Illegal and unlawful transportation of two protected varieties of kiwis to China ended up causing a feud between the Global superpower China and the biggest exporter of Kiwis - New Zealand.
China And New Zealand Relations
The Dragon has always been in the headlines for its exploitative policies against its people and different countries worldwide. China’s relations with New Zealand are no different. In a statement by Prime Minister of New Zealand Jacinda Ardern, it came to light that differences between China and New Zealand are becoming harder to resolve. Ardern also said that there are many things on which New Zealand and China “cannot, do not and will not agree”. However, she added that these differences do not define the relationship between these two. Still, she identified that “This is a challenge that we, and many other countries across the Indo-Pacific region, but also in Europe and other regions, are also grappling with.” The sentence is more than enough to understand what she meant to say without actually saying it.
Kiwifruit Business, New Zealand
Kiwifruit is one of the biggest businesses in New Zealand. Zespri International Limited, based in New Zealand, is the world’s largest exporter of kiwifruit. In addition, they sell a unique variety of kiwifruit known as Sungold kiwifruit. Zespri Global’s operating revenue has been NZ $3.89 billion for the year 2020. Actinidia Chinensis (golden kiwifruit) is a bronze-coloured kiwifruit with smooth skin and little to no hair. The flesh is usually golden yellow to bright green, and they are more aromatic and sweeter than other varieties, making them supreme. Unfortunately, Zespri has also suffered losses in 2010 in the cultivation of golden kiwifruit due to the PSA bacterium. As a result, the fruits and vines collapsed altogether, costing Zespri a whopping loss of NZ$900m.
Zespri soon invested millions of dollars along with other funders searching for an alternative and found “Gold3 “, which was found after shortlisting 40 varieties out of an initial 50,000. Gold3 or Sungold kiwifruit is more disease resistant but not as sweet as golden kiwifruit. Zespri’s investment got successful, and the golden kiwifruit took over the kiwi exports. Zespri registered exclusive ownership of Sungold kiwifruits in different countries around the world.
Sungold Kiwifruit Smuggling And The Feud
In 2016, private investigators of Zespri came across a rumor that its exclusive Sungold variety has been spotted growing locally in China. Soon the rumor turned into a reality as private investigators tracked down a businessman named Haoyu Gao, who owned a kiwi orchard in Opotiki, New Zealand. Gao openly admitted that he cultivated Sungold kiwifruit and invited them to see his orchard for themselves, as mentioned in the court documents.
In 2018, Zespri registered a case against Chinese kiwifruit grower Haoyu Gao, Xia Xue (his wife), and Smiling Face Limited. Justice Sarah Katz found out that Gao breached his licence agreement with Zespri and New Zealand’s intellectual property law. She also wrote in her judgment that Gao smuggled “Budwood” of Gold3 variety to China and got paid a large amount of money for it. The court declared its decision against Gao and ordered Haoyu Gao to pay $15m in damages. Zespri won the courtroom battle but lost the war against the spread of its extraordinary Gold3 variety in China. According to a report by Zespri, unlawful cultivation of its Gold3 variety has grown to more than 5200 hectares between 2019-2021.
Besides all this, China is also one of Zespris Sungold kiwis’ biggest buyers and one of the biggest trading partners of New Zealand, valuing $19 billion a year, which has put New Zealand in a tight spot. Exasperated, Zespri put out a proposal on the table for licensing the illegally produced Gold3 variety in China under the Zespri Brand. This may not be free of risk, but it is the least bad idea, said Stephen Hoadley, Associate Professor of politics and international relations at Auckland University.
As kiwifruit only makes a small proportion of China and New Zealand’s trade, taking any action against China is risky. “In terms of the large trade picture, the kiwifruit is a minor item,” Mr Hoadley said. However, Damien O’Connor, Minister for Trade, Export Growth and Agriculture, New Zealand, said NZ’s government has been in regular talks with Zespri’s over the Gold3 kiwifruit production in China. Still, they stated that it was a private matter. “This is a commercial matter arising from the nature of the situation on the ground. It is not a matter between the Chinese and New Zealand governments,” he said.
However, New Zealand’s kiwifruit regulator did not approve the original proposal by Zespri because they believed that the proposal was of high risk for the producers. Soon after this, Zespri made the required amendments. Currently, Zespri is holding Producer Vote 2021 concerning the proposition that it initially made and left the decision in the hands of the growers. The voting started on 31 May and will be open up to 25 June 2021.
Numerous risks surround Zespri, and they have no way out, but it’s better to do something than nothing. Unfortunately, reducing the damage is the least they can do. However, they have faith in their product’s quality and only want to see “Product of New Zealand”, kiwifruit Gold Flourish.