Global Insights – May 2022

China

The announcement that the Chinese Government will “strictly limit” overseas travel for “non-essential” reasons. It is the latest initiative to support China’s unwavering zero-covid policy. Despite China’s population being overwhelmingly supportive of the lockdowns the cracks are beginning to show with latest figures showing a spike in those considering migration.

In the past 20 years the average disposable incomes of urban Chinese grew seven-fold from around ¥6.3K to almost ¥44K. Meaning the collective net worth of these consumers skyrocketed from $7 trillion to $120 trillion. This has supported the emergence of a massive consumer class in China, and given rise to the huge increase in the popularity of travel. In 2000, Chinese travellers made around 10 million trips outside of the mainland, mostly to Hong Kong. By 2019, they made 155 million trips, with less than a third to Hong Kong.

As a result, the latest news about the travel ban could go one of two ways. It could further increase nationalism through the resulting isolation. But there is a good chance that we may see a reverse of nationalism from some camps as consumers become fed up with stringent dynamic zero-Covid policies.

Other countries may start to look increasingly aspirational again and, by proxy, brands and products from those lands. The allure of foreign brands may gain appeal as they are considered more exclusive, we may even see the renaissance of the daigou trade as a result, when logistics allow it. The measures may also have an impact of increasing foreign student numbers. Studying abroad remains a way Chinese can get passports and tickets to travel, and could be seen as a pathway to break the cabin fever and explore the world again and this could have positive effects for New Zealand universities preparing to welcome back international students. 

This China insight was written with the help of China Skinny.

UK & Europe

In London, there are plenty of union jacks flying and trifle bowls being dusted off as we gear up to celebrate the Queen’s Platinum Jubilee. Kea World Class New Zealander Monica Galetti was part of a panel of chef’s who judged the hotly contested Platinum Jubilee Pudding competition. Baking royalty, Mary Berry also took part if you would like to try the winning pudding yourself you can find the recipe here. 

Jubilee celebrations will come to a pinnacle in the UK with an extended bank holiday weekend from the  2-6^th June. A good one for Kiwi businesses to put in their diaries as most places will be closed over this period. 

Europe is celebrating the ‘great reopening of tech’ with a number of events taking place across the continent. Including the world’s second largest tech conference, Vivatech, which is being held in France from 15-17 June.  

One of the key themes of the sector in 2022 is that Data is more valuable than ever and with new technology easing privacy concerns, it is more shareable, and useable. Adam Bennett, Commercial Advisor – Technology lead, New Zealand Trade and Enterprise, says the biggest trend for tech companies at the moment is the monetising of data assets. “Data gains value when it is shared.” is a topic which many companies are looking at keenly as a starting point. 

Other Tech events happening over the next few weeks include; 

Money2020 – 7-9^th June Amsterdam, Fintech’s leading trade event for the global money ecosystem. 

Dublin Tech Summit – 15-16^th June 

London Tech Week (13-th 17^th June) 

And our very own Kiwi led – Xerocon which will take place 20-21^st July in London. We look forward to welcoming many New Zealand exporters as possible, with another chance for the great NZ tech story to be shared across the ecosystem of partners. 

At Kea, we are thrilled to be working with NZTE & DIT on a delegation of NZ Tech companies heading this way for London Tech Week.  We are hosting an event for the delegation with members from the broader Kea Community here to connect, discuss and share updates and insights across the markets.  

 If you are heading to Europe and would like to know more about Kea or NZTE activities across these exciting events, let us know. 

Sara Fogarty, Kea UK/Europe Regional Director

North America

As summer draws closer things have been busy in New York. As much as we would like to put Covid behind us, a new wave of infections have forced the city to raise its alert level from medium to high just as the memorial weekend approaches. Although there are no new restrictions yet, the advice is to wear a mask in gatherings and in large groups of people. With only 30% of Americans receiving a booster, it reminds us that we are far from back to normal.

Tech is also in the spotlight with the competition for the nation’s brightest talent heating up, and big companies looking to New Zealand for expansion plans. From 2024, Amazon Web Services has pledged to spend NZ$7.5 billion over 15 years to set up a network of cloud data centres in New Zealand, creating an estimated 1,000 jobs. Microsoft Corp has also announced plans to build data centres in the country.

Greg Cross co-founder and Chief Executive at Soul Machines, a Kiwi AI company with operations in San Francisco, says global companies are going to be hiring from an already constrained labour pool. 

“The pandemic has underscored the ability to work remotely and increased the chances that locals will be picked up by offshore companies. We now live in a ‘work-from-anywhere’ world and the brain drain happens without Kiwis even leaving the country.”

Kiwi games developer PikPok decided to expand in South America, picking Columbia because they couldn’t find the necessary talent at home. Chief Executive and co-founder Mario Wynands says if the company wants to stay cutting edge, it means not only training up our people internally, but also tapping into cutting edge talent internationally.

In other news the University of Auckland has been in town this month. Associate Professor Dr.Christine Woods from the University of Auckland Business School was recently appointed as the inaugural Theresa Gattung Chair for Women in Entrepreneurship and has promoting the initiative at a series of events supported by Kea in New York and San Francisco. 

Gary Fortune, Kea North America Regional Director

New Zealand

Through May the big news has been trade missions, accelerated border reopening, and Budget 22.

Budget 2022 brought with it several big ticket items including a $1 billion cost of living package and $11.1 billion for the health sector. For business and industry we will see $100m for a Business Growth Fund for SMEs, the continuation of the $200m Regional Strategic Partnership Fund, $30m for Advanced Manufacturing Industry Transformation plan, $5m for Agritech Industry Transformation plan and $40m for Primary Industry Transformation plan.

There is also additional tech sector support, with $20 million over four years towards two key initiatives in the Digital Industry Transformation Plan. These initiatives support the growth of the Software-as-a-Service (SaaS) Community and take New Zealand’s Tech and Innovation Story, a marketing initiative led by industry in partnership with Government, to the world. 

Health Minister Andrew Little also unveiled a pre-budget $100 million package for specialist mental health and addiction, to more quickly reduce the lengthy backlog in treatment for mental health issues that have been exacerbated by Covid.

This month also saw the Prime Minister, Minister O’Connor, and a business delegation travel to the United States. This follows April’s trade mission to Singapore and Japan. Trade missions are a vital part of the wider plan to reconnect New Zealand with the world and strengthening partnerships between government, business and industry will help accelerate our strong economic recovery. 

Finally the accelerated border opening has been welcomed by business travellers and tourists alike. New Zealand’s border will now be fully reopened to all tourists and visa holders by the end of July – three months earlier than originally planned. Vaccinated travellers arriving under the Accredited Employer Work Visa category can apply to enter New Zealand from 4 July 2022.

Saya Wahrlich, Global Director, Government & Industry