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Chances of improved free trade deal with China boosted following John Key's meeting with President Xi

New Zealand's hopes of an improved free trade deal with China that lifts the remaining safeguard tariffs on dairy have received a much needed boost following John Key's meeting with Chinese President Xi Jinping in Beijing.

John Key met with the Chinese President Xi Jinping last night in Beijing. Source: 1 NEWS

Both leaders have agreed that the countries' Trade Ministers should meet in Peru at an APEC meeting in the next couple of weeks to do further work scoping out an improved deal.

Up until now that scoping work has mostly been done by officials, and a face to face meeting of the trade Ministers should be a shot in the arm for the process.

However, while the meeting with Mr Xi may have moved the issue forward, no formal dates for official re-negotiation talks were secured, suggesting there is still a lot of work to do before China agrees to New Zealand's requests.

John Key is pushing for better free trade whilst China is wanting to chase its criminals hiding in NZ. Source: 1 NEWS

Prime Minister John Key described the meeting as constructive and believes prospects for a better deal have been moved on a lot over the last couple of days in Beijing.

He also pointed out that China now better understands New Zealand's concerns about the constraints on dairy in the current FTA and has signaled it will include dairy in any re-negotiation of the deal.

Meanwhile, Mr Key confirmed that President Xi did raise the issue of China wanting to sign an extradition treaty with New Zealand.

China believes up to 60 so-called economic fugitives that have fled China with illegally gotten funds, are in New Zealand.

Mr Key says New Zealand is open to the idea of an extradition treaty and work is being done on the issue by the New Zealand Law Commission.

However, he says it would be wrong to link New Zealand's prospects of a free trade deal to the creation of an extradition treaty with China and says they are two separate issues.