The economic contribution of ethnic communities

New Zealand is an increasingly multicultural society. Here we look at the different ways that ethnic communities contribute to our economy.

• We estimate that Chinese workers produced $16.9bn in GDP in 2022.
• An estimated 35,700 businesses were owned by Chinese people in 2022.
• Chinese people contributed $4.7bn in retail spending in 2022.
• Chinese individuals contributed an estimated $1.6bn in income tax and GST in 2022.
• The retail spending estimate includes Chinese tourist spending of $74.7m in New Zealand in 2022.
• Our GDP estimate includes $1.2bn that Chinese international students contributed to the New Zealand economy in 2024.
• An estimated 104,000 Chinese adults were living in an owner-occupied dwelling in 2022.

The New Zealand population is becoming more ethnically diverse, a trend that is expected to continue. For example, in the year 2000, 6.2% of the population identified as Asian. In 2025 that proportion has reached 15%, and by 2043 it is projected to reach 20%.

Ethnic communities contribute to the economy is a myriad of ways, most directly by owning businesses (many of which employ people), by being employed in businesses, by paying tax, by spending their incomes at local businesses, by owning homes, and paying rent in tenancies. New Zealand also welcomes visitors from overseas who contribute tourist spending to the economy as well as international students who spend money at local businesses and pay study fees while they are studying here. Many international students remain in New Zealand after they have completed their studies and become employees or business owners.

Using a combination of different datasets such as the Administrative Population Census, the 2023 Census of Population and Dwellings, population estimates and projections, consumer spending, visitor spending and arrivals, and international student enrolments we can sketch out and quantify the various types of economic contributions that ethnic communities make to New Zealand. Census data, in particular, allows us to drill down to specific ethnic communities. In this article we look at the Chinese community. Census data also allows us to look at Indian, Filipino, Korean, Japanese, African, Middle Eastern, Latin American, Cook Islands Māori, Fijian, Niuean, Samoan, Tokelauan, Tongan, Tuvaluan, Latin American, Middle Eastern, New Zealand European, Southeast Asian, and Central and South Asian communities.

Below, we estimate how much Chinese workers contribute to New Zealand’s GDP, the proportion and number of businesses that are Chinese, how much Chinese consumers spend in New Zealand, how much Chinese tourists spend in New Zealand, how much Chinese international student contribute to New Zealand’s GDP and Chinese home ownership.

• Chinese tourist spending is included in Chinese consumer retail spending.
• Chinese international student contribution to GDP is included in the broader estimate of Chinese workers’ contribution to GDP.
• GDP is different to spending; GDP is a measure of the value economic units (businesses) add to their inputs, spending is a closer approximation of the revenue that businesses receive.
• Chinese consumer spending, including tourist spending, as well as spending by Chinese international students, will contribute to the creation of GDP by Chinese workers to the extent that the spending occurs at businesses where these Chinese workers are employed—so there is overlap here. However, much of the spending will be at businesses where no Chinese people are employed, which means it makes a contribution to GDP over and above what is estimated in this analysis.

As of June 2022, Chinese people made up between 1.0% and 11% of employment across New Zealand’s industries. Chinese people made up a bigger share of employment in accommodation and food services, and to a lesser extent retail, and a much smaller share in the primary industries. Applying each of these industry proportions to industry GDP the year to March 20231 and totalling the result across industries, we estimate that Chinese workers produced $16.9bn in GDP in 2022.

Chinese people made up 5.6% of all New Zealanders who received income from self-employment. Using this as a proxy for the proportion of New Zealand businesses that are owned by Chinese people we can apply this to the total number of business units in New Zealand of just over 643,000 over the year to March 2023. This calculation gives us an estimate of 35,700 Chinese businesses. This is probably an underestimate because it could exclude larger businesses where ownership is in the hands of a wider array of shareholders. In these cases, the shareholders would not report self-employed income from the business.

As a benchmark, research by the Ministry for Ethnic Communities found that 17.6% of businesses in 2022 were Asian.2 This was based on IDI research which was based on 50% or more of shareholder wages paid to a person of a particular ethnicity. Only 40% of New Zealand business owners had ethnicity linked to them in the dataset.

Over the year to June 2022, retail spending in New Zealand totalled $113bn.3 Chinese people made up 4.9% of the New Zealand adult population (15+ years of age). In March 2023, the median total personal income of Chinese people in New Zealand was $35,000 compared with the total population average of $41,500. Applying the population proportion to total retail spending then adjusting it downward to account for Chinese people having lower median incomes, we estimate that Chinese people contributed $4.7bn in retail spending in 2022.

As already noted, in March 2023, the median total personal income of Chinese people in New Zealand was $35,000. A person on an income of $35,000 in the 2022/23 tax year would have paid $5,145 in income taxes.4 If we multiply this figure by the Chinese adult population as of June 2022 of just over 201,000, that amounts to just over $1bn paid in income tax. Applying a GST rate of 15% to the $4.7bn in Chinese retail spending amounts to $612m paid in GST. Income tax and GST together total $1.6bn or 1.6% of total tax revenue in the March 2023 tax year.5 This estimate excludes a number of other taxes such Employer Superannuation Contribution Tax (ESCT), Resident Withholding Tax (RWT) and corporate tax.

Over the year to March 2023, Chinese tourists spent $74.7m in New Zealand. This estimate is based on Infometrics analysis of Ministry of Business, Innovation and Employment’s (MBIE's) Monthly Regional Tourism Estimates (MRTEs). By the year to March 2025, this estimate had risen to $1.2bn with Chinese tourist spending making up 11% of all international tourist spending in New Zealand. Over the year to March 2025, visitor arrivals with Chinese citizenship made up 14% of all visitor arrivals.

So, Chinese visitor spending is a little lower than we might expect given their numbers, most likely because Chinese visitors are on lower incomes than visitors from countries where incomes tend to be higher such as the US, Australia, and the UK. Other reasons for Chinese visitors spending less than visitors from some other countries might be that they stay in New Zealand for a shorter period of time. Results from the International Visitor Survey suggest Asian visitors spend less time here than visitors from the rest of the world (excluding Australia).

As part of its announcement to target an increase in international student enrolments to 119,000 by 2034, the Government said that international students contributed $3.6bn into the New Zealand economy in 2024.6 Chinese students made up 34% of all international students in 2024. Applying this proportion to the $3.6bn gives us an estimate of $1.2bn that Chinese international students contribute to the New Zealand economy.

The exact figure will depend on a number of factors, not least the types of courses Chinese students study. Longer courses and higher level courses tend to attract higher fees, and longer courses mean students will be in New Zealand longer, thus contributing more to the economy.

Among international students in tertiary education, Chinese students are more likely than average to be studying at Bachelor Degree level 7 (37% did so in 2024 compared with 32% of all students), Chinese students are less likely to be studying at Certificate/Diploma levels 5-7 and in formal training at schemes levels 1-10. This suggests that Chinese students are staying longer in New Zealand and are studying at a higher level than the average student. So, $1.2bn could underestimate their economic contribution.

In 2023, 53% of adult Asian people owned or partly owned their dwelling compared with an average of 54% across the whole adult population. If we apply the Asian proportion to the Chinese adult population (15+ years old) in 2022 of just over 201,000, that’s just over 104,000 Chinese adults living in an owner-occupied dwelling. The number of dwellings will be smaller because two or more Chinese people could live in a single dwelling.

A much more in-depth analysis using different data sources could yield more accurate results. We could carry out more sophisticated (and therefore more accurate) analysis of the GDP created by ethnic businesses using data from the Integrated Data Infrastructure (IDI) and the Longitudinal Business Dataset, as well as spending by ethnic households using customised Household Economic Survey data. These results can be fed into our Economic Impact Model which estimates the broader economic effects of business operations on their suppliers, and of households spending their incomes at local businesses. If you are interested in us doing this analysis for an ethnic community as a consultancy project, please get in touch.

Our analysis of business numbers could be improved by looking at the GDP produced by Chinese businesses (rather than workers) using business data in the IDI. In the IDI, businesses can be identified based on several definitions:

• ethnicity of business owner,
• ethnicity of majority of shareholders,
• ethnicity of majority of employees.

Identifying all businesses that have either a Chinese owner, or where the majority of stakeholders or employees are Chinese, we can then collate financial data for these businesses from the Longitudinal Business Database (LBD) such as wage costs and Gross Operating Surplus. We can feed this data into our Economic Impact Model to estimate the direct contribution these businesses make to GDP, their indirect contribution through their use of suppliers, and their induced contribution through their staff (and supplier staff) spending their earnings at local businesses.

Our estimate of consumer spending could be improved by collating customised data on average and median household spending by the ethnicity of the household from the Household Economic Survey and multiplying by the number of households by ethnicity from the 2023 Census of Population and Dwellings. The final estimate could be fed into our Economic Impact Model to estimate the induced GDP created by spending by Chinese consumers.

Our estimate of home ownership could be improved by collating customised 2023 Census of Population and Dwelling data on the Chinese adult resident population and the proportion of adult Chinese who own or partly own their dwelling.