The "Southern Link" places New Zealand in the middle of a global value chain, generating growth in trade, tourism and export opportunities.
On Wednesday, the New Zealand China Council (NZCC) announced that the rapid growth in trade between Asia and South America is opening the door for New Zealand to potentially reap billions in economic benefits as an aviation hub for travel and e-commerce trade.
The Southern Link was proposed by the NZCC in 2019 as a way for New Zealand to capitalize on the growing airborne trade links by making New Zealand a major conduit for the flow of people and goods between Asia and South America.
Transiting via New Zealand offers the shortest air route between many major cities on the two continents, along with time zone advantages and efficient hubbing and servicing. The Southern Link places New Zealand in the middle of a global value chain, generating growth in trade and tourism.
"The report identifies direct benefits of US$1.3 billion for New Zealand's e-commerce, tourism and education sectors over 10 years, and indirect benefits through new employment and construction of hubbing infrastructure. Fully realizing these benefits will require close coordination between business and government, but the value is clear and the foundation of the opportunity is already being built," NZCC Director Rachel Maidment said
Statistics show that China is Latin America's second-largest trading partner, with bilateral trade volume exceeding $300 billion for 3 consecutive years. From Jan to Sept this year, the trade volume between China and Latin America reached $331.88 billion, up 45.5% year-on-year. pic.twitter.com/k6PEZEFnUn— China International Import Expo (@ciieonline) November 23, 2021
Last year, the route was used by LATAM Airlines and Aerolineas Argentinas to transport emergency medical equipment and PPE, and other businesses are now planning to leverage the competitive advantages of routing e-commerce traffic from Asia to South America via New Zealand.
“There's been huge growth in demand from cross border e-commerce between China and South America in the past couple of years. Moving goods through New Zealand has allowed us to exceed our KPIs and ensure faster and easier shipping to our customers. The Southern Link places New Zealand in the middle of a global value chain for the first time, bringing businesses closer to market and unlocking opportunities," Oceania Managing Director Dene Green said.
While the Southern Link is still in its infancy, the route illustrates how New Zealand can assist the economic recovery of the wider region in the post-pandemic world. Increased interconnectivity will generate real value and growth for Asian, South American and New Zealand businesses.