By Bridget Gourlay
July, 1971. A young Jenny Shipley is in her final year of teacher’s college in Christchurch. Halfway across the world in Beijing, Henry Kissenger, on behalf of the President of the United States, has feigned food poisoning while on a trip to Pakistan and is secretly meeting with the Chinese Premier.
Until then, China had been closed off since the early 1950s due to decades of Western colonisation and exploitation. After Kissenger’s meeting, relations thawed. The country that few Kiwis had ever visited, the people that few Kiwis had ever met, opened up. Tourism, immigration and whopping economic growth followed.
Political scientists are calling China the world’s next superpower. Certainly, they’re already a super economy. Forty years on from Kissenger’s famous visit, Jenny Shipley, our first woman Prime Minister and committed Sinofile says some New Zealand businesses have failed to capitalise on the FTA, ignoring the rise of China at their expense.
Shipley says the emerging middle classes in China, and other growing Asian economies like Taiwan and South Korea, provide the opportunity for serious money to be made by New Zealand, and companies should be tapping into them.
There’s no doubt it’s a shift — a shift away from our older trading partners the UK, the US and Australia, and a shift away from the language and culture we’re used to working in.
“Chinese people come to everything from a different point of view, their Confucian values to them are what Christian and Westminster values are to us. For New Zealand businesses doing business in China, they need to understand what’s in the minds of the people. It’s not that they are duplicitous, it’s just how they think.
“Confucius values have a huge respect for authority and have a great link to family ties, so lots of businesses in China are very much connected in terms of family and often New Zealand businesses misinterpret that.”
Because Confucianism values authority, attending trade delegations with either mayors, ministers or prime ministers is an enormously valuable entry point into Asia, because it stamps the approval of authority and often Chinese businesses look to that connection.
“It doesn’t make your business safe, but it’s a very important element to show that you have the approval of the authorities in terms of the way you do business. Again I think a lot of New Zealand businesses don’t recognise the value, perhaps the opportunity, to go on trade delegations with the mayor for example or the minister. It’s something I hope over time New Zealand companies will become comfortable with.”
Confucian Institutes have been popping up around the country as the Government seeks to invest in its China knowledge. Shipley, who visits China several times year and is on the board of the China Construction Bank (the country’s third largest bank) strongly advises businesses to make the most of these.
“Both the language and the culture are important, just as they are with Maori. Understanding the form and interpretation behind what you are seeing happening will improve your business acumen in a complex market.”
She says businesses should either send their senior executives on Confucian Institute programmes or “invest their next generation of smart young things on whom they are relying to help them execute their business strategy”.
Make the most of the FTA
In 2008, New Zealand made history as being the first western nation China signed a Free Trade Agreement (FTA) with. Not the USA, not the EU, but New Zealand was given that honour. China’s economy, even with the worldwide recession, has been growing between eight and 12 percent per annum.
However, Shipley thinks many Kiwi businesses have failed to capitalise on the opportunities the FTA has opened up. She says the best thing businesses could do is use the FTA to access the emerging Chinese middle class market, to ensure the next two or three decades of business success are diversified.
“At the moment some companies are getting their minds around that strategy very well, while others are still quite nervous and reluctant to turn their minds to Asia. Those who do will be very successful in the next two or three decades and those who don’t will continue to try and do business with what are flat economies in terms of their growth potential.”
Opportunity for Canterbury
Shipley sees Canterbury as ripe to do especially well off the emerging middle classes in China — who are demanding our dairy products.
She says Canterbury businesses must develop well-researched brand strategies, “so we’re not just sending bags of milk powder, rather looking at what types of products the Chinese supermarket is looking for.
“Whether it’s the Fonterras, or the Open Countries, or the Synlaits, all of these businesses have enormous opportunity to find business partners in emerging markets like China… (there is) definitely a huge opportunity for Canterbury to double its value add in the next decade. I know you’ve got some great leaders down there who are trying to do just that.”
Shipley is positive in how she sees New Zealand’s economy and how well we’ve weathered the recession. Asia and its strong demand for our products again is key. But so are the choices she made in the 1990s.
She says we, and Australia, took out our subsidiaries to industry and got our foreign debt down at that time, meaning we weren’t as badly hit as Europe is today. “Also, when New Zealand has historically gone into a strong and sustained growth cycle, it has been driven by exports, not by consumption.
“So the shift we’ve seen in the last 18 months, where consumption is reduced and the export led recovery has started to emerge, is a very important sign and gives me a lot of confidence that as long as Europe doesn’t hit another unforeseen bump over and above what we are seeing now, I think New Zealand can be cautiously optimistic that we are coming through this recent difficulty.”
She says Europe and the US have to face up to a harsh reality; they are spending more than they have and that at some stage this trend has to change. “My sense is that the political will is starting to emerge to do that. There may well be a staggered recovery as opposed to a smooth recovery and we’re not going to see the rapid return growth that we experienced in the late 90s and early to mid part of this decade. Having said that I am confident that New Zealand is well positioned compared with many others.”
Born and bred in small town Gore, Shipley trail-blazed her way up the National Party. From first winning her Ashburton electorate, in 1987, it was only 10 years later when she climbed the ranks to become New Zealand’s first woman prime minister.
Shipley doesn’t reflect too much on her political career. She says she’s proud she led New Zealand through the Asian financial crisis in the 1990s with four and a half percent growth, but says history will judge her successes and failures for her.
“There are many things probably in a different time you might have done things differently… I’m having much too much fun chairing four companies and being involved in the Asian markets and the China Construction Bank. These things exercise my mind and fill my time and my curiosity.”
Part of the fun she’s been having is being the vice president of Club Madrid, a group of former democratic leaders, which includes the likes of Bill Clinton, who give advice or do conflict resolution with politicians all around the world. She’s also on the Women World Leaders Council, sharing her experience and mentoring young aspiring women.
Shipley has returned to Namibia this year. She first visited the country in 2008 and was inspired to set up a family trust for a group of schools with her husband and two friends.
“These are fine young people. I hope that they in some way will shape the future of Namibia and the future of Africa.
“I hold the view that it’s the next big thing after Asia, Africa is getting its act together and New Zealand will, in due course, need to think about some very large populations in Africa and the opportunity it offers us and the opportunity we can offer them.”
Despite all her travels and passion for other countries, Shipley says she is first and foremost a Kiwi.
“I’m a New Zealander in everything I do, whether it’s the companies I chair or the companies I advise or the speeches I make. Certainly a great part of my heart lies in Canterbury, but it’s New Zealand I seek to promote. We’ve all got to try and do that, and I definitely try to do that at every opportunity I’ve got.”
1952 — Born in Gore, Southland. Jenny’s father was a Presbyterian minister and she has three sisters
1971 — Qualifies as a teacher
1973 — Marries Burton Shipley
1975 — Joins the National Party
1987 — Successfully wins the Ashburton seat. At 35, Shipley was one of Parliament’s youngest-ever MPs
1990 — National wins the election. Shipley becomes the Minister of Social Welfare and the Minister of Women’s Affairs
1993 — National wins another election. Shipley becomes Minister of Health
1996 — National wins a third election. Shipley appointed Minister of Transport and Minister of State-Owned Enterprises
1997 — Becomes New Zealand’s first female Prime Minister after ousting Jim Bolger in a coup
1998 — National’s coalition with New Zealand First breaks down and Shipley ejects Winston Peters from caucus. National retain the government benches with support from ACT and former New Zealand First MPs
1999— Chairs the APEC summit in July, the first woman to do so
— Loses the general election in November and becomes Leader of the Opposition
2000 — Suffers a heart attack
2001 — Bill English replaces her as Leader of the Opposition
2002 — Shipley leaves politics after 15 years in Parliament
2004 — Becomes the chairperson of the board of Mainzeal
2007 — Shipley becomes a director of the China Construction Bank, China’s third largest bank
2009 — Shipley is knighted and becomes Dame Jenny