The China - New Zealand Free Trade Agreement : strategic implications for the New Zealand wine industry's market entry into China. Submitted in partial fulfilment of the requirements for the degree of Master of Business in the School of Management and Entrepreneurship at UNITEC New Zealand /

by Ma, Ruming.

Driven by trade liberalisation, globalisation has been regarded as a predominant feature of world economy in the past fifty years. It has increased the interdependencies amongst world market and the diffusion of new ideas, technology, products and lifestyles through international market. No country or company can isolate itself from the integrated world economy and market that is emerging around us. As a result of the adoption of the economic reform and open policy, THE economy of China has grown quickly over the past two decades. China consequently was the largest absorber of foreign direct investment in several past years and was the third biggest country of international trade in year 2005. Potential in the market has been targeted by almost all countries and companies in the world. Capturing shares of Chinese market is regarded by entrepreneurs as a vital for further development, even survive. The ongoing negotiation of the Free Trade Agreement between New Zealand and China will provide New Zealand entrepreneurs with enhanced opportunities to enter this tremendous market, in this case, the New Zealand wine industry. However, whether New Zealand companies will successfully be there depend to large extent on what and how much they know about the market, including business environment and consumers’ behaviours. By relatively intensive research, this paper provides essential knowledge of Chinese wine market and suggestions for the New Zealand wine industry on how to enter the market. This research concludes that the New Zealand wine industry needs to enter Chinese market as early as possible. Suggestions on distributional channel Page IV Ruming Ma 4/11/2007 selecting, pricing, packaging and labelling, consumer approaching, as well as initiating promotional activities are discussed and outlined. With regards with characters the New Zealand wine industry, joint ventures and non-production involved wholly owned subsidiaries are suggested as most suitable entry modes for New Zealand wine entrepreneurs to enter Chinese market. Page V Ruming Ma 4/11/2007 Abbreviations ADS: Approved Destination Status AFTA: Association of Southeast Asian Nations Free Trade Area APEC: Asia Pacific Economic Cooperation ASEAN: Association of Southeast Asian Nations CEP: Closer Economic Partnerships CER: Closer Economic Relationship FTA: Free Trade Agreement GATT: General Agreements on Tariffs and Trade IMF: International Monetary Fund ITO: International Trade Organisation MFAT: Ministry of Foreign Affairs and Trade of New Zealand MFN: Most Favourite Nations MTS: Multinational Trade System NAFTA: North American Free Trade Agreement OECD: Organisation for Economic Co-operation and Development RTA: Regional Trade Agreement SER: Strategic Economic Partnerships SME: Small and Medium-sized Enterprise WTO: World trade Organisation Page VI Ruming Ma 4/11/2007