Japan “manipulated freed trade” by offering better goods at better prices. That was a win for consumers in other countries, not a loss.

    There was far more to it than that, Watt Dabney.

    For example, one factor in the economic rise of countries including Germany, Japan, and China may be the legacy of German economist Friedrich List, who it has been said to have had strong influence on both Japan during its post-war recovery, and in Deng Xiao-Peng’s reform of China after Mao’s death.

    An idea of what List thought comes from this quote (via Wikipedia ) about Britain at the height of its industrial and economic prowess around the end of the nineteenth century:

    …it is more than probable that without her [highly protectionist] commercial policy England would never have attained to such a large measure of municipal and individual freedom as she now possesses, for such freedom is the daughter of industry and wealth…

    I don’t know or care whether List was correct, but I believe economic pragmatism beats economic ideology when it comes to growth and prosperity. Talk free market, practise whatever is best for us.

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  27. Kea (11,878 comments) says:

    “ZenTiger (389 comments) says:
    February 1st, 2014 at 5:03 pm
    But look at their human rights record – forced abortions, capital punishment, corruption in government officials, seizure of property, persecution of religions – all in themselves seemingly not a reason to cease trade.”

    Gosh if you added war mongering and military aggression, removed forced abortions, you could be talking about America.

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  28. Kea (11,878 comments) says:

    “Imagine, for example, if the clown Lange had not f***ed off the Americans.”

    You do realise that the American economy is only able to function thanks to China lending it money?. If China asks for its money back America is stuffed. Of course America would simply start a war… over human rights… if that ever happened.

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  29. MrTips (150 comments) says:

    Whilst I am glad we are exporting well, I do hope there is a collective Govt plan for when China implodes in 2 years.
    George Soros and others have made their positions – have we?

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  30. Scott1 (481 comments) says:

    Kea,

    I doubt it.
    The US would revalue its debt using some sort of accounting trick (like it did with gold previously) and tell China it owed it much less and then refuse to pay it back anyway.

    If I owe you $100 dollars it is my problem, but if I owe you 10 trillion dollars – it’s your problem.

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  31. Kea (11,878 comments) says:

    Scott1, true enough. China will never call in the loans, as it would stuff up there economy. The US is beyond bankrupt and has been for some time. But it is all done with smoke and mirrors so it can continue on.

    The time that America stood for human rights has also passed and people need to update their thinking instead of simply parroting propaganda like idiots. The Chinese have an appalling human right record, but at least they keep it in house and do not spread it around the world as the US does.

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  32. Kimble (4,412 comments) says:

    And once China’s internal dairying production comes on line and up to speed and modernisation?

    Then we will look back on the money we were able to make while we could as the best of times.

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  33. Tautaioleua (292 comments) says:

    David Lange was right. The yanks had to be told. They were still high on WWII fumes and were not used to hearing the word NO!

    We made headlines all over the world for being the first to tell them what to do with those fumes.

    :-)

    Now look, the Americans are on the way out…

    Just don’t let the door hit you.

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  34. wat dabney (3,721 comments) says:

    Jack,

    I believe economic pragmatism beats economic ideology when it comes to growth and prosperity.

    Well, quite.

    Free markets have been shown to completely out-perform command economies, and ‘protectionism’ is simply cronyism which benefits the connected few at the expense of everyone else.

    Britain as a whole was far better off importing Japanese cars and killing-off British Leyland. And in recent years has again been producing huge numbers of cars in the private sector, a situation which would never have happened had British Leyland been kept alive with huge subsidies all these years.

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  35. Kimble (4,412 comments) says:

    I, too, learned in economics 101 the principles of free trade.

    And you think that was all there is to it?

    I am sick of hearing people refer to their Econ101 “education” before trying to demolish a much more sophisticated and nuanced economic theory than their rudimentary education ever prepared them to understand. Especially sick of them following it up with things like “fully followed Ricardo’s theory of comparative advantage” as if it was some religious dogma or economic plan.

    After telling us all how they took Econ101 and thought it wooly and not specific enough, they will usually say they went on to Engineering or something similar. And of course they are now back with their engineering style of thinking and will generously apply it to the unfortunate study of economics. Spare me.

    Declaring “economic pragmatism” as superior to economic theory is the same as declaring observation as superior to theoretical physics.

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  36. Crusader (295 comments) says:

    Edward Snowden is being nominated for the peace prize.

    Nobels are rapidly becoming a farce, especially the peace prize.

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  37. ZenTiger (425 comments) says:

    @Kea: I left off mass surveillance to ensure no such confusion :)

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  38. ZenTiger (425 comments) says:

    @Crusader: What are you talking about?

    Obama thoroughly deserves his Peace Prize for shutting down Gitmo within a year or two of his Presidency (well, not so much shutting down, as explaining how committed he is to shutting down Gitmo as soon as he’s outlawed the drone strikes that indiscriminately kill civilians). It’s inspiring, and quite frankly, the change we were all looking for.

    And Al Gore, for inspiring Nations to start thinking more about the potential of using Global Warming to justify shutting down modernisation of third world countries, and ensuring they do not progress so much that they get above the breadline and destroy multi-national profits. And all those international summitt meetings, encouraging thousands of people to burn up jet fuel to the far reaches of the planet to discuss first hand how important it is to ban all forms of air travel to far reaches of the planet in order to ave mankind. Brings a tear to my eye, the sacrifices those sorts of people make for our future.

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  39. Kea (11,878 comments) says:

    ZenTiger , I agree Gore deserved that prize. He practices what he preaches too by going on to become a billionare from his green companies and carbon dealing. He is a true inspiration. If only he were black…

    [ Gore is poised to become the world's first "carbon billionaire," profiteering from government policies he supports that would direct billions of dollars to the business ventures he has invested in.]
    http://www.telegraph.co.uk/earth/energy/6491195/Al-Gore-could-become-worlds-first-carbon-billionaire.html

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  40. smttc (711 comments) says:

    What? Trading freely with China with a population of over 1 billion that long and only 36 billion?

    As for Winston Peters. What a stupid old cunt.

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  41. Recidivist_offender (27 comments) says:

    Does this include the Prime NZ skunky buds and protected wildlife and aborted foetuses( for medicinal purposes) ive been sending in the mail??

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  42. safesally (47 comments) says:

    wikiriwhis business (2,833 comments) says: The TPP is a whole new ball game that only serves the interests of US corporations …….

    How do you know all this when nothing has been announced yet?

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  43. Recidivist_offender (27 comments) says:

    Eliminate all free education and healthcare. Disband the Police and the Defence forces. Shut down all government departments. Disband Parliament. Disband all councils.

    Zero tax, Zero government, Zero laws.

    Anarchy and every man and women for themselves. The Way of the future.

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  44. Jack5 (4,905 comments) says:

    Watt Dabney posted at 6.31:

    Free markets have been shown to completely out-perform command economies..

    So China is a free market economy, Dobney? With a central bank run by the Communist Party, and the recovery from Maoism influenced by Friederich List? Germany’s present strength uninfluenced by its tool, the euro, which keeps it currency far lower than it would be under a Deutsche mark?

    Even Hong Kong, perhaps the most pure example of free market success, controls and always has controlled its currency by a currency board system.

    Free markets are an ideal and an ideal only, Dobney.

    Kimble posted at 6.39:

    I am sick of hearing people refer to their Econ101 “education” before trying to demolish a much more sophisticated and nuanced economic theory than their rudimentary education ever prepared them to understand.

    The reference was to empasise how basic the Ricardo theory is, and if you didn’t pick that up your intelligence is inversely proportionate to your pomposity. Note that “woolly” is spelled with two L’s, or perhaps you only hear that spoken.

    And just what “style of thinking” to you contrast with “engineering style of thinking”, whatever that is?

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  45. Jack5 (4,905 comments) says:

    Whoops, at 8.51, I was needling Kimble about his spelling and mispelled “emphasise”.

    Sorry!

    However, while I’m posting, could SMTTC please clarify what he means in his 7.53 post:

    …trading freely with China with a population of over 1 billion that long and only 36 billion?

    As for his reference to Winston Peters, we can take it, SMTTC wasn’t offered a party seat by Yul Grinner. Still old Winston has probably had more success with the birds than SMTTC has ever dreamed about, if SMTTC dreams about women, that is.

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  46. wiseowl (832 comments) says:

    Well Jack5 @3.11 and Viking@ 4.18 have summed things up nicely.
    What worries me is the small print in all these FTA’s that we don’t see or discuss .It is these parts that give away our sovereighnty .Sell our country and change it forever.

    The weighting in favour of dairy exports is a genuine concern.

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  47. Kimble (4,412 comments) says:

    The engineering style of thinking is that every problem can be solved if you’re smart enough. Its the style of thinking that frames everything a simple problem with known factors and relationships. And it is the style of thinking that has the engineer assuming away the expertise of the experts in the field based on the engineers own lack of understanding.

    Stand back economists, the engineers are here! We did Econ 101 and can safely tell you that your stupid demand curves are simplistic, that homo economicus doesn’t exist, and that none of your theories work in the real world because they only work when you assume everyone is rational, and they’re NOT!

    When in fact it is the curious task of economists to demonstrate to men how little they really know about what they imagine they can design.

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  48. Kimble (4,412 comments) says:

    Free markets are an ideal and an ideal only, Dobney.

    And yet the bastardised versions we actually had, STILL out performed every other economic structure in history.

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  49. ZenTiger (425 comments) says:

    “Zero tax, Zero government, Zero laws. ”

    Can we keep the ones about stopping at red lights, and driving on the left?

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  50. Jack5 (4,905 comments) says:

    Kimble posted at 9.41 an expansion of his view of the role of economists.

    Fair enough, Kimble, but I do not see economists as “the experts in the field”. I would say the experts are industrialists, business people – exporters and importers, – and trade diplomats in foreign posts.

    You say:

    ..it is the curious task of economists to demonstrate to men how little they really know about what they imagine they can design…

    Wow! You seem to put them up there with those working in quantum physics, while I see economists plodding away in a strand of the social sciences, making useful additions to knowledge, struggling with assumptions such as that of the rational consumer, quite skilled at explaining history and the present but, like the rest of us, weak and divided when it comes to forecasting.

    And when, in your 9.56 post you talk about “bastardised versions” of free markets, I think you are in effect supporting the contention that free markets are an ideal, a probably unattainable ideal when we are talking about international trade.

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  51. slijmbal (1,223 comments) says:

    Referring back to some previous posts

    Oz and NZ exports to China both increased a lot over a 10 year period – NZ improved approximately 40% more BEFORE the recent Ozzie slowdown.

    One should not confuse historical British use of military force, diplomatic pressure and economic bullying to enforce economic advantage with protectionism – these are two very different approaches – the US has to a lesser extent tried to copy the old British Empire approach with some success.

    Any FTA that National agrees that sees too many IP and similar rights given away will see them voted out, never mind the basic issues around reasonableness and pragmatism, which properties National are good at. So f**k off the naysayers.

    Currency control is a mugs game and generally costs the regime trying to control the currency.

    NZ is very dependent on the economies of the rest of the world – China has now joined that list as a very large economy – if other economies tank – we suffer. Common sense.

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  52. Jack5 (4,905 comments) says:

    slijimbal posted at 10.10:

    Currency control is a mugs game and generally costs the regime trying to control the currency…

    It’s a mug’s game trying to prop up a falling, weak currency, as Muldoon found out, but it’s not necessarily a mug’s game controlling a strong currency. Taking the top off is a different game from shoring up a currency.

    Last I heard, little Switzerland was still doing okay with its cap on its franc, and China through its surrogate Hong Kong, gave international speculators a serious hiding when the speculators tried to break the Hong Kong dollar-US dollar peg a few years ago.

    China controls its currency now, and does well at that. As I see it, Germany’s management and protection of the euro is another form of currency control, as it is a major beneficiary of having the weaker euro rather than a strong Deutsche mark as its currency.

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  53. Jack5 (4,905 comments) says:

    For those who don’t believe China’s economy is at any risk, read this, which says a Chinese slowdown could slash the Australian dollar exchange rate 25 per cent:

    http://www.cnbc.com/id/101379823

    and this:

    http://asia.nikkei.com/magazine/20140116-Reading-2014/Politics-Economy/China-crisis-may-be-unavoidable

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  54. Ben Dover (526 comments) says:

    Happy Chinese New Year to you to

    It is fantastic and so is this amasing new
    nuu zealand brand
    http://www.cowala.co.nz/
    COW ALA
    A “NZ” company with an “Aussie Animal” the only thing it needs is political support o it has it
    http://www.3news.co.nz/More-uses-of-Keys-image-on-milk-powder/tabid/1607/articleID/267697/Default.aspx
    here is it?

    Hurrah Furrah for Chinese Communism and Chairman Mao he was only responsible
    for the deaths of 40,000,000 of his own people

    Soon when they own all the productive land in Nuwz Zealand and Astraylia
    they will export even more and everyone can drive tourist buses

    China Proof that Socialism and Communism are effective – Hurrah Furrah

    The Chinese Communist Party – The Peoples Liberation Army – And Chinese State Business
    are the Same thing Hurrah Furrah

    Hurrah Furrah – For Exports

    Check your new global News Paper
    http://www.globaltimes.cn/index.html

    Check the Military Section every 2 weeks and ask why the hurry to build so much?

    China wil have so much military hardware soon it will have to export it
    http://www.globaltimes.cn/CHINA/Military.aspx

    The Chinese are exporters also
    to Japan
    Jets over the disputed Diaoyu/Senkaku Islands

    http://www.globaltimes.cn/content/840194.shtml#.UuzAuSiTQ5s
    look like they plan to export some other things

    exporting is good for businees

    http://www.globaltimes.cn/content/839111.shtml#.UuzBJCiTQ5s

    whle we
    Recall those who voted against the China FTA
    let us Recall those who voted in china ?

    That is no one because they don’t get to vote

    Do they? Because they are communist

    They are so Lucky -Happy New Year

    We have an export graph to prove everything is ok

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  55. slijmbal (1,223 comments) says:

    @Jack5

    Controlling a currency for a strong economy as per your examples does not mean it works – it just means any effects are less.

    There are various methods of influencing a currency and bigger and more influential economies can use those methods to much greater effect cue talk of Germany, China, Japan, US etc. Getting one’s currency undervalued does improve the export vs import balance and associated profit – it just means that the people (as a group) in that economy earned less than they could have and that the drivers were distorted and lots of people have invested in the wrong areas assuming the currency exchanges came back to the right levels, which they do.

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  56. SPC (5,473 comments) says:

    And the comparison to the growth in exports to China by Oz – who do not have such an agreement with China, …

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  57. LesleyNZ (20 comments) says:

    Yes. Hear hear.

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  58. itstricky (1,697 comments) says:

    And the comparison to the growth in exports to China by Oz – who do not have such an agreement with China,

    For some one in the statistician “trade”, DPF really does seem to “drop” some of the important stuff quite often. This is stock standard thinking for anyone with an analytical mind trying to pick up patterns etc, or a rudimentary scientific or math background. In turn, you have to wonder yourself…

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  59. Jack5 (4,905 comments) says:

    slijmbl in his 11.15 post talks of currency “coming back to the right levels, which they do…”

    What are right levels? Right for what?

    Countries that one way or other manage their exchange rates lower seem to do well over decades, from what I can see: Germany and Japan post World War 2, and China post-Mao, Singapore now (managed in so far it is only semi–floating).

    They have had and will have their downturns (as China could be on the verge of), but longer term they seem to fare better than countries with lesser managed or free currencies (eg Britain and NZ).

    And if there are distortions, they needn’t be bad. Germany’s retention of manufacturing compared with Britain’s virtual abandoment of it, has given it economic diversity and muscle compared with Britain, now dependent on its financial sector. (Ultimately the financial sector seems to follow the industrial sector. Look at how many of the world’s big banks have been Japanese or German, and how many soon will be Chinese.)

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  60. PaulL (5,983 comments) says:

    @Jack5: of course, that could have something to do with the relative quality of the manufacturing of Germany and UK. Given a choice between a Leyland and a BMW, I know which I’d want. Perhaps the problem with the UK losing manufacturing has nothing to do with currency?

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  61. Ben Dover (526 comments) says:

    China altered it’s policy on 1 child families and labour camps
    why was that well

    http://www.abc.net.au/news/2013-12-28/an-china-social-reforms/5177120

    Check your stats in 20 years

    China’s top legislative committee has formally abolished the country’s “re-education through labour” camps and approved a loosening of its one-child policy.

    Nice Graph I have to say

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  62. SPC (5,473 comments) says:

    Germany focused on industrial tools, thus it enabled third world production and profited from it. And by joining the EU it prevented the national currency DM from escalating in value, safe within the Euro zone and its QE, the Germans remain cost competitive as a supplier of industrial tools. Otherwise catering to 1% demand for top of the line products.

    Whereas Japan focused on replacing workers with robots to survive depopulation, it remains price competitive for its middle level products because of low yen policies (again QE). It is instead suffering falling domestic demand – deflation of land and property values.

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  63. smttc (711 comments) says:

    Jack5, don’t be worrying about my love life my friend. I’m a 54 year old getting plenty from a beautiful 40 year old.

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  64. Jack5 (4,905 comments) says:

    smttc: good on you.

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  65. Ben Dover (526 comments) says:

    Really nice Graph I have to say
    What does it mean

    if you mirrored it
    it would look like a pyramid scheme

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  66. Jack5 (4,905 comments) says:

    Re PaulL’s 12.15:

    Agreed the Germans are famed for quality engineering, as the Brits once were.

    However, the Germans have a superb environment for this with extensive apprenticeship training (including in scores of business we in NZ don’t have apprenticeships), strong education with a focus on applied subjects for most at tertiary level, a fairly homogeneous population (compared with today’s NZ, for example), and businesses with generally long-term focus. The subtle control of exchange rates has helped German industry greatly.

    The idea that success was handed to them by the Allies stealing their equipment and machinery in 1945 is crap. Their machine tools were already ahead of the Allies’. The seizures were huge penalties, as was Allied seizure of German intellectual property.

    The Germans climbed back by hard slog and patience.

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  67. PaulL (5,983 comments) says:

    @Jack5: not sure what world you live in, but I don’t recall any time in my life when the Brits were known for quality engineering. However, in niches they are – F1 for example. I personally think the unions screwed them, but that’s just me.

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  68. igm (1,413 comments) says:

    You would be very interested to read Fairfax Media community publication “Feilding Herald”. It is courting another Labour academic loser, Dr Deborah Russell, standing in the Rangitikei electorate against Ian McKelvie. She states that Labour is not for farmers and large business but the community. Rangitikei is farmer/large business dependant, and doing exceptionally well, so where does this foolish woman think she is going get votes from. Sickly Josie Pagani got her arse well and truly kicked in 2011 when she appealed to the bludgers and envious, so hopefully this will be another failed socialist in the making. Don’t these losers ever learn, envy, bribery, and lies do not win hard working and successful people’s votes.

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  69. Camryn (551 comments) says:

    @MH – China will never provide its own dairy. It takes 80 litres of water to produce 1 litre of milk. China is very water poor.

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  70. SPC (5,473 comments) says:

    What the Chinese are doing is comprehensive science on animal DNA genomes – to develop superior stock. They will be way ahead of us in cow/sheep DNA knowledge.

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  71. Jack5 (4,905 comments) says:

    Re PaulL at 1.48:

    Britain, where the first Industrial Revolution occurred, pioneered mechanical engineering.

    Google Isambard Kingdom Brunel if you want to learn about one of the many great British engineers.

    Britain has fallen behind, partly because as a society it does not esteem engineers in the way that Germany and China do. China is training two million engineers a year. In Britain, as in NZ, most ambitious kids want to be lawyers or doctors or finance industry rock stars. Feminisation of our cultures hasn’t helped, because engineering appeals less to most women.

    However, patches of Britain’s engineering gene still emerge, as in McLaren cars.

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  72. Jack5 (4,905 comments) says:

    Re Camryn at 7.10 am:

    China already produces more milk in NZ. According to 2011 figures (link below), China is the world’s third biggest milk producer (after the USA and India) and produces twice as much milk as NZ.

    It has large potential. China is 35 times the size of NZ by area, and according to the CIA World Factbook 13.15 per cent of its area is arable or in permanent crops compared with 2.03 per cent in NZ.

    This source says China’s total renewable water resources in 2011 were 2840cu km, and in 2006 it had 629,380 sq km of land using irrigation.

    NZ, says the CIA World Factbook, in 2011 had 327 cu km of renewable water resources and in 2007 had 6,193 sq km of irrigated land. (Both it and China will have more now.)

    The world dairy figures:

    http://www.dairyco.org.uk/market-information/supply-production/milk-production/world-milk-production/#.Uu2rx_mSy4c

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  73. Kimble (4,412 comments) says:

    Fair enough, Kimble, but I do not see economists as “the experts in the field”.

    Which is exactly what I said. Economists ARE experts in economics and that includes international trade.

    You say:

    ..it is the curious task of economists to demonstrate to men how little they really know about what they imagine they can design…

    Wow! You seem to put them up there with those working in quantum physics, while I see economists plodding away in a strand of the social sciences, making useful additions to knowledge, struggling with assumptions such as that of the rational consumer, quite skilled at explaining history and the present but, like the rest of us, weak and divided when it comes to forecasting.

    Boom! That right fucking there is what I was talking about. Are economists “struggling” with the assumption of the rational consumer? No, they fucking aren’t. Your Econ101 did not, in any way, prepare you to critique those with doctorates in the discipline.

    And that wasn’t a my line, it was a quote from Friedrich Hayek. The engineers are those that “imagine” they can “design” an economy. They are dangerous in their ignorance.

    Dont be confused by the term “economic forecasts”. Economics is not about forecasting.

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  74. wreck1080 (3,810 comments) says:

    Phew, thats a crap load of milk powder.

    Too bad it distorts things for non-commodity exporters.

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  75. Ben Dover (526 comments) says:

    That is a lot of mIlk powder and the only thing the Graph is missing is

    a picture of John Key holding up Cowala milk

    with the Bad English strap line

    “Here is it”

    and the Aussie Koala logo I mean Cowala

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  76. Ben Dover (526 comments) says:

    All Hail the Graph

    The Graph is gospel

    Amen

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  77. Jack5 (4,905 comments) says:

    Kimble at 5.55 ridicules anyone without a Ph.D in economics who talks money, and then quotes Hayek.

    So we have someone from the libertarian fringe laying down the rules of debate.

    Kimble, if you are typical of the libertarians taking over ACT, Boscewan is better out of it.

    The libertarians can hold their annual meetings inside a Suzuki Swift. Why the fuck would National hand them a safe right electorate?

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  78. Ben Dover (526 comments) says:

    Chinese Graph time for a Quote from Chairman Mao
    I thought it was a graph of the Millions of deaths he was responsible for

    Yes folks that regime buried 460,000 of their own people alive the people who set that place up make
    Adolph Hitler bad as he was look like a Choir Boy

    I hate to bring you bad news – this is not going to end well for anyone

    Still Time to Stop the Commie Crap and Wake up

    “He (Qin Shihuang, first emperor of China) buried 460 scholars alive, we have buried 46,000 alive… You intellectuals revile us for being Qin Shihaungs. You are wrong. We have surpassed Qin Shihuang a hundred fold.”

    Mao

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  79. Jack5 (4,905 comments) says:

    While Kindle and co. bask in their libertarian fog, back to the main point of this thread – the FTA and NZ trade with China:

    A new article in the Telegraph alleging there is a “(US)15 trillion shadow” over China’s banks.

    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10611931/The-15-trillion-shadow-over-Chinese-banks.html

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  80. KiwiSteve (14 comments) says:

    My reservations were not on the likelihood of expanding trade, but on the possibility that China, which is ruthless in its expansion, might one day decide to just ‘limit’ imports from NZ. Should it do so, no one in China will say boo to the government, whereas here, all those who have committed themselves to China-or-bust might just find themselves very exposed and ready… for takeover bids from China’s growing bands of wealthy capitalists keen to buy assets in other countries. It’s happening all over the world and if we were in their shoes it would make a very good strategy, economic or political.

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  81. Ben Dover (526 comments) says:

    might just find themselves very exposed and ready… for takeover bids from China’s growing bands of wealthy capitalists keen to buy assets in other countries.

    >
    That is the plan the reason chinese business can pay more for the Kraffar Farms or any other asset in the world
    is this

    Their Communist GVT bank roles it as being in their long term interests “Suckers”

    Food producing land like the Waikato and taranaki are incredibly valuable when you have that many people to feed
    and trust me once they own it their “global police force that they are building”

    WILL PROTECT IT

    WAKE UP – CHINESE BUSINESS – THE COMMUNIST PARTY -
    AND THE PEOPLES LIBERATION ARMY ARE THE SAME THING

    And not flim flam Centre Right DRONGO can prove it otherwise

    Next time they come down DARE TO ASK WHO ELECTED YOU

    and ALL THESE FAKE COMPANIES are just State enterprises
    that the communist state makes up

    It is a patch global economic invasion

    YOU PEOPLE DO NOT KNOW WHAT YOU ARE DOING AND YOU
    SURE AS HELL DON”T KNOW WHAT YOU ARE PLAYING WITH

    BUT YOU WILL COME 2030

    TRUST ME ON THAT

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  82. Ben Dover (526 comments) says:

    That Graph mimics exactly the meteoric Military Build up in Asia
    that everyone has been ignoring in the hope of not
    offending their “Trading Partners”

    that took over Europe years ago

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  83. Ben Dover (526 comments) says:

    Chairman Mao’s Kiwi cloak to be loaned to Te Papa

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10876945

    Mao was a mass murderer

    what are you going to do next new zealand

    Put Adolph Hilters underwear on display

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  84. Ben Dover (526 comments) says:

    MATCHES THE INCREASE IN ARMAMENTS IN ASIA
    ALMOST EXACTLY

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