How can NZ prepare its supply chains?

Bill Wang

27 Apr 2022

Dr Bill Wang

Te Manatū Waka – Ministry of Transport is seeking feedback on its just-released issues paper examining the opportunities and challenges NZ faces in future-proofing our supply chains.

AUT Business School supply chain management expert Dr Bill Wang has read the paper and shares his informed perspectives with the Science Media Centre.

What is your overall feedback on the paper?

“This paper is good to focus on low emissions, resilience, productivity and innovation, and equity and safety, but it overlooks the international freight and supply chain challenges. New Zealand heavily relies on international trade, so this paper should not confine itself to the domestic issues. Even so, the four main areas of focus should be in a better balance rather than simply a parallel listing – their priority should be made clear.”

What are the likely implications of China’s COVID-19 crisis for NZ’s supply chains?

“China is our largest trading partner and contributes the biggest trade surplus for us, with two-way trade (exports and imports of goods and services) exceeding NZ$33 billion. The COVID-19 pandemic is putting global supply chains under intense pressure and disrupting trade. Thus, it is significant for NZ to work with China to keep the physical flow efficient and effective.

“China’s Covid crisis has been badly affecting NZ’s supply chains since 2020, e.g. causing shortage of the supply, increasing the lead time from production, transition, and through to delivery (partly because of the low efficiency in the ports in NZ). The situation will continue for a while because China adopts a cautious conservative policy to control Covid. The improvement needs efforts from both China and NZ, influenced by the updated restrictions and policies on Covid around the world.

“In my view, the worst thing is that the Covid crisis has significantly damaged our confidence on globalisation, and the global supply chain, including the China-NZ supply chain. Businesses are seeking local, regional cooperation, but I am positive about globalisation and would like to think it is a kind of spirally-rising self-restoration and development opportunity. Consequently, the global supply chain will improve its resilience to manage bigger challenges in the future.

“Lastly, we should have confidence in the NZ-China supply chain recovery capacity. Both parties, especially China, have experts, advanced technology, infrastructure, and mature supply chain management systems. China has regarded NZ as one of the most friendly and reliable trading partners in the Five Eyes and in the world, so this is our advantage.”

The public consultation period runs until 3 June.

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