Trade Relations between New Zealand and China: An Empirical Analysis in the Context of a Free Trade Agreement

Abstract: This study examines the bilateral trade relations between New Zealand and China from 1980 to 2012. It examines the strength of the trade relationship using export and import intensity indices; identifies the degree of trade reciprocity using a 'trade reciprocity index'; estimates the magnitude of intra-industry trade using the Grubel-Lloyd and Aquino indices; and analyses these indices to consider how trade patterns and relations have changed between 1980 and 2012. Significant growth in trade between New Zealand and China has been achieved since the signing of a free trade agreement in 2008.The intensity of trade has strengthened; and there has been growth in reciprocal trade and intra-industry trade for a number of industries and product groups. The results foreshadow future bilateral trade, investment, technology transfer and economic relations between New Zealand and China