Understanding Asia

After two solid years of frankly sub-optimal international engagement on Zoom, the Asia New Zealand Foundation has spent a fair bit of time planning international travel. This has involved careful research into where we can actually go and how to get there, risk management documents, and trawling the internet to make sure we don’t miss any testing or paperwork requirements (note: the IATA Travel Pass mobile app is helpful in this respect).

It’s not clear if we will ever return to the pre-pandemic travel experience. Kiwi travellers will have to navigate various border, quarantine and testing requirements around Asia – and download local apps. Things will simply take longer, there is more complexity, and it is likely you will spend more time in one place.

Much like it has been for New Zealand, deciding how much to open up, and when, has been a delicate political balancing act for many Asian countries. And a few, most notably China, remain all but closed.

But despite the hassles of travel planning, the bottom line is New Zealand businesspeople and leaders of all stripes need to start getting out to Asia. Zoom just isn’t going to cut it when it comes to getting a feel for changes on the ground or for valuing relationships.

And with the announcement that New Zealand’s borders will be technically reopening to all visitors and visa-holders at the end of July, now is also the time to start planning to host guests and showing some manaakitanga.

Looking back to 2019 – the last full pre-pandemic year — six of our top 10 trading partners for goods and services were in Asia. While border closures have negatively impacted services such as tourism and international education, Asia has remained a crucial part of the picture. In 2021, the top five export destinations for New Zealand were China, Australia, the United States, Japan and South Korea.

And yet we hear barely anything in our news media about what’s going on in Asia, and how rapid developments in the region might shape New Zealand. Prime Minister Jacinda Ardern’s recent trip to Singapore and Japan represented a brief blip in coverage.

“We were also interested to see the report identifying a lack of language capability and detailed market knowledge as the two biggest challenges when it came to establishing links. They were seen to be bigger challenges than competition, logistics or trade barriers.”

How to re-engage

So, what are some of the challenges businesses may face in re-engaging with the region? And how can they address these?

Last year, the Asia New Zealand Foundation got some hints from a research report we published looking at South Island business links to Asia. ‘Te Waipounamu and Asia: South Island business connections with Asia now and in the future’ canvassed the views of 115 companies with existing links to Asia, and 35 that were considering establishing links.

While the report’s focus was on the South Island, the findings were relevant to businesses across the country. In particular, the research highlighted the importance of personal connections and networking. It was striking how many of the businesses – well over half – had connections with Asia going back more than a decade.

Asked about the most useful forms of support and advice when establishing links with Asia, South Island companies said that working with existing Asian business partners, attending trade expos, cold-calling suppliers and distributors, and using personal and professional contacts were important tools.

In short, time spent on the ground and face-to-face had been central to business success in the region. In that context, Covid-19 had been challenging.

But we were also interested to see the report identifying a lack of language capability and detailed market knowledge as the two biggest challenges when it came to establishing links. They were seen to be bigger challenges than competition, logistics or trade barriers.

That is astounding, but fixable.

The report highlighted that New Zealand businesses have a lot of often-overlooked resources to call on, including within New Zealand’s diverse and rich Asian diaspora communities. They can also talk to different sectors that may already be in market to gain intel.

After two years’ absence from the region, it’s especially important to be on the ground. Asia is fast-moving and vibrant – and New Zealand businesses risk missing opportunities if they don’t understand changes taking place in market.

Many of the transformational changes we have experienced in New Zealand during the pandemic – for instance, remote working, video conferencing, QR scanning (a Japanese invention, by the way) – have been even more pronounced in Asia.

The pandemic has sped up developments in fields such as artificial intelligence, digital payments, online retail and livestreamed sales events, social media apps and delivery services. Increasingly, Asia will be leading the rest of the world in digital transformation.

Political divides

Meanwhile, wider political developments are also having a profound effect on the region. In March, the Asia New Zealand Foundation hosted an online meeting with our Asia Honorary Advisers, 15 leaders who collectively hold a wealth of knowledge about developments across Asia. They also know a lot about New Zealand.

We heard New Zealanders should not underestimate the shifts that the pandemic and then the Russian invasion of Ukraine had caused. These would impact everything from supply chains to security arrangements.

Kiwi businesses will need to keep a careful eye on wider political developments to understand how that might be impacting business partners. A simple start is not to talk about Asia, home to some 4.7 billion people, as a homogenous whole.

In summary, what happens in Asia will be at the heart of success for many businesses in the years ahead. As a country, we like to think we’re savvy when it comes to our Asia engagement. After all, we’ve done well out of trading with the region.

But there are plenty of signs that we continue to underrate the value of Asia knowledge and capabilities, and that New Zealand businesses need to invest in growing Asia-related skills among staff.

We need Asia more than it needs us, so we can expect to have to do the heavy lifting.

We are holding a panel discussion to discuss the challenges and opportunities facing directors of export businesses now that New Zealand has reopened its borders. Wednesday, August 3.

The panel includes global business leader and advocate Phil O’Reilly, Peter Chrisp (NZTE Chief Executive), Gráinne Troute (Chair of Tourism Industry Association), and Steven Maharey (Chair Education New Zealand).