Economists look at international trade with something called a gravity model.
It turns out that trade is like gravity.
Size and distance matter a lot.
New Zealand and Australia are two small countries, but they trade with each other because they are geographically close.
The US and China are far away, but we do a lot of business with them because they are big.
As political tensions increase because the big countries are fighting, what does that mean for New Zealand and Central Otago?
We can get some sense of the impacts by looking at the local economy and national trade figures.
Central Otago is obviously known for its fruit.
The top three markets for New Zealand fruit are China, Taiwan and Japan.
For wine exports, on the other hand, the top destinations are the US, the UK and Australia.
Red meat is another important product from the region.
China is the largest buyer of New Zealand’s meat, buying about twice as much as the second-largest buyer, the US.
Dairy is the largest product export for New Zealand and part of Central’s economy.
China again dominates as the main market by far.
Construction is big in Central Otago.
It requires a lot of imported machinery and vehicles, as well as materials.
New Zealand gets much of its mechanical machinery from both China and the United States, and vehicles from Japan and Thailand.
For iron and steel, our main source by far is China.
For electrical equipment, China again tops the list.
International tourism is also part of the Central Otago economic mix, though it is smaller than the other sectors mentioned.
Pre-pandemic, the largest source of tourists for the country and the district was Australia.
China came in second with about half the number of tourists and spending.
Is there a way to summarise all this?
We depend on China as a market for our exports and as a source of materials and equipment.
We also depend on Australia and the US as export markets for some products and as sources for some imports.
The summary is: Central Otago has many connections to international markets.
International conflict is bad for us, no matter which side we choose.
Of course, international relations isn’t just about making money.
Social and environmental concerns play a role, too.
Still, it’s good to understand where we might be economically vulnerable.