By Stephen Hoadley

Recent media headlines have portrayed a serious downturn in New Zealand’s relations with China. I believe they are exaggerated. But the question arises: should they be ignored?

The signs of estrangement are several. On the New Zealand side they appear to have been precipitated by:

  • New Zealand First leader Winston Peters’ antipathy to Chinese immigrants over the years.
  • The GCSB, New Zealand’s foreign intelligence agency, warning that Huawei’s 5G hardware and software may facilitate espionage by the government of China.
  • The Labour-led Government’s imposition of stricter criteria for foreign investment and house sales, allegedly aimed at Chinese investors with deep pockets.
  • Defence Minister Ron Mark’s July 2018 defence review identifying China as a challenge to New Zealand’s values and the existing international order.
  • Foreign Minister Winston Peters’ initiation of a ‘Pacific Reset’ and invitation to the United States to play a more robust balancing role in the region.
  • Canterbury University Professor Anne-Marie Brady’s widely cited essay detailing Beijing’s influence campaign via media, political party donations, and co-optation of prominent New Zealanders into China’s overseas business firms.

In turn, the alleged reactions by China include:

  • Denial of landing permission to an Air New Zealand plane.
  • Cancellation of the launch of a major year-of-tourism promotion campaign.
  • Postponement of a visit by Prime Minister Jacinda Ardern.
  • Delay of clearing NZ exports across China’s docks.
  • Reduction of the numbers of Chinese tourists and students coming here.

Public figures such as Don McKinnon and Philip Burdon, trade executive Stephen Jacobi, businessman David Mahon, and Leader of the Opposition Simon Bridges have warned that a deteriorating relationship with China, our number one trade partner, could be seriously detrimental to New Zealand’s economic interests.

While the five actions by China cited above are superficially worrying inasmuch as they seem to indicate Beijing’s disapprobation of New Zealand’s policies, a cautious observer should look more closely into their veracity, significance and context.

First, veracity: All of the events listed above are facts, but are only superficial. Second, significance: in themselves none of these events does fundamental harm to New Zealand’s economy or bilateral relations. It is only by extrapolating the alleged trends that one can discern a threat. Third, context: putting each of these events into perspective is essential to arriving at a balanced view. When each is examined in detail, it proves to be circumstantial, not substantive.

It was an Air New Zealand administrative error that caused the recall of its flight to Shanghai. Bilateral tourism events are unfolding on schedule despite the postponement (not cancellation) of the formal launch. China’s invitation to the Prime Minister is still pending, only the timing is still to be agreed upon, not surprising in light of the hundreds of political and commercial leaders from around the world now courting their Beijing counterparts. And China has extended invitations to NZ ministers without interruption last year and this.

NZTE spokespeople and some exporters have stated either that there is no delay in clearing NZ exports or that the reported interruptions are normal hiccups in a multifaceted and bureaucratic export relationship. And it is China’s own economic slowdown and currency export controls, and competition from other attractive destinations, that account for declining numbers of investors, tourists and students, declines that are in any case modest, not catastrophic.

It should be noted that as at the beginning of March 2019 bilateral commodity trade continues unabated, and there is no indication that China will cease being New Zealand’s premier trade partner in the foreseeable future. This two-way trade is mutually beneficial and likely to remain so. And the NZ Defence Force’s unique five year engagement programme with the PLA, entailing consultations and exchange visits, has continued without interruption.

Nevertheless, there are reasons for prudent concern. New Zealand remains one of China’s smaller trade partners. NZ high-quality food products are mainly optional, not vital, imports by China. China has more alternatives for import re-sourcing than New Zealand has for export diversion. So Beijing’s banning of imports from NZ would have little effect on China but would be a major blow to the NZ economy.

Furthermore, New Zealand, as the smallest of the Five Eyes (the Western intelligence alliance including the US, the UK, Canada, and Australia), is the most vulnerable to East-West political rivalries. If China wished to send a message of disapproval to the larger English-speaking democracies, it would logically start by sanctioning New Zealand, which, it is argued, is already implicated by association with US and Australia’s growing antipathy towards China.

Can the NZ government guard against China’s sanctions? It is already attempting to do so. Political leaders from the Prime Minister on down, and their officials, are publicly downplaying the significance of China’s actions, characterising them as normal ups and downs in a complex relationship. NZ leaders avoid naming ‘China’ as a threat to the current geopolitical or economic order or to navigation in the South China Sea, rather stressing that all parties should pursue stability, the rule of law, and cooperation for mutual advantage. They have also increased the frequency of contacts with China’s diplomats and officials, reaffirmed common interests, and reassured their China contacts that New Zealand’s policies are independently decided, not copies of US or Australian policies.

Given China’s commitment to achieving global technological leadership by 2025, perhaps the most serious offence by NZ is the potential exclusion of the technology giant Huawei from the 5G upgrade. However, the NZ Government has not yet banned Huawei, only received a warning by the GCSB about a potential security threat. If the United Kingdom accepts Huawei participation in its 5G upgrade, and if Huawei provides additional security assurances, it is possible that the NZ Cabinet will forego a ban.

Consequently, I support the NZ Government’s pursuit of an independent foreign policy and its refusal to be forced to choose between its larger partners, particularly between China, the United States, and its Five Eyes and Asian partners, all of whom are valued. This approach will not eliminate disagreements with China but it will keep pessimistic headlines in perspective and facilitate dispute management. Like a nimble ship, New Zealand can navigate between the rocks and whirlpools of geopolitics.


Stephen Hoadley is an Associate Professor of Politics and International Relations at the University of Auckland. He is an expert in international relations and diplomacy. 

See Also:

The Big Chill: What happened to Canada-China relations?

Why is China the way it is politically? ▶

What are the implications of the US-China trade war? 🔊