The announcement came after a bilateral meeting between New Zealand’s Trade Minister Todd McClay and Chinese Commerce Minister Gao Hucheng.

Negotiations will start in the first half of 2017 and include “technical barriers to trade, customs procedures, cooperation and trade facilitation, and rules of origin” as well as agricultural cooperation and environment.

The agreement, signed in 2008, has seen a phased removal of tariffs between the two countries. Between 2009 and 2014 trade between New Zealand and China doubled to NZ$20 billion (€13.4bn).

China is now New Zealand’s biggest dairy export market.

In an illustration of the importance of China to Fonterra, New Zealand’s largest dairy processor, reported that infant formula, UHT milk and powders sold by its Chinese branch generated €8.3m in online sales in 24 hours on “Double 11” day earlier this month, the Chinese retail equivalent of Black Friday.

Fonterra chair John Wilson said: “The upgrade of the free-trade agreement provides an opportunity to strengthen the already-strong dairy relationship between New Zealand and China.”

Fonterra has substantial investments on the ground in China including a strategic partnership with Beingmate, a leading Chinese infant and child food manufacturer. Fonterra has also completed two farming hubs and is working on a third in partnership with multinational Abbot Foods.