New Zealand Companies Stay upbeat on China Amid Rising Competition

July 23 — Despite ongoing geopolitical tensions, economic challenges, and rising competition, companies in New Zealand remain optimistic about the Chinese market, according to a recent report from the leading non-profit organization representing the country’s businesses operating in China.

Over half of the 60 companies surveyed by the New Zealand Business Roundtable in China expressed high or very high confidence in the Chinese market—all while 95 percent indicated at least moderate optimism, as revealed in its 2025 Business Outlook Report.

Several factors contribute to this positive outlook, including expanding opportunities in second- and third-tier cities, where local consumer demand for aspirational products is growing. Additionally, China has become “a quite profitable market” for many New Zealand firms, explained Mark Anderton, Chairman of the New Zealand Business Roundtable in China, during a recent interview.

More than half of the respondents reported increased revenues, and many experienced higher profits in the last fiscal year, showcasing resilience amid tough economic conditions both in New Zealand and China.

Looking ahead, 66 percent of New Zealand companies in China expect their revenues to grow over the next year, with 55 percent predicting higher profits despite challenges back home. Furthermore, over 80 percent plan to sustain or increase their investments in China during the next three years, reflecting China’s ongoing appeal as a growth market. However, the proportion of firms prioritizing China as their top investment destination has decreased slightly—from 84 percent last year to 78 percent this year.

Embracing Localization Beyond Exporting

A significant trend emerging from the survey is the shift toward local production. The percentage of New Zealand businesses producing or sourcing goods within China for the domestic market has jumped to 20 percent this year, up from just 7 percent last year.

Anderton emphasized the importance of localization, noting that companies are increasingly utilizing local talent and expanding beyond major cities to stay competitive.

Among the respondents, 62 percent are optimistic about opportunities in second-tier cities, while 48 percent see potential in third-tier urban areas.

“Traditionally, New Zealand exports have focused on China’s major cities—Beijing, Shanghai, Shenzhen, and Guangzhou,” said David Boyle, CEO of Primary Collaboration New Zealand, a firm supporting small and medium-sized enterprises entering China. “But over the past couple of years, especially since COVID-19, we’ve been able to develop distribution systems that extend into second-, third-, and even fourth-tier cities, provided we have the right logistics and strong customer bases.”

Boyle recently visited cities like Hefei, Zhengzhou, Hangzhou, Chengdu, and Qingdao, where he now sees active customers and direct sales opportunities. He added that disposable income is rising in these smaller cities, driven by lower living costs and young populations seeking greater opportunities for themselves, their families, and interesting companies to work for. “There’s a substantial consumer base in these tiers that can afford our products,” he said.

Regarding direct-to-consumer sales through online channels, Boyle explained that his team analyzes data from platforms like Xiaohongshu (RedNote), Kuaishou, and Douyin (TikTok) to gain market insights. “A large portion of buyers—mainly women between 28 and 48—get their information from these social media platforms. For example, Xiaohongshu directs them to purchase New Zealand apples from Sam’s Club or Freshippo.”

In recent years, social media and live streaming platforms such as Douyin have rapidly transformed China’s marketing landscape, according to Brett Raymond O’Riley, CEO of New Zealand’s Employers and Manufacturers Association. “This is a fast-changing market with innovative ways to connect with consumers.”

Facing Rising Competition and Evolving Markets

Competition remains the primary concern for New Zealand companies in China, cited by 57 percent of survey respondents. Other key challenges include a difficult retail environment and shifting consumer preferences (both at 43 percent), along with geopolitical tensions (29 percent).

Anderton highlighted that Chinese competitors are continuously improving. While New Zealand firms already have a foothold domestically and understand the local market, he believes that establishing a physical presence and hiring local talent are essential strategies to counter intense competition.

Beyond local rivals, New Zealand exporters also compete with other international players. Boyle pointed out that competitors from countries like Denmark, Switzerland, and Ireland market themselves around “a clean, green” image similar to New Zealand’s. “Competition is definitely heating up, and quality expectations are on the rise,” he said.

Preparation before entering the Chinese market is critical, especially concerning intellectual property protections and choosing the right partners, advised Rocky Meng, founder of Sparks Partners law firm. “You need to have everything aligned before launching your business in China,” Meng emphasized, noting his firm’s decade of experience helping New Zealand companies navigate this complex legal landscape.

Anderton stressed the importance of branding with cultural values to stand out. “We’ve leveraged New Zealand’s clean, green reputation, trust, and food quality,” he said. “Moving beyond that, companies should also highlight broader values like community, innovation, and our Māori culture,” he added. Although only 28 percent of surveyed companies incorporated Māori elements last year, 35 percent believe such cultural integration resonates well with Chinese consumers, highlighting untapped branding potential.

Maintaining a ‘Strong but Sensitive’ Relationship

The report also notes a decline in positive perceptions regarding the overall China-New Zealand relationship, with the percentage of firms viewing it as strong dropping from 84 percent to 70 percent. Despite this, the majority still regard the relationship as significant for their success in China, especially compared to similar surveys involving companies from other countries.

The China-New Zealand free trade agreement, signed in 2008, was the first of its kind between China and a Western developed country, and bilateral trade now totals approximately NZD 38.3 billion (roughly USD 23 billion), with China accounting for over a quarter of all New Zealand exports.

O’Riley sees expansion opportunities beyond traditional trade, emphasizing China’s commitment to decarbonization and green initiatives. “In the past decade, China has made remarkable progress in reducing its carbon footprint, making it an ideal partner to help New Zealand decarbonize,” he stated. “China is unique among APEC economies in achieving tangible reductions in carbon emissions over recent years.”

For companies already operating in China or contemplating entry, the key takeaway is the importance of deep local engagement, strategic patience, and flexibility. Those willing to adapt and invest in these areas often find China’s vast market offers ongoing opportunities for growth and profitability, despite increasing competition.