Saturday, May 14, 2011

The kiwi and the dragon
By Simon Collins
5:30 AM Saturday Apr 9, 2011

Neighbours gather at the Chong house in Botany for a pot luck dinner. Photo / Greg Bowker

In some ways, Chinese influence in New Zealand has grown faster and more strongly than anywhere else in the world.
In a special Herald series over the next week we look at what that means for this country.
Today, Simon Collins gives an overview of the impact of China on New Zealand's economic and cultural landscape.

Some time in the late 1990s, Tina Peters looked out of her car at an intersection and realised that almost all the other faces she could see were Asian.

Tina, a nurse, moved with her family from Papatoetoe to the fast-growing Botany area 12 years ago. Suddenly their ethnic landscape switched from the traditional Kiwi mix of European and Polynesian to include a surprising number of Chinese.

"With our children there has been that period of confusion, of bewilderment, for a little while of absolute fear thinking, 'I don't understand this'," she said at a pot-luck dinner at a Chinese neighbour's home on Neighbours Day last month.

"I didn't know how to communicate. You are missing the communication, and then there's that fear of, 'Oh my God, is my country disappearing?"'

New Zealand's ethnic Chinese population jumped more than seven-fold in the 20 years to the 2006 census, from 19,600 to 147,600.

In Auckland it rose almost 10-fold, from 10,500 to 97,400. Parts of Botany, Epsom and New Lynn are now more than 30 per cent Chinese.

Sociologist Paul Spoonley says the scale of this ethnic transformation, like the scale of New Zealand economic reforms in the same period, was unparalleled globally.

"The mix in Canada and Australia is almost identical, but they had much larger Chinese populations to start with," he says.

And of course this local ethnic change came just as the Chinese homeland burst on to the world stage. Two decades ago, even including Hong Kong, China produced only 2 per cent of global output and ranked 11th in the world. Last year, with 9 per cent of world output, it passed Japan to become the second-biggest economy on Earth.

Three years this week after signing a landmark free trade deal, China has already surpassed the US as New Zealand's biggest trading partner outside Australasia for both exports and imports, our leading source of international students, our second-biggest source of immigrants after Britain, and our fourth-biggest source of tourists.

Over the next week the Herald will report on how these dramatic shifts are transforming our economy and our society. In some respects Chinese influence has grown more strongly here than in any other country outside Asia.

Economically, our exports to China have leapt ahead through the past three years from just under $2 billion to $5 billion a year, when even Australia's exports to China only just more than doubled and China's overall imports stuttered through the global recession.

Dairy exports have quadrupled from $450 million to $1.9 billion. China is now by far our biggest dairy customer and the main driver behind recent record dairy prices.

Fonterra China managing director Philip Turner says this is only partly because of the scandal with melamine-contaminated Chinese-made milk which killed at least six babies in 2008, turning more sophisticated consumers towards imported milk.

"To a large extent this is simply demand exceeding supply," he says. Although Chinese milk production has grown exponentially from 6000 tonnes to 35,000 in the past decade, demand has grown even faster. Fonterra now supplies 5 per cent of the Chinese market.

Wood exports have quadrupled too, from $240 million to $1 billion a year since 2007. Timber Industry Federation head Brent Coffey says most of this is raw logs to feed China's property boom.

Our imports from China have grown rather less quickly because of our recession, from $5.6 billion to $6.9 billion. But the longer-term shift from costly local production to cheap Chinese imports, played out in extreme form here since import protection was largely abolished in the 1980s, has seen dramatic falls in the prices of clothing, footwear, toys and homeware.

Arguably, despite the loss of jobs in formerly protected industries, these cheap Chinese imports have made us all better off - at least in the short term.

"For 15 years up to 2007-08, the world enjoyed very stable prices and abundant capital with resulting cheap interest rates, and both of those things were very largely China's doing," says economist Srikanta Chatterjee.

"The Chinese effectively said: we'll lend you the money to buy these goods; therefore we had low interest rates. That is the very great advantage that we enjoyed."

This may not last. As China's own wages and living standards rise, its massive surpluses may diminish and it may have less surplus capital to lend.

The rest of the world will then need to either cut spending or raise output to live within our means.

China's abundant capital helped whiteware giant Haier buy a 20 per cent stake in Fisher & Paykel Appliances two years ago. Another Chinese company, Agria, is bidding for 50.01 per cent of our leading farm service firm, PGG Wrightson.

Overall Chinese investment is still minuscule at $5.6 billion or less than 2 per cent of total foreign investment. But the Chinese company Natural Dairy's failed bid for the 16 Crafar family dairy farms shows that Chinese investors are looking for opportunities in food and other natural resources.

Still a highly controlled society, China was slow to open up overseas travel. New Zealand and Australia became the first countries outside Asia to get "approved destination status"; this was only in 1999.

Total outbound travellers from China more than quintupled worldwide in the past decade to 56 million last year. The numbers going to both Australia and New Zealand almost quadrupled to 454,000 for Australia and 123,000 for New Zealand, propelling China into fourth place for visitors to both countries, behind each other, Britain and the US.

Today's launch of three weekly China Southern Airlines flights between Guangzhou (Canton) and Auckland adds capacity for an extra 25,000 visitors.

The airline already flies to Sydney and Melbourne, added Brisbane last November and plans 50 flights a week to six Australian cities by 2013.

There has also been an explosion in the numbers of Chinese students abroad. Visas for new Chinese fee-paying students here leapt from just 46 in 1998-99 to almost 20,000 in 2001-02, lifting the numbers here to a peak of 56,000 in 2003.

Anatole Bogatski, who was the Auckland Chamber of Commerce's international manager at the time and later established his own language school, says New Zealand was the first country to abandon quotas on Chinese students.

"We had a very low bar to cross and relatively easy immigration rules on converting their student visa into permanent residence," he says.

The boom collapsed almost as quickly as it occurred, when Education Minister Trevor Mallard made students prove that they could pay their future course fees and living costs.

Two language schools, Carich and Modern Age, closed in 2004 leaving students stranded.

New Chinese student visas plunged to under 2500 in 2005-06 before climbing back to a modest 4700 last year. Total Chinese fee-paying students have stabilised at around 21,000, or 22 per cent of all international students.

This reversal is purely a New Zealand story, as Chinese students studying overseas kept rising worldwide from under 300,000 in 2003 to almost 1.3 million last year. In Australia they increased from 48,000 in 2002 to 168,000 last year.

More broadly, like India, Europe and more recently New Zealand, China has long had a sizeable diaspora of citizens who have left to seek better lives elsewhere.

Apart from a handful of 19th century gold miners, New Zealand barred its doors to those migrants by denying permits to non-British citizens with few exceptions right up to 1987, when the policy changed to seek skilled people and rich "business investors" from anywhere.

The change came just as Britain was preparing to hand Hong Kong back to China in 1997. Hundreds of thousands of Hong Kong's elite sought refuge abroad - 380,000 went to Canada alone between 1980 and 2001, and 25,400 arrived in New Zealand as permanent or long-term migrants in the decade up to 1997.

A similar exodus from Taiwan brought almost 20,000 migrants to New Zealand in the same period. And then, just as many of the Hong Kong and Taiwanese migrants actually started going home again from all countries, China's 1999 relaxation of travel restrictions sparked a new outflow from China itself. Chinese permanent and long-term arrivals here jumped from 3500 in 1999 to 16,000 in 2002.

This new influx was dominated by students and their families, and fell away again as the student boom collapsed. By last year China, including Hong Kong, was back down to only our third-biggest net source of immigrants behind India and Britain.

But the net effect of the two waves of immigrants was to lift the total ethnic Chinese share of New Zealand's population to 3.7 per cent by the 2006 census, the second-highest in the OECD behind Canada (3.9 per cent) and ahead of Australia (3.2 per cent). The 1.9 per cent of our population born in mainland China is higher than for any other OECD country.

Like all modern migrants, the Chinese are mobile. A fifth of all the Chinese approved for residence in the six years to 2009, and 40 per cent of the Taiwanese, had been absent for at least six months as at last June, compared with 14 per cent of migrants from Britain.

A 2007-09 study by Asian studies professor Manying Ip found that two-thirds of ethnic Chinese NZ citizens or permanent residents still identified only with their home country, and most of the rest identified with both countries. Only four out of 78 identified solely with New Zealand.

She found that many families alternated between their homelands and New Zealand or Australia, often getting educated here, returning to China or Hong Kong to work or to care for ageing parents, then coming back to New Zealand for their own children's education.

"The new Chinese migrants are astute and wish to keep all options open," she says.

Joe and Marianne Noma, an older Chinese couple at the Neighbours Day gathering in Botany, originally migrated to Melbourne in 1985 and still have a home there as well as in Auckland. Their son works with them in their property development business here, but their daughter is in Melbourne and they may go back there.

But Lisa Chu, who came here with her parents when she was 6 in 1986, may stay here with her Malay/European/Maori fiance, engineer Shariman Saad. She wants her future children to learn Chinese, but regards herself as a "Kiwi".

Their Neighbours Day host, Pastor Samuel Chong, who brought his family here from Malaysia eight years ago, says he has committed his life to New Zealand but is also proudly Chinese. "When I received the citizenship certificate they said, in a letter, you don't have to put down your own culture," he says. "It's so kind."

Chong says their Botany street has five Chinese families, four from Korea, two from India, a Filipino and about 20 Europeans.

Twelve years on, Tina Peters has become used to the changes.

"When we moved from where we were and came up here we started being that little bit more integrated and talking to everyone and having a bit more courage - well, this is how it is, we'd better start talking to people," she says.

Her husband John, who works with Chinese colleagues as a scientist at Middlemore Hospital, says the change "has not been negative at all".

"We have learned about the food and different cultures," he says.

When their daughter graduated with a Bachelor of Science degree at Auckland University about eight years ago, almost all her fellow graduates were Chinese. She and her husband now live in Singapore and plan to teach their children both Chinese and Japanese to equip them for the modern world.

Gradually our culture is changing. Saad and Chu buy takeaways from a variety of countries and enjoy Saturday night markets at the Pakuranga shopping centre. "It's Chinatown," Saad says.

Chinese businesses have sprung up in growing suburbs such as Botany and Albany, and have revitalised older parts of Auckland such as Dominion Rd and Northcote.

Tina Peters says Hong Kong and Taiwanese investors drove up local house prices in the 1990s.

"Every time we went to buy a house we were vying with five or six Chinese families," she says.

"We would put in an offer and they would just go over the top. Then you find out they had bought three of them. Of course house prices just went whoosh."

But the migrant investors were less noticeable by the time Saad and Chu bought their house four years ago. Indeed as a developer, Joe Noma believes Chinese builders are holding down new housing costs.

"We sell [building sites] to builders. In the last two years virtually 80 to 90 per cent are bought by Chinese builders," he says.

"They work hard. They work on Sunday, they work late in the evening. There's no such thing as 9 to 5."

But Dave Brown, who represents Auckland on the Certified Builders Association board, believes Chinese builders predominate only in the Botany/Dannemora area where many of the developers are also Chinese.

"They are prepared to work hard and are pretty competitive," he says. "But I'll stick my neck out and say I don't think they are taking work off New Zealand guys."

Hard-working Chinese students are changing the culture in our schools too. In 2009, 8.7 per cent of Asians who passed level 3 NCEA achieved with excellence, compared to 5.3 per cent of Europeans, 1.5 per cent of Maori and 0.5 per cent of Pacific students.

The Rev Stuart Vogel of the Auckland Chinese Presbyterian Church recalls resentment in the early years when Chinese students started "sweeping all the prizes" at his children's school, Mt Roskill Grammar. "Then people came to realise that they do the work for it. If you want the prize you have to do the work," he says.

At Auckland University, Ip says her students now work much harder than when she started teaching there in 1982 - due to course fees and a tougher job market as well as Chinese rivals.

"It was much more relaxed at that time, students negotiated about deadlines," she says. "That would not be allowed now."

In much the same way, Chinese preferences for apartment living and for large houses on small sections have contributed, along with rising land prices, to the shrinkage of the Kiwi quarter-acre section.

"Most of us are from the city and we don't know gardening," explains Pastor Chong.

The immigrants have helped expand public transport. Asians accounted for 82 per cent of the increased use of buses and trains by Aucklanders commuting to work between the 1991 and 2006 censuses. The census does not count journeys for study, but a glance into almost any term-time bus into central Auckland shows the effect of Asian students.

Of course Asian migrants have added to road traffic too, accounting for 38 per cent of Auckland's increased commuting to work by car between 1991 and 2006. Nationally, Transport Ministry figures show Asian drivers were involved in 9 per cent of all crashes in 2009, exactly equal to their share of the population.

Although many migrants are still not working in the fields where they qualified, some are breaking into the professions. Just over 5 per cent of our medical doctors are Chinese.

Local-born Chinese writers such as 2010 NZ Post Book Awards winner Alison Wong and film-maker Roseanne Liang have won recognition in mainstream Kiwi culture, and Chinese faces are now taken for granted on the TV news and in popular shows such as Masterchef.

It has been harder going in politics, with Labour's list MP Raymond Huo the sole Chinese MP since Pansy Wong resigned last year. There are no Chinese on the new Auckland Council and only three out of 149 people on local boards: Peter Chan in Henderson-Massey, Lily Ho in Whau and Wayne Huang in Howick.

Arguably Pacific people were only really accepted as New Zealanders when rugby stars such as Michael Jones and Tana Umaga started playing for the All Blacks. The Chinese may never make the All Blacks but sport can still provide links into mainstream society, as Huang found in February when he got the Howick Local Board to sponsor a visiting Chinese martial arts group.

On the other hand, he could not get the board to write an invitation letter to an 800-strong group from a major Chinese steelmaker who wanted to visit here after a reward trip to Australia. They didn't come.

"We lose a lot of opportunities like that," he says. "They need respect. They need to feel welcome."

In Botany, Pastor Chong believes cross-cultural interaction will increase gradually.

"If we organise more lantern festivals and Chinese New Year celebrations, more Kiwis will come and join us and slowly the Kiwis will understand us," he says.

"But one thing they need to know is that the world is like a village. You can't stay by yourself - you need to accept anybody who comes to your doorstep."
By Simon Collins | Email Simon

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