An Analysis Of The Comparative Advantages & Cooperative Models Of The New Zealand And Chinese Dairy Industries

Since New Zealand and China's free trade agreement has come into effect,dairy trade between the two countries has seen impressive growth.Fueled by China's huge demand for dairy,New Zealand's dairy industry has become one of its most important economic pillars.New Zealand and China's relationship has been largely built on China's demand for New Zealand's milk powder,but in recent years,the dairy market has seen a slump and called into question New Zealand's traditional comparative advantage and cooperative model with China.Beginning from an industry chain perspective,this research undertakes an analysis of the upper,middle and lower sections of New Zealand and China's respective dairy industries,including prominent issues facing both.In order to measure New Zealand and China's comparative advantages in the dairy industry,a revised version of Balassa's Revealed Comparative Advantage Index was then used to analise the industry as a whole,followed by individual dairy products which revealed the evolution of New Zealand and China's respective comparative advantages over a 20 year period.This was followed by an analysis of New Zealand and China's cooperative dairy model and finally policy suggestions based on the findings.Results showed that New Zealand's model for growth and trade with China has relied too heavily on milk power,leaving the country vulnerable and inflexible in the face of market changes.This research will provide valuable information regarding the development of the dairy industries in New Zealand and China,both from an internal and global perspective,as well as academic proof of factors driving investment and cooperation.