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Being “China Ready” means gaining an understanding of the resources and capabilities required to develop, enter, and ultimately grow in the market. By Mike Arand – NZTE China Business Development advisor Lately the question “Are you China Ready?” seems to be heard often and many are starting to ask what does “China Ready” really mean? Without doubt there is opportunity for many NZ companies in China. The top line numbers continue to be staggering – a total population of 1.4 Billion, 446 Million households, 670 Million netizens (internet users), and an economy that is set to have 470 Million middle class households earning over US$15k by 2030 (compared to the expected 133 Million households in USA earning over US$15k at the same time). And, as the Economist recently pointed out, even at a growth rate of 6-7% which is considerably lower than the average of the last few decades, China will add another US$900B to GDP by end-2016. That’s like adding an economy the size of Indonesia or the Netherlands in less than 18 months! Even at this slower growth rate, in the so-called “new normal”, the Economist expects that China is expected to have GDP of 36 Trillion by 2030. So an economy of this size with ongoing growth, with continuing urbanisation and a growing middle class which is driving huge growth in consumer demand must offer opportunity, right? Many of these factors are behind China now competing with Australia for New Zealand’s top export destination. It must be remembered, however, that China is also the top export destination for more than 120 other countries. The trade buyers and the consumers are absolutely spoilt for choice with a myriad of options for products and services with different brands, origins, prices, and a host of other attributes from other imported […]

The manufacturing sector overall is looking increasingly resilient, having coped with a high NZ dollar through improved productivity. – Catherine Beard, Executive Director, MaufacturingNZ As we near the end of 2015, it’s encouraging to note that New Zealand’s manufacturing sector is continuing its expansionary path and new export opportunities are opening up. At the time of writing this, the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI) results were from October 2015, and the seasonally adjusted PMI was 53.3 (above 50.0 indicates that manufacturing is generally expanding). Although this was 1.7 points lower than September, the level of expansion was still healthy. The sector has now been in continued expansion since October 2012. While a lot of the expansion can be attributed to the Christchurch rebuild and a catch-up of building and construction investment in the Auckland region, the manufacturing sector overall is looking increasingly resilient, having coped with a high NZ dollar through improved productivity. We have also seen consistent expansion from other sectors such as food and beverage. The high New Zealand dollar has allowed many manufacturers to invest in new plant and equipment and has encouraged manufacturers to move away from competing on price and to invest in innovation and quality to stand out from the competition. The monthly PMI survey has been a great way of keeping track of the industry trend, with comment and input direct from Kiwi manufacturers themselves. We are grateful for the BNZ’s ongoing support of this important exercise and to all the manufacturers around New Zealand who fill in the 5 minute survey every month. Another survey that helps us keep a good handle on New Zealand’s manufacturing performance is the annual ExportNZ survey, in the field in August-September. The majority of respondents (49%) identified themselves as manufacturers. The main […]

– Dieter Adam, NZMEA We are coming towards the close of another year, and it’s time to reflect on how it has gone for our manufacturers. I will also take this opportunity to give some updates on changes at the NZMEA in the last year and things we hope to achieve into the next year. Much of 2015 can be characterised with the usual volatility, both in markets and the exchange rate, which unfortunately seems to be all too normal in the current global environment. But we have also had a lot of bright spots in comparison to some recent years, notably the shift in the exchange rate, starting its long awaited correction from very high levels. After reaching record highs in the previous year, seeing the long awaited downward trend in our currency take shape through this year came as a relief. Exporters and import-competing manufacturers have felt the pressure of an overvalued currency for a number of years, peaking against the US$ in July 2014, but our dollar has steadily dropped since then and now lies at a far more reasonable level. Similarly for our biggest trading partner, Australia, our currency reached record highs in January of 2015, but again this has fallen back. This correction was helped along by the RBNZ cutting the OCR, better aligning our interest rates with those lower rates around the world. There are also suggestions we may see more cuts in the coming year. This long-awaited downward trend of the NZ$ will help manufacturers be competitive, both in global markets and when competing with imports, as well as helping them claw back some margins – we hope this will help put manufacturers in a better position to invest in their businesses and innovation in the coming year, something that has not been […]

– Zhao Jizheng, Siemens PLM Software The automotive industry faces stricter fuel economy and emissions standards around the world, with varying deadlines for achievement through 2025. These fuel economy and emissions standards, along with improvements to safety, growth of intelligent mobility and customer desires for integrating their lifestyle into the vehicle, have automotive original equipment manufacturers (OEMs) relying more on electronics and embedded software to keep up with an ever growing industry. These trends are causing a fundamental change in vehicle technologies which requires more innovation from automakers and suppliers in alternative propulsion, lighter vehicles and energy optimization. A 2014 Center for Automotive Research report, entitled Advanced Information Technology Solutions: An Engine of Innovation, summarizes this sentiment by saying: “The industry is transitioning from a primarily mechanical-based industry to a software-based industry. In fact, some would argue that the industry is transitioning from a transportation focus to a technology focus.” Adopting these new technologies and product innovations drives more interaction across vehicle systems and components. As the complexity of vehicle systems increases with new types of technology, these innovations demand a fundamental increase in the sophistication of automotive systems. Suppliers must integrate mechanical, electronics and software capabilities as well as system development knowledge to deliver more complex systems. That, coupled with the global growth of the industry, increases the pressure on automotive suppliers to expand their own engineering, manufacturing and supply chain networks around the world, which adds to program and operational complexity. Staying in Front In Asia, suppliers are facing pressure on two fronts – the need to respond to their local market and OEM quickly, because Asia continues to be the growth engine for the automotive industry, and, as the part of the supply chain, they need to collaborate with global OEMs more efficiently and contribute more actively […]