A baby formula exporter says successive governments haven't heeded China's warning about its plan to increase locally made formula.

The plan is to raise the current level of Chinese-produced product from 47 per cent of the market to 60 per cent.

It could impact New Zealand businesses, and since the announcement shares in a2 Milk have slumped by more than 10-percent

Kiwimilk is a local infant formula brand.

CEO Marco Marinkovich told Mike Hosking this country's been warned for over a decade, but governments have been asleep at the wheel.

"My mate Kenny, the Chinese chap, 10 years ago he said to me 'Marco, you guys in New Zealand are stupid'. What China's going to do is they will end up owning the supply chain, basically the New Zealand supply chain."

He says there have been a number of cock-ups, most notably the 2008 poisoning that killed six kids in China and saw a further 300,000 poisoned.