Foreign Affairs Minister Nanaia Mahuta has delivered a significant speech on New Zealand-China relations, saying China must act in ways consistent with its role as a growing power

New Zealand must not put all its eggs in one basket when it comes to trade, Foreign Affairs Minister Nanaia Mahuta has warned in a major speech on Aotearoa-China relations.

Mahuta has also signalled the Government’s concern about so-called ‘debt-trap diplomacy’ in the Pacific, saying China’s contribution to the region’s stability should not come through financing loans.

In an address to the New Zealand China Council, Mahuta said the relationship with China was “necessary and one of our most significant”, given the Asian superpower was an influential global actor.

“This is a relationship in which all New Zealanders have an interest, and it is a relationship that the Government approaches keeping in mind all New Zealanders’ long-term interests.”

China had been New Zealand’s largest trading partner since 2017, and the recently signed FTA upgrade would modernise the existing agreement and deliver new benefits for Kiwi businesses.

However, Mahuta also sent a warning about overexposure, saying: “In thinking about long-term economic resilience, we also understand that there is value in diversity.

“Just as the council has noted, it is prudent not to put all eggs into a single basket.”

New Zealand would continue to engage with China on climate change, with the country’s undertakings to date and future actions “hugely consequential” alongside those of other large economies.

Mahuta said it was in everyone’s interests for China to act in a way consistent with its responsibilities as a growing power, with the country’s status as a permanent member of the UN Security Council placing added obligations upon it.

“China can play a role in the long-term economic recovery of the region but there is a substantial difference between financing loans and contributing to greater ODA [official development assistance] investment in particular to the Pacific.”

New Zealand intended to be a “respectful, predictable and consistent” partner in its engagement with China as it sought to pursue longstanding, deeply-held values and interests.

“There are some things on which New Zealand and China do not, cannot, and will not, agree. It is important to acknowledge this, and to stay true to ourselves, as we seek to manage our disagreements mindful that tikanga underpinning how we relate to each other must be respected.”

Both sides needed to respect the tikanga (protocols) of engagement, she said, with New Zealand “look[ing] for a similar spirit of respect and engagement to be shown to all international friends and partners”.

“As a significant power, the way that China treats its partners is important for us.”

New Zealand had raised issues privately with China on a number of occasions, while it approached human rights issues in a “consistent, country-agnostic manner”.

“We will not ignore the severity and impact of any particular country’s actions if they conflict with our longstanding and formal commitment to universal human rights,” Mahuta said, explaining the Government’s decision to speak out on the treatment of Uyghur Muslims in Xinjiang and a crackdown on Hong Kong’s democracy movement.

“At times we will do this in association with others that share our views and sometimes we will act alone. In each case we make our decisions independently, informed by our values and our own assessment of New Zealand’s interests.”

Speaking about the Government’s Pacific Reset policy, Mahuta said the level of economic vulnerability and indebtedness within the region was a major risk for its future.

Multilateral initiatives in the Pacific would have a stronger and more enduring impact than bilateral arrangements, which could lead to “variable outcomes”.

“China can play a role in the long-term economic recovery of the region but there is a substantial difference between financing loans and contributing to greater ODA [official development assistance] investment in particular to the Pacific.

“We must move towards a more sustainable Pacific that respects Pacific sovereignties, and builds on Pacific peoples’ own capabilities, towards long-term resilience.”

NZ pushes back on Five Eyes expansion

Speaking to media after her remarks, Mahuta said New Zealand’s post-Covid recovery presented an opportunity to strengthen the country’s economic resilience.

“Resting our trade relationship just on one country long-term is probably not the way we should be thinking about things, but it’s an ‘and/and’: it is not about China or the rest, it’s about China and others.”

In the Pacific, the pandemic had only worsened pre-existing levels of economic vulnerability, meaning a different conversation had to take place with those looking to invest in the region.

Mahuta also revealed that New Zealand had pushed back against efforts from Five Eyes partners to widen the scope of the intelligence-sharing alliance, saying the Government was “uncomfortable” with any expansion of its remit.

“New Zealand has been very clear, certainly in this term and since we’ve held the portfolio, not to invoke the Five Eyes as the first point of contact on messaging out on a range of issues that really exist outside of the remit of the Five Eyes…

“What we would prefer again…is looking for other supports in the region. That may or may not be those countries, but the point of it is the Five Eyes relationship has a specific purpose, and we would much rather prefer other partners on the issues that we want to message out and advocate in favour of as we express our concern but also call for action.”

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

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