DOMINION’S EXPORT TRADE

Otago Witness, Issue 4029, 2 June 1931, Page 74

DOMINION’S EXPORT TRADE

OPPORTUNITY IN CHINA DEMAND FOR WOOL AND DAIRY PRODUCE. The opinion that China afforded to> the primary producers of New Zealand/ in certain circumstances and along definite lines, a great opportunity for the development of a new market was expressed by Dr Koo, prior to his departure from Dunedin, to our representative. Dr Koo immediately explained that only produce of a certain type would attract the Chinese buyer, that at the present moment considerable difficulties lay in the way of exploiting that market, and that a certain amount of enterprise on the part of Dominion farmers and financiers would be necessary, but he felt positive, he said, that the ultimate result would fully justify the initial expense and trouble involved in opening up the trade. The first possibility, he stated, lay in the exportation of sheepskins to China, particularly to the northern section of the country, where the national gown was made from specially treated skins, upon which the wool had been left to the length of about one and a-half inches, the woolly side of the finished garment being turned in. The present source of supply for these skins was Mongolia, but he was of the opinion that the New Zealand wool was of a more suitable type, although the higher production costs in this country would, in a measure, react unfavourably upon the development of the trade. At the same time he thought that with greater shipping facilities the opening of a market in this respect by trial shipments offered a fair chance of success.

Dr Koo stated that, after having given considerable thought to the matter, he had come to the conclusion that China offered to Australia and New Zealand immense possibilities in regard to the export of wool. The demand from the Chinese for woollen clothing material was increasing rapidly, and in the near future would probably reach immense proportions. He considered, however, that trade in this respect would not be developed along the lines of the export of the raw material to Chinese manufacturers, nor would it be possible, owing to the high production costs, to find a market for the manufactured article. The only manner in which Australia and New Zealand would be able to avail themselves of the advantages of this market would be through the establishing of mills in China itself in co-opera-tion with the Chinese Government, which, he was sure, would be only too willing to work in harmony with outside enterprise. The mills would be run by Chinese labour under skilled European direction. In this manner the manufacturing costs, thanks to the cheap labour available, would be low, while the finished material would be placed on the market free from customs duties. Indeed, being produced within the country and the industry being one in which the Government would have a direct interest, the cloth would probably be the object of a substantial protective duty. As Dr Koo pointed out, the production of cloth for a population of 400,000,000 when the demand was stimulated, as he did not doubt it would be, would involve manufacturing on a huge scale with the consequent demand for the raw material. Questioned regarding the chance which the Dominion might have of opening up a market for her dairy produce, Dr Koo stated that he -thought the possibilities very considerable. The consumption of both butter and cheese was at the present moment relatively very small, but he thought that an extensive and judicious advertising campaign, in which the use of free samples should play a large part, would work wonders. He quoted, as an example of what had been done along similar lines, the success of some of the tobacco firms which, by giving away small packets containing two or three cigarettes had introduced their lines to the people and had built up a huge trade. He saw- no reason, he said, why much the same thing could not be done with regard to dairy produce. The frozen meat trade would, he thought, never offer much scope as far as China was concerned, for- the people had a natural aversion to mutton, particularly in the south, while pork, which was most widely consumed, could be produced locally. Dr Koo, however, stressed the fact that New Zealand could hope to develop her trade with China only if she improved her shipping communication with that country. At the present moment, he pointed out, there were no vessels sailing direct from the Dominion to the Chinese ports, all trade being through Sydney, which necessitated transhipping, with its attendant increase in transportation costs. As things stood at present these costs were so high that little could be done to develop trade, but Dr Koo stated that, to him, there appeared to be little reason why this could not be remedied. The greatest development of world trade in the future would bo in the Pacific, and with China and her teeming millions. Other countries, such as Canada and Japan were realising this, and the responsibility lay with New Zealand’s commercial leaders to see that this Dominion was not left behind.