Barry Maggie: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeBarry Maggie: Questions for Oral Answer — Questions to Ministers[Sitting date: 19 March 2014. Volume:697;Page:16811. Text is incorporated into the Bound Volume.]1.MAGGIE BARRY (National—North Shore)to the Minister of Finance: What announcements has the Government made to build on New Zealand’s international economic position?Hon BILL ENGLISH (Minister of Finance):The Prime Minister last night joined Chinese Premier Li Keqiang in announcing the launch of direct trading of the New Zealand dollar against China’s renminbi. This is a significant agreement and concludes negotiations the Prime Minister started last year during talks with President Xi Jinping. The agreement makes it more likely that New Zealand trade with China will in the future be conducted through the renminbi alongside trade currently conducted mainly in the United States dollar. It will make New Zealand businesses more likely to do business with China and do it more easily by reducing the cost of conversion between the two currencies and it will further stimulate our already strong trade links. The New Zealand dollar is now one of only six currencies to be directly traded with the renminbi.Maggie Barry: How will the agreement for direct trading of the New Zealand dollar with the Chinese renminbi build on trade and investment ties between the two countries?Hon BILL ENGLISH: It is the next logical step. The previous Labour-Green Government signed up to a free-trade agreement between New Zealand and China and that has led to a very significant and rapid increase in two-way trade. Last year alone trade in goods between New Zealand and China increased by more than 25 percent making China New Zealand’s top destination for goods exports just marginally ahead of Australia. The Government will continue to work with New Zealand banks exporters and importers that trade with China to raise awareness of the benefits of direct currency trading.Maggie Barry: What other announcements has the Minister seen about New Zealand’s international economic position?Hon BILL ENGLISH: Statistics New Zealand issued balance of payments data for the December quarter of 2013 that shows the balance of payments deficit was 3.4 percent of GDP down from 4.1 percent—the smallest annual deficit for a couple of years. It was driven mainly by an improvement in the goods balance driven by the value of dairy product exports at record highs. There is still work to be done to improve New Zealand’s international position but the latest deficit is a significant improvement on the very high balance of payments deficits in the mid-2000s of between 7 percent and 8 percent. Net international liabilities fell to 66.6 percent of GDP the lowest level since 2002.Maggie Barry: How does New Zealand’s balance of payments position compare with other developed countries as a percentage of GDP?Hon BILL ENGLISH: The deficit is now 3.4 percent of GDP less than half of what it was 6 years ago. It is comparable with other similar countries. For instance Australia and Britain have balance of payments deficits of 3.2 percent of GDP and Canada’s is slightly smaller at 2.9 percent of GDP. So there is no indication of a balance of payments crisis just as there is no manufacturing crisis no regional crisis and no jobs crisis.