The signing of a free trade agreement was a watershed moment in New
Zealand-China relations and provided a number of advantages for New
Zealand firms seeking to expand their presence in the Chinese market.
However, it is well established that many businesses in China use informal
relationships (guanxi) to create business opportunities and facilitate their way
through bureaucratic obstacles. Doubts have also been raised in the past
about local governments’ implementing China’s international agreements and
about the current efficacy and reliability of China’s legal institutions.
This thesis examines the informal relationships New Zealand SMEs based in
China maintain with local officials and street-level bureaucrats and how they
experienced the implementation of the FTA. Interviews with New Zealand
businesspeople in Shanghai and Xiamen reveal that SMEs were encountering
problems getting their goods across the border at the lower tariff rates
provided in the FTA. They were very positive about the FTA, however, as the
profile of New Zealand officials and firms had risen considerably. It is
established that New Zealand firms are engaging in collaborative activities
with New Zealand government representatives in an attempt to gain further
competitive advantage and that the practice of guanxi is adapting in response
to Beijing’s attempts to formalise officials’ interactions with private sector
firms. It is suggested that a firm’s reputation (mingyu) with officials may be
becoming established as an alternative to guanxi