Media outlets across the ditch have been buzzing in recent weeks with fresh concerns over a potential downturn in New Zealand-China relations. Talk of the supposed souring has been especially prominent in Wellington, where worries have centred on the implications for New Zealand’s all-important economic relationship with the People’s Republic of China (PRC).

Last month, an Air New Zealand flight bound for Shanghai was denied permission to land after airline staff reportedly failed to remove a reference to Taiwan from the flights manifest. Then, PRC officials issued an updated travel warning for Chinese nationals visiting New Zealand, capping a three-months-running decline in tourism from China.

 

 

Most recently, state dialogues between New Zealand and China were put on hold, allegedly due to “scheduling conflicts”, though many have publicly speculated that the cancellations were retribution for the government’s perceived bandwagoning with the United States in the aftermath of the arrest of Huawei executive Meng Wanzhou.

Even before Meng’s arrest, tensions were simmering beneath the surface.

Most notably, University of Canterbury Professor Anne-Marie Brady called national attention to the question of covert Chinese influence in New Zealand politics, including, but not limited to, charges that sitting National Party List MP Jian Yang worked as a double-agent on China’s behalf. Such charges gained currency among New Zealand’s traditional allies, with some calling it the “soft underbelly” of the “Five Eyes” security community. 

Just what are we to make of these events? Are they a cause to panic or just routine? More to the point, how do we benchmark changes in the tone of bilateral ties, and to what do we attribute changes when they happen?

New Zealand and China have built a mutually beneficial relationship with political contacts and trade steadily increasing since official relations began in 1972. This relationship is not solely based on reciprocal gains but on the frank manner with which leaders have to voice their differences.

Difficult as it may be to construe recent events as positive, the truth is that New Zealand still has a good relationship with the PRC, in both relative and absolute terms. There are no signals that the 2008 free trade agreement, or its negotiated upgrade, are in jeopardy. Nor is the chill New Zealand currently feels in the same league as those felt by Canada, where relations with China have plummeted to new lows since Meng’s arrest (and those of multiple Canadians in China), and talks of free trade with China are regularly scuppered by ideological objections to doing business with an authoritarian human rights violator.

In fact, when viewed in historical context, any slights China perceives from New Zealand (and vice versa) appear laughably minor.

New Zealand and China have never had a perfect relationship. The tendency to suppress information and dissidence naturally oppose the tenets of liberal democracy and Cold War ideologies have seen the two countries in competition. Yet despite different political systems and values, the two have built a mutually beneficial relationship with political contacts and trade steadily increasing since official relations began in 1972. This relationship is not solely based on reciprocal gains but on the frank manner with which leaders have to voice their differences.

The PRC was founded in 1949 yet it took New Zealand 23 years to extend diplomatic recognition. New Zealand’s leaders initially opposed the violence of the Communist Revolution and quickly saw China as an enemy in the Korean War. A military alliance with the US further strong-armed New Zealand into pursuing a Communist containment policy while leaders were reluctant to break relations with Taiwan, a precursor to any relationship with the PRC.

As late as 1968 then prime minister Keith Holyoake saw Beijing’s “militant communism” as the biggest threat to the world. Under these conditions, it is unsurprising that New Zealand voted 11 consecutive times against the Albanian sponsored resolution to instate the PRC and expel the exiled Republic of China from the United Nations.

From the 1970s, New Zealand began reevaluating traditional relationships precipitating a search for more markets and political connections. Britain, whom New Zealand almost exclusively relied on as an export market, joined the European Economy Community limiting future access for New Zealand products. Simultaneously, the threat posed by military and ideological conflict substantially lessened, undermining the NZ-US relationship.

The US had withdrawn from Vietnam and entered into a détente with the USSR, while the international community had accepted the PRC in the UN, appeasing its one-China policy. New Zealand followed, establishing a relationship with the PRC in 1972. Lacking an ideological base, the NZ-US military alliance dismantled the next decade from US opposition to New Zealand’s anti-nuclear policy.

France responded to this same policy by bombing the Greenpeace protest vessel Rainbow Warrior in Auckland Harbour in 1985, resulting in the death of one civilian. Australia, the US, and Britain all claimed indifference. New Zealand could not rely on its traditional partners as it once had. The Western alliance meant nothing if New Zealand was not a status quo member.

The liberal reforms of the Fourth Labour Government increased the necessity of a wider trade portfolio. Vastly reduced tariffs and subsidies meant NZ was pushed further into the world economy. These reforms were extended by Jim Bolger’s National Government in the 1990s, which also made a conscious shift to prioritise trade in Asia.

New Zealand’s efforts were matched by a similar push from China. Deng Xiaoping’s 1992 Southern Tour further emphasised China’s opening up – finding in NZ a low cost, trade-eager partner to trial new economic policies. From 1997 the two began a trend of “firsts” with NZ supporting China’s international integration and China reciprocating with favourable economic agreements.

New Zealand became the first nation to recognise China’s ascension to the WTO, preceding trade talks by then prime minister Jenny Shipley with Chinese leader Jiang Zemin at Auckland Asia-Pacific Economic Cooperation 1999. New Zealand in 2004 became the first country to recognise China as a market economy, the same year formal free trade agreement (FTA) negotiations began. With the FTA signed in 2008, New Zealand became the first developed nation to enter into FTA negotiations with China and the first to conclude such an agreement.

In the 10 years since the FTA signing, two-way trade with China has increased threefold, precipitating the need for an FTA upgrade currently being negotiated. Again, the first type of deal China has undergone with any country.

Yet positive engagement has always been overshadowed by conflicting values and systems.

From recognition, New Zealand’s leaders were voicing concerns over human rights, nuclear weapons testing, and Chinese support for communist insurgencies. Anti-nuclear sentiment was the crux of Robert Muldoon’s conversation with Mao Zedong in 1976, yet they bonded over joint antipathy to the USSR. New Zealand was not absent from international condemnation after the Tiananmen crackdown, joining in imposing economic and political sanctions. However, New Zealand was the first western nation to reestablish high-level ministerial visits.

Similarly, Helen Clark’s Labour Government voiced extreme protest against human rights in Tibet. Then foreign minister Phil Goff accepted an invitation to the region, which likely saw his concerns about human rights violations confirmed rather than appeased. Labour continued pursuing the FTA regardless.

In all these situations New Zealand and China have clashed on major issues and New Zealand leaders have actively protested. China has been receptive to vocal opposition and the two countries continue to work together. Notable differences and voicing concerns are a common trend in the NZ-China relationship yet they are of secondary importance to closer political and economic ties. Recent events are not really positive developments, but neither are they catastrophes. No talk of up-ending free trade.

In fact, recent stuff is just a continuation of a long trend or recognising differences and cooperating where we can. And could still be much, much worse.


The Lowy Institute is part of the  Pacific Research Program