Speaking on CNBC's Squawk Box Asia, Karen Silk said exporters are actively redirecting products they previously would have shipped to China into alternative destinations. "We've certainly seen many of our exporters looking at, and actively diverting, product that they would have been looking to put into China, into other markets as well," she said, adding, "It is not the only export market."
China remains New Zealand's biggest trading partner and top customer, accounting for about one quarter of all exports in the 12 months through July. Looking ahead to 2025, New Zealand's goods bound for China were close to twice the value of shipments to the next two markets - the U.S. and Australia - combined, per the New Zealand China Council. That concentration makes any demand wobble in China hard to ignore.
New Zealand supplies over half of China's dairy imports, a lead established under a 2008 trade deal that culminated in all NZ dairy receiving duty free treatment in 2024. A pullback from Chinese buyers will test how quickly that trade can be spread elsewhere. At the same time, higher global prices for staples such as wheat have given New Zealand's pasture based farmers a relative cost edge even as volumes to China ease, Silk said. "In some ways, New Zealand actually benefits from a price perspective when we have those supply factors going on globally," she noted.
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China's growth slipped to its weakest pace in years in the second quarter, under pressure from tepid domestic demand and a protracted property downturn. The Middle East war and related shipping snarls through the Strait of Hormuz have also pushed up global commodity costs, further constraining Beijing's appetite for commodity imports. Meanwhile, the Reserve Bank of New Zealand raised its cash rate to 2.75% on Wednesday - a second straight hike - and signaled another increase could arrive by year end. For your wallet, the takeaway is simple: trade routes are being rewired in real time, and policy is tightening while exporters rethink where their goods go.
