New Zealand-China relationship: What's at stake for trade, tourism, students?

2019-02-19 07:34:07

New Zealand is locked in a disagreement with China, but our relationship isn't on the rocks just yet, experts say.

A barrage of headlines have suggested souring relations: The much-vaunted "Year of Chinese Tourism" has been postponed indefinitely; Auckland's Chinese consulate is warning tourists about robberies and visa difficulties; and Chinese telecommunications company Huawei has launched an aggressive public influence campaign, after it was blocked from building Spark's 5G mobile network.

On top of that, Prime Minister Jacinda Ardern still hasn't secured a visit to Beijing 16 months after taking up office. Before her, every prime minister since Robert Muldoon visited China in their first year of the job.

Nonetheless, National's description of the relationship as "steadily deteriorating" might be missing the point.

New Zealand and China have reached a deadlock in trade negotiations but the relationship between the two countries is still constructive, especially compared to others, says China expert Anne-Marie Brady.

China won't give New Zealand the free trade agreement upgrade it has been negotiating since 2016; and New Zealand won't sign up to China's development strategy, the Belt and Road Initiative (BRI), set up to promote closer ties between countries through development led trade growth.

Hence why Ardern still hasn't been to China, the University of Canterbury professor said.

"You can't have a visit if there is no visible outcome to promote. A 'deliverable' is required."

In 2017, New Zealand and China signed a non-binding Memorandum of Arrangement (MoA) on BRI - an agreement to talk - that has since expired.

New Zealand and Australia are now the only countries in the Pacific Islands Forum that have not signed a Memorandum of Understanding (MoU) on BRI.


China's foreign policy has been increasingly assertive under Xi Jinping, doubling down on issues such as the South China Sea, foreign interference and human rights abuses.

Now is a good time to have a disagreement with China as it fights on multiple fronts, including diplomatic rows with the US and Canada.

The Kiwi market is strategically important for Huawei, and New Zealand saying "no," to it over spying concerns has a ripple effect on the Pacific. It looks bad for China if New Zealand says Huawei's 5G isn't safe.

But talk of a "rift" is overblown, said Brady.

"New Zealand-China relations are resilient and based on mutual interest."


The New Zealand-China relationship is one of our most important. Trade and tourism figures are up.

China is our biggest trading partner, with two-way trade valued at more than $28 billion in 2018. The Chinese are also New Zealand's second largest and fastest growing tourism market, behind Australians, with more than 400,000 visitors in 2016.

China is also New Zealand's largest source of international students, with over 40,000 Chinese student enrolments in New Zealand in 2017, and is a significant source of foreign investment.

If Beijing wanted to punish New Zealand by way of sanctions, there are many levers it could pull.


New Zealand was the first developed country to sign a free trade agreement with China in 2008.

Beijing views its bond with New Zealand as a success model for dealing with the West. But as our economic ties grow stronger, so too have concerns that China interferes with the politics of its partner countries.

New Zealand's values are more aligned with those of our traditional, democratic ally, the United States; while our largest trading partner is an authoritarian regime.

Western agencies have labelled us "soft" on Chinese influence. On the other hand, the Government's rebooted defence policy last year explicitly fingered China as a threat to the global rules-based order.

The question of whether countries should eschew other nations as trading partners based on politics or morals is a contentious one.

It was brought into sharp relief in November, when the US-Saudi Arabia alliance withstood the death of Washington Post journalist Jamal Khashoggi.

New Zealand's Foreign Affairs Minister Winston Peters said last year of a free trade agreement with Russia that if a moral high ground were taken in every case, a country would quickly run out of trading partners.

But New Zealand must safeguard itself against undue influence from China, Brady says.

"New Zealand can, and should, take actions to defend its sovereignty and protect its national security, at the same time as maintaining a constructive, mutually respectful relationship with China."

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