As the sectors severely impacted by the COVID epidemic, Education New Zealand and Air New Zealand have been working together around student travel. The two companies announced a strategic partnership at the Shanghai event, hoping to facilitate more Chinese students to study in New Zealand.

Tourism New Zealand and China’s Trip.com Group signed a memorandum of understanding, working together to jointly promote New Zealand as a great destination across Asia-Pacific markets.

“Through the partnership, Tourism New Zealand aims to provide Asia-Pacific travelers with more convenient booking methods, personalized itinerary planning, and comprehensive service support. We look forward to welcoming travelers to deeply explore the beautiful landscapes and unique culture of Aotearoa New Zealand, as well as experience our manaakitanga,” said René de Monchy, Tourism New Zealand’s Chief Executive.

Edison Chen, Vice President of Destination Marketing & Strategy Alliances at Trip.com Group, said,”With the resurgence of international travel post-pandemic, this collaboration could not be better for both parties involved.”

A Chinese tourism industry insider said that the high profile official visit by the prime minister will definitely encourage more Chinese families to tour New Zealand, adding that the earlier a state leader shows good will to China, the more benefits their home country’s economy will enjoy.

During the event, Hipkins highlighted three premium products and service from New Zealand entering the Chinese market as “important milestones that help New Zealand exports to go from volume to value.”

Fonterra, a dairy giant that has been deeply involved in the Chinese market for 50 years, launched high-end cheese Kapiti, trying to meet the ever-growing needs of Chinese consumers. Maui and Zhong Xuegao reached a strategic cooperation, launching a new sheep milk ice cream. Les Mills, a leading fitness brand popular in many countries, has launched “Les Mills China Academy.”

“The China market is incredibly dynamic and is strategically important to Fonterra. As the world changes, Fonterra changes with it, adapting to the evolving needs and desires of our customers and consumers in China,” Peter McBride, Fonterra Chairman said.

Tmall Global, Tmall supermarket, and Fresh hippo are among the Chinese partners promoting New Zealand products.

As part of the visit, Fonterra chefs demonstrated innovative products inspired by the 24 solar terms of the Traditional Chinese Calendar, combining New Zealand’s dairy expertise with Chinese culture and heritage.

China and New Zealand established diplomatic relations in 1972. Fonterra started to set foot in China in the early 1970s. Today, China makes up approximately one-third of Fonterra’s total exports.

Investment projects on horticulture, subsidiary and industrial crops, plant breeding, production of domestic animals, manufacture of animal feed, integrated farming, aquaculture, agro-processing, boiler manufacturing and agricultural dryer manufacturing are in the cluster that receives incentives on inputs of production for supplying the domestic markets.

The sub-decree is also attached with its third appendix that states that bonded warehouses, million distribution centers and million in-building solutions worth $60 million, $10 million and $20 million respectively are among projects that are incentivized on customs, special duties and VAT, but not incentivized on taxation.

The first appendix of the sub-decree also sets the projects that are not incentivized such as crop and animal production, and other agricultural activities including rice crops with investment capital of less than $2 million or area of less than 500 hectares of land, vegetable crop projects with capital less than $1 million do not get incentives.

There was expectantly a wait for the sub-decree as the implementation of the new investment law even though it has been already put in place as its implementation has faced controversies in terms of taxation, customs and other stuff since promulgation. So, there must be this to be attached with the law for the effective implementation.

The new Law on Investment would enable provinces to attract more investments as it decentralizes the authority from the national to municipal-provincial levels—municipal-provincial sub-investment committee—to approve investment projects worth $5 million or less and investors to get more incentives and care-taking while running projects.

President of Singapore Club Cambodia (SCC) Andrew Tay believed that the document would enable investors to proceed their investment projects more efficiently and effectively.

The new investment law would enable the government to attract more foreign investors into the country as it has provided more incentives such as longer tax holidays or tax breaks and set more attractive minimum investment capital as these things look more competitive incentives given by other countries.

Article 50 of the sub-decree stipulates that qualified investment projects on new automobile assembly to supply the domestic markets are incentivised by reducing 50 percent of customs tax, special duties and VAT if their assembly parts are finished goods with domestically-supplied components of at least three percent and fulfill two of the three requirements.

The three requirements include using at least 400 assembly parts per unit of automobile, investment capital from $5 million up and employing at least 150 workers, according to the sub-decree adding that the reduction is offered up to 90 percent if investors in the category are able to fulfill other requirements set in the sub-decree.

He encouraged the chamber of commerce of both countries to consider the possibility of signing a memorandum of understanding to boost economic, trade and investment cooperation.

“We should consider the possibility of conducting research on a free trade agreement between Cambodia and Japan,” Sorasak said.

Japan is the fifth biggest market for Cambodian exports during the first five months of this year, with the Kingdom exporting products worth $442 million to Japan.

The main exports to Japan were garments, bags, footwear, furniture, cosmetics, paper and office supplies and leather goods.

Cambodia imported machinery, automobiles, electronics, furniture, fabrics and plastics from Japan.

Establishing more FTAs with main trading partners will help Cambodian products gain market access, contribute to economic development, and generate income and jobs for local people, said Lim Heng, vice-president of the Cambodia Chamber of Commerce.

“Currently, under the framework of RCEP and AJCEP, Cambodia’s export to Japan is growing. If we have an FTA with Japan, it will be better. Further growth in exports is expected, contributing to national economic growth,” Heng told Khmer Times.

Cambodia currently has a bilateral FTA with China and South Korea. Last week, Cambodia and the United Arab Emirates announced a Comprehensive Economic Partnership agreement.

In a get-together meeting with garment workers last week, Prime Minister Hun Sen lauded the constantly increasing Cambodia’s export to Japan.

“Despite not having a free trade agreement, Japan is the largest buyer of goods from Cambodia,” the Prime Minister said.

The two countries are celebrating the 70th anniversary of the establishment of diplomatic ties between the two countries in 2023.

The Prime Minister said that he was very proud of the Cambodia-Japan relations for the past 70 years. The premier said that Cambodia and Japan have reached a new stage of comprehensive strategic partnership, which is expected to attract more Japanese investment and open a wider market for Cambodian products.

In a meeting with Japanese ambassador to Cambodia Ueno Atsushi recently, Thong Khon, Minister of Tourism urged the Japanese side for the resumption of Japanese airline company All Nippon Airways’ (ANA) flights to Cambodia.

Heng echoed the remarks, saying that enhancing bilateral trade needs direct flight service.

Heng said that CCC has plans to sign a memorandum of understanding with the Japanese Chamber of Commerce to work on boosting bilateral relationships in investment and trade.

Australia also welcomes the IPEF hydrogen initiative launched today, which will support the widespread deployment of renewable and low-carbon hydrogen and its derivatives.

The substantial conclusion of negotiations on the IPEF Supply Chains Agreement represents another concrete step towards greater economic cooperation in the Indo-Pacific region. IPEF partners will work intensively in the coming months to sign, ratify and implement the Supply Chains Agreement. IPEF partners will also captitalise on the positive momentum to work towards further IPEF agreements covering trade, clean economy and the clean energy transition, and fair economy issues such as anti-corruption.

These IPEF achievements follow the Australian Government’s 2023-24 budget commitment to advance Australia’s trade and investment diversification agenda by investing $25 million in capacity building and technical assistance across all streams of the IPEF work agenda.

The agreed IPEF media statements from the Detroit meetings can be found at IPEF STATEMENT PILAR II SUPPLY CHAINS SUBSTANTIAL CONCLUSION.

Honeywell has launched its new SAF process technology and solution in China and valued China’s low-carbon transformation as a key direction, and hope to find better business paths and platforms here.

The company has recently signed multiple memorandums of understanding with local partners to boost SAF technological development and production at various sites across China.

Among them, Honeywell and Tianjin Free Trade Zone have agreed to jointly explore opportunities for SAF production in north China’s Tianjin Municipality, combining the city’s location and industrial advantages with Honeywell’s ready-now technology and equipment.

In September last year, Honeywell announced its cooperation with Zhejiang Jiaao Enprotech Stock Co., Ltd. to build an SAF production facility in Lianyungang City, east China’s Jiangsu Province. The facility will produce SAF by making use of kitchen waste oil and animal fat as the main raw materials.

Compared with traditional fuels, using kitchen waste oil and animal fat as raw materials can greatly reduce greenhouse gas emissions.

“China provides a suitable place to apply many of our pioneering technologies and solutions, and allows these technical routes to be verified,” Honeywell stated.

Honeywell’s implementation in the Chinese market will also provide a strong reference point for other markets, helping to increase the confidence and impetus of technology application globally.

IMPLICATIONS FOR AUSTRALIAN EXPORTERS

Australian exporters will benefit from growing demand for sheep meat. Australia is the world’s largest sheep meat exporter. The country has strong trading relationships with high-consumption growth markets.

Recent free trade agreements (FTAs) with the UK and India have improved Australia’s export opportunities. Australia is also seeking improved access to the European Union (EU) through the Australia-EU FTA. This FTA is under negotiation.

FIGURE 2 : TOP THREE GLOBAL SHEEP MEAT EXPORTERS (2021)

OUTLOOK FOR GLOBAL SHEEP MEAT TRADE

Between 2019 and 2021, sheep meat accounted for 1.5% of the 120.8 MT of global meat consumption. China and the US are the largest consumers of sheep meat. Australia exported an average of US$3.2 billion of sheep meat each year, accounting for 37% of global exports. New Zealand (US$2.9 billion, 33% of world total) and the UK (US$0.6 billion, 7% of world total) are the other major sheep meat exporters.

The OECD-FAO expects sheep meat consumption to increase by 15% over the next decade to 18.1 MT, up from 15.9 MT in 2021. Countries in Africa are driving consumption growth, where domestic production will meet most of the demand. Consumption is also increasing in Asia and North America, where imports will be more important.

Australia is expected to meet a large share of the growing global demand for sheep meat. The OECD-FAO predicts Australian sheep meat production will increase 19% by 2031 to 806,000 t. This is up from 692,400 t in 2021.

SHEEP MEAT TO BENEFIT FROM GLOBAL INCREASE IN MEAT CONSUMPTION

As countries get wealthier, meat consumption tends to increase. Wealthy consumers in Asia are the main drivers behind increased global meat consumption. The OECD-FAO expects sheep meat consumption in China (+13%) and Malaysia (+11%) to rise over the next decade. China and Malaysia are important markets for Australian mutton exports (sheep older than one year). Mutton is usually less expensive than lamb, which makes it attractive to less wealthy consumers.

SHEEP MEAT CONSUMPTION TO RISE IN DEVELOPED COUNTRIES

Once GDP per person reaches approximately US$40,000, meat consumption tends to plateau. However, sheep meat remains relatively unfamiliar to many global consumers. As familiarity increases, sheep meat has the potential to take a larger share of meat consumption in wealthy countries, even if overall meat consumption remains stable.

Wealthy countries, such as the US, are more likely to prefer lamb. The value of Australian lamb exports to the US increased by 56% to A$1.16 billion in 2021–22, relative to the 2018–19 to 2020–21 average.

PRICES FOR SHEEP MEAT TO RISE QUICKER THAN OTHER MEATS

The OECD-FAO has forecast a 48% increase in producer price for Australian sheep meat over the next decade. The producer price represents the amount farmers receive when sheep leave the farm, excluding transport and processing costs. In comparison, the producer price for beef is expected to be relatively flat.

Increased producer prices are partly explained by an expected increase in the proportion of lamb, rather than mutton, in Australia’s sheep meat production mix. According to data from Meat and Livestock Australia, in 2021–22 the saleyard price of lamb was 36% higher per kilogram than older sheep. This means that as the proportion of lamb increases, the average price received by the producer also increases.

AUSTRALIAN EXPORTS TO BENEFIT FROM REDUCED TARIFFS

Recent FTAs with the UK and India include improved import conditions for Australian sheep meat.

On entry into force, the Australia-UK FTA will almost triple the amount of Australian sheep meat that can be exported to the UK tariff-free.

Under an existing World Trade Organization (WTO) quota, Australia has tariff-free access for over 13,000 t of sheep meat exports to the UK. Once this limit is reached, tariffs increase to 12% + A$2.50 per kilogram. As of 31 October 2022, Australia has shipped 96% of the current sheep meat quota.

Once the Australia-UK FTA enters into force, Australia can export an additional 25,000 t of sheep meat to the UK. This is on top of the existing WTO quota before tariffs are imposed. Australia’s quota will increase each year before reaching 75,000 t by year 10 (total 88,000 t, including the WTO quota).

Under the Australia-India Economic Cooperation and Trade Agreement, the tariff on Australian sheep meat exports to India will drop from 30% to zero.

Australia is also seeking improved access for sheep meat as part of the Australia-EU FTA negotiations. As of 31 October, Australia has shipped 94% of the current sheepmeat quota (5,900 t) to the EU.

FIGURE 3 : AUSTRALIAN SHEEP MEAT EXPORTS BY COUNTRY (2017-2018 TO 2021-2022)

Earlier trade agreements with the US and China, Australia’s 2 major sheep meat markets (Figure 3), also continue to provide benefits.

Australian sheep meat has tariff-free access to the US under the Australia-United States Free Trade Agreement. In 2021–22, Australian exported A$1.2 billion of sheep meat to the US.

Tariffs on Australian sheep meat exports to China are steadily declining under the China-Australia Free Trade Agreement. Since entry into force in December 2015, tariffs on Australian sheep meat have fallen from as high as 23% to between 1.3% and 2.6%. In 2023, the rate reduces to zero. In 2021–22, Australia exported A$1.1 billion of sheep meat to China.

POTENTIAL DISRUPTIONS TO FUTURE SHEEP MEAT DEMAND

Demand for sheep meat could be affected by reduced economic growth, particularly in countries that are large sheep meat consumers, such as the US and China (Source: ABARES 2022). Slowing economic growth will reduce consumer incomes, which could lead to reduced meat consumption, or slower meat consumption growth.

Sheep meat production is concentrated in Australia and New Zealand. Two factors will have a substantial impact on global sheep meat supplies:

• Maintenance of favorable biosecurity conditions in both countries.
• The ability of farmers to adapt to changing weather patterns.

BACKGROUND ON OECD-FAO AGRICULTURAL OUTLOOK

Each year, the Organisation for Economic Co-operation and Development (OECD) and Food and Agriculture Organisation (FAO) publishes the AGRICULTURAL OUTLOOK. The outlook assesses world food supply and demand expectations. It highlights the economic and social trends driving global agricultural commodity markets.

Cambodia’s exports to the US were mostly garments and included goods such as footwear, bicycles and furniture. The Kingdom imports include automobiles, machinery, electrical appliances and electronics.

The Kingdom imported $250.7 million worth of goods from the US during the period, a year-on-year decrease of 2.5 percent, read the report.

According to the GDCE, Cambodia exported $17. 2 billion in the three quarter period, a 22.1 percent increase over the same period last year.

The agreement will boost exports, increase gross domestic product, raise employment opportunities and help speed up the recovery of the two economies affected by Covid-19. The countries can expand trade liberalisation markets in addition to the ASEAN-Korea Free Trade Agreement (AKFTA) and the Regional Comprehensive Economic Partnership Agreement (RCEP).

Vice President of the Cambodia Chamber of Commerce Lim Heng said on Wednesday that the close relationship of two governments and economic ties had built confidence in investors from South Korea to Cambodia, which helped increase the bilateral trade.

The CKFTA will be another factor to attract more Korean investors to the Kingdom, Heng said.

“Korea and Cambodia just signed the bilateral FTA, reflecting the positive progress of mutual trade between the two countries,” Heng said.

“Presently, the pact has not yet been put into force, but we have seen the growth of bilateral trade. So, once it is in force, it will attract more investment to Cambodia from South Korea,” Heng said.

Cambodia mainly exported footwear and other apparel, travel products, beverages, electrical and electronic components, rubber, pharmaceuticals and agricultural products to South Korea.

Bilateral trade between Cambodia and South Korea reached $965.132 million last year, a nine per cent surge from $885.3 million in 2020.

In 2021, Cambodian exports to South Korea amounted to $341.503 million, up by 7.353 per cent year-on-year from $318.112 million, while imports clocked in at $623.628 million, rising by 9.947 per cent from $567.210 million in 2020.