By Jonas Fleming

Over the last three years, New Zealand-China relations have encountered new challenges. New Zealand’s decision to block Spark’s 5G network proposal over the involvement of Huawei, their ban on travellers from China in the early weeks of the COVID-19 pandemic, and their support for Taiwan’s observer status at the World Health Organisation (WHO) have all helped to create a new rift between themselves and the People’s Republic of China (PRC). Furthermore, the ‘Pacific reset’ – a significant change in New Zealand’s foreign policy approach in 2018 – has demonstrated that Wellington no longer sees China’s growing presence in the South Pacific as entirely benign. This article seeks to explore the relationship between Wellington and Beijing from a historical perspective, before examining the emerging geopolitical challenges affecting the relationship today.

Since it began in 1972, the official relationship between Wellington and Beijing has developed greatly. Prior to this when, in the aftermath of the Chinese Civil War and the founding of the PRC, Beijing was closely aligned to the Soviet Union, most Western countries, including New Zealand, chose to continue to recognise the nationalists, now relegated to the island of Formosa (which later became Taiwan), as the legitimate government in China.[1] By the 1970s, however, the Sino-Soviet relationship had deteriorated and both the PRC and the USA saw a strategic advantage in pursuing a policy of détente.[2] Beijing was now interested in pursuing diplomatic and economic relations with Western countries.[3]

Having come to rely significantly on international trade for its wealth, New Zealand was also interested in fostering a relationship with China. The main destination for New Zealand exporters before the 1970s had been the United Kingdom. However, after the UK entered the European Economic Community (EEC) in 1973, New Zealand was compelled to seek new export opportunities in other markets.[4] With the opening up of diplomatic channels, China became an obvious choice. New Zealand officially recognised the PRC in 1972, and supported its bid for UN representation. Soon, embassies were established and diplomats deployed. Throughout the 1970s and 1980s, New Zealand’s and China’s diplomatic and economic relationship deepened gradually.

In the waning years of the Cold War, Deng Xiaoping led a wave of economic reforms in China which are broadly seen to have liberalised the economy and opened it up to international markets. By the early 1990s, China was seeking to integrate itself into existing global and regional trade structures.[5] They met with much pushback, especially from the United States. However, New Zealand won a certain degree of favour in Beijing when in the early 2000s it became one of the earliest Western countries to advocate on behalf of China’s bid for membership of the World Trade Organisation (WTO) and the first to officially recognise China as a “market economy”.[6]

Later, when China expressed interest in pursuing its own bilateral trade deals, New Zealand found itself at the top of their agenda. Indeed, New Zealand was the first Western country that China began negotiating a trade deal with. The China-New Zealand Free Trade Agreement (FTA) was signed in 2008. University of Auckland political scientists Stephen Hoadley and Jian Yang argue that in selecting New Zealand for their first FTA negotiations, China was recognising and building on the fact that New Zealand and China already had a good trading relationship, while demonstrating to larger economies (like the United States or the European Union) the benefits of supporting China’s market economy status.[7] Over the last twelve years, Beijing has become New Zealand’s largest trading partner.[8]

In the years that have followed the signing of the FTA, the economic and trading connections between New Zealand and China have grown apace, alongside their cultural and educational ties. Forty years after the beginning of their official diplomatic relationship, in 2012, Michael Powles described the relationship with Beijing as one of New Zealand’s greatest foreign policy successes.[9] China also values the relationship, often lauding New Zealand with regard to the “Four Firsts”.[10] [11] Thus, Powles sees New Zealand as having an “excellent foundation” on which to continue to build its relationship with the People’s Republic of China (PRC).[12] However, he also warns New Zealand policy makers and analysts to be realistic about their true views towards the economic giant. Unlike during the negotiations for the China-New Zealand FTA, Beijing is now fully integrated into the international economic system. Its diplomatic and military muscles are also better developed. As this growth continues, the importance of a small partner like New Zealand will inevitably decline.[13]

Wellington’s already waning relevance to China may soon be further compromised by another factor. As US-China relations become increasingly strained under the Trump presidency, New Zealand’s deepening security and defence relationship with Washington may prove to be controversial. New Zealand has historically had two very different relationships with these countries. With the US, New Zealand shares “language, law and custom, common values and a long history of joint involvement in the international community”.[14] The relationship with China is much younger, and primarily economic in character, but one which successfully “reaches across a large cultural divide”.[15]

In the context of increasing tensions between two great powers, John McKinnon raises concerns around the implications of this for New Zealand. What if, for instance, Wellington were forced into a situation where it must ‘choose a side’, so to speak?[16] In 2013, when McKinnon was writing, this may have seemed an unlikely scenario to many. However, in the Trump era and with some commentators predicting an impending economic divorce between the US and China,[17] this is undoubtedly a very real fear. One can even imagine a less dramatic scenario, in which a choice New Zealand makes to support one partner comes at the expense of the other.[18] What would be the implications of such a development? Powles noted that China would see any moves by Wellington to comply with a US attempt to “directly or incrementally” contain China in highly negatively terms.[19]

In 2012, Robert Ayson saw this as the greatest foreign policy challenge for New Zealand (and Australia).[20] He notes that since the contemporaneous elections of President Barack Obama and Prime Minister John Key in 2008, the security and strategic relationship between the US and New Zealand has largely been repaired (having deteriorated in the 1980s over the nuclear issue).[21] Over the last decade, military cooperation between New Zealand and the US has accelerated and the two countries are now informal allies.[22] With US-China competition increasing across the world, the New Zealand government may begin to see tensions emerge in balancing its economic relationship with China and its defence relationship with the US. The ideal scenario for Wellington is to minimize any burgeoning conflicts (economic, diplomatic, or military) between Washington and Beijing. This way they will be able to maximise the benefits they receive from both relationships. However, as Chinese economic strength begins to translate into political and strategic influence, such a strategy looks increasingly unlikely to succeed.[23]

The Labour-New Zealand First coalition government, elected in 2017, appears to be making moves that acknowledge this reality. The launch of the ‘Pacific reset’ in 2018 was aimed at reasserting New Zealand’s influence among Pacific Island countries, in the context of China’s growing presence in the region.[24] Foreign Affairs Minister Winston Peters has now made multiple trips to Washington, where he has given speeches seeking to enlist the US as a partner in the South Pacific and warning of the entrance of “new actors” and rising “strategic competition” in the region.[25] Recent moves restricting Chinese tech-giant Huawei’s participation in New Zealand’s 5G rollout further indicate the government’s changing attitude regarding China. If this continues, it will undoubtedly come with implications for the China-New Zealand relationship.

With the entry of new economic and development partners in the South Pacific, the ‘Pacific reset’ is an attempt to mitigate, and ideally reverse, Wellington’s relative loss of regional influence.[26] Since its launch, the reset has manifested most starkly in significant increases to aid across the region.[27] Together with Australia, New Zealand has for some decades been one of the primary international partners for many Pacific Island countries.[28] While New Zealand has tended to focus sub-regionally on Polynesia (just as Australia has focused on Melanesia and the United States on Micronesia),[29] Wellington has nevertheless been a leading partner for countries across the entire South Pacific. In fact, New Zealand sees itself not just as a regional partner but as leader within the region. When he announced the Pacific reset, the current Minister of Foreign Affairs Winston Peters said New Zealand takes pride in seeing itself as “full members of the Pacific family”.[30]

Growing anxieties over new actors in the region – especially China – have driven the push for a rejuvenation of New Zealand’s relationship its Pacific neighbours. Over the last fifteen years, Beijing has dramatically increased its official development assistance to the region. Between 2006 and 2016, China committed US$1,781 million in aid across the South Pacific.[31] Simultaneously, Chinese state and private companies significantly boosted their investment in the region as part of the “Go Out” development strategy of the 2000s.[32] This came at a time when, on the one hand, New Zealand and Australia were increasingly pivoting northward – in anticipation of the ‘Asian century’ – and, on the other, when major extra-regional actors (like the US, the UK, and France) had largely disengaged following the end of the Cold War.[33] Thus, with traditional partners apparently losing interest in the region, many aid-dependent Pacific Island governments became highly receptive to the generous overtures coming from Beijing.[34]

What is the interest of a rising superpower like China in a region as small as the South Pacific, and one with seemingly marginal geostrategic importance? Firstly, Beijing is interested in courting general influence around the world – especially in developing countries.[35] China anticipates its core national interests (especially territorial integrity) being threatened in international institutions, like the United Nations (UN), and by rival powers like the US. Therefore, its leaders are eager to gain diplomatic support for their positions concerning Taiwan and the South China Seas. The votes of small developing nations, such as Pacific Island countries, in international bodies are relatively easier to “buy”. Even a small investment from a country the size of China can make a huge impact in Fiji, Samoa, or Vanuatu.[36] However, John Henderson and Benjamin Reilly suggest that China also seeks “to ultimately replace the United States as the pre-eminent power in the Pacific Ocean,”[37] Dominance in the Pacific necessarily requires dominance in the South Pacific. In this context, that China is developing closer ties (including military ties, in some cases) with Pacific Island countries necessarily comes with security implications for New Zealand.

In March 2018, shortly after the formal announcement of the Pacific reset, the Centre for Strategic and International Studies (CSIS) held a conference in Auckland on the topic of international relations in the Pacific, with New Zealand and American scholars. The role of China was a significant talking point. One of the core challenges they observed was the entrance of “revisionist powers” into the region “seeking to reshape regional security dynamics and carve out spheres of influence, jeopardizing the liberal rules-based order that has supported US and New Zealand security and prosperity for more than half a century.”[38] Evidently, in this context, the label “revisionist power” is a euphemism for China. Indeed, speakers at the conference were explicit about their concerns regarding the spread of Chinese influence across the Pacific.[39] They recommended a coordinated approach between New Zealand, the United States and other allied countries to push back against this influence. With the launch of the Pacific reset, and the Australian equivalent – the “Pacific Step-up” – it appears that Wellington and other traditional regional actors are taking seriously the challenge posed by China’s entrance into the South Pacific. This has to be managed carefully, however, and could prove to be a sticking point in the New Zealand-China relationship going forward.

Footnotes: 

[1] Kelly, ANZUS and the Early Cold War, 53.

[2] McCraw, “From Kirk to Muldoon,” 641.

[3] Kelly, ANZUS and the Early Cold War, 54.

[4] McCraw, “From Kirk to Muldoon,” 640.

[5] Hoadley and Yang, “China’s Cross-Regional FTA Initiatives,” 327.

[6] Hoadley and Yang, 337.

[7] Hoadley and Yang, 337.

[8] Workman, “New Zealand’s Top Trading Partners.”

[9] Powles, “China and New Zealand at forty”, 2.

[10] Four Firsts: New Zealand’s early support for China’s WTO membership bid, their recognition of China as a market economy, and their entry into and conclusion of bilateral trade talks

[11] Powles, 2.

[12] Powles, 2.

[13] Powles, 2.

[14] McKinnon, “New Zealand between America and China”, 10.

[15] McKinnon, 10.

[16] McKinnon, 11.

[17] Lynch and Paquette, “New U.S.-China tariffs raise fears of an economic Cold War.”

[18] McKinnon, “New Zealand between America and China”, 11.

[19] Powles, “China and New Zealand at forty”, 3.

[20] Ayson, “Choosing Ahead of Time?”, 339.

[21] Ayson, 344.

[22] Ayson, 347.

[23] Ayson, 356.

[24] Peters, “Pacific Partnerships.”

[25] Peters, “Pacific Partnerships.”

[26] Peters, “Pacific Partnerships.”

[27]

[28] Zhang, “China’s Diplomacy in the Pacific,” 49.

[29] Zhang, 49.

[30] Peters, “Shifting the dial.”

[31] Lowy Institute, “Chinese Aid in the Pacific.”

[32] O’Neill, “Buying Influence,” 74.

[33] Henderson and Reilly, “Dragon in Paradise,” 102.

[34] Lee, The Use of Aid to Counter China’s “Djibouti Strategy” in the South Pacific, 8.

[35] Henderson and Reilly, “Dragon in Paradise,” 95.

[36] Lee, The Use of Aid to Counter China’s “Djibouti Strategy” in the South Pacific, 8-9.

[37] Henderson and Reilly, “Dragon in Paradise,” 95.

[38] CSIS, United States and New Zealand: Pacific Partners, 1

[39] CSIS, 7.


Jonas Fleming is a Post-Graduate Diploma student in Politics and International Relations at the University of Auckland. 

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