New Zealand's economy is expected to have significant gains due to big changes in China which will have a big impact to the island nation's future.
According to reports, the Chinese government is resolving to rebalance its economy. China's Finance Minister Lou Jiwei announced that the country's economic growth target will remain at 7.5 per cent for 2014.Mr Jiwei said hitting the growth target does not matter since the government wants to see more of an increase in jobs growth.
Based on new figures, China's export earnings have fallen at an unexpected rate and faster than any analyst could forecast. Reports said the decline in Chinese exports was the biggest since the global financial crisis.
New Zealand continues to enjoy a strong import growth for goods consumed by the Chinese middle class with a stronger-than-expected rise of 10.1 per cent in February. New Zealand dairy exports continue to show positive growth in China but the same cannot be said for Australian mineral commodity exports.
Since China is New Zealand's biggest importer, the Kiwi economy will stand to benefit from the Chinese government's GDP growth strategy. China relies on the growth of the middle class since data indicates millions are transferring to urban centres and moving away from rural lifestyles.
China's new urban middle class are willing to buy processed dairy products, wine and beer from New Zealand. They can also afford to send their children abroad to study in New Zealand universities. The Chinese urban middle class can afford to visit the country as tourists.
Rebalancing China's economy may be causing the West alarm in the next few years but if proven to be successful, New Zealand stands to be one of the best countries positioned to benefit from the move.
New Zealand is expected to have a bigger growth rate in 2014 as Westpac bank raises its growth forecast to 4.2 per cent from the previous rate of 3.8 per cent. The bank revised its predictions following New Zealand's strong trade performance.
Westpac remains optimistic that the low interest rates and the Canterbury rebuild will be major economic drivers in New Zealand for 2014, but their growth rates may have passed their peaks, according to the bank's chief economist, Dominick Stephens.