China challenges must be managed if opportunities are to be sustained

Expert opinion from Victoria University Wellington - Te Herenga Waka

Opinion: New Zealand’s relationship with China is once again in the news, and for good reason.

We’ve seen the New Zealand Government attribute cyber activity targeting the New Zealand Parliament to China, controversy about New Zealand’s consideration of joining pillar two of Aukus – a proposed security technology sharing agreement that China opposes – a stoush with a retired Australian minister and Aukus critic, and a slowdown in 2023 exports to China.

However, this year the remaining tariffs and quotas on dairy products entering the Chinese market have been removed and Foreign Minister Wang Yi visited for the first time in seven years. Wang enjoyed a craft beer with Foreign Minister Winston Peters after talks that both sides signalled as fruitful.

What then should we make of the handling of one of New Zealand’s most important and complex relationships? Those trying to read the tea leaves will find some clues in two recent speeches from Peters.

The first on May 1 was delivered to the New Zealand Institute of International Affairs and set out the broader contours of the international environment New Zealand was operating in.

It painted a picture of a more fractured world characterised by three big shifts: from rules to power (a more contested international order); from economics to security (the end of the ‘golden age’ of trade liberalisation and globalisation, and an increase in military competition); and from efficiency to resilience (industrial policy, supply chain resilience, and social and sustainability concerns).

Details of these trends are outlined in the Ministry of Foreign Affairs and Trade’s Strategic Foreign Policy Assessment in 2023. It makes a powerful case that New Zealand is now navigating a tough international environment, especially in its relations with China.

The second speech was delivered to the New Zealand China Council on May 3 and set out the principles underlying how the Government approaches China.

Peters makes clear that China matters to New Zealand and that the Government seeks to engage openly and honestly with Beijing. It puts forward three key principles for how to manage relations.

The first is to cooperate with China where it is in the national interest.

This relates to the significant goods and services trade between the two countries, cooperation on science (food, environment, and health and biomedical) and people-to-people connections. 

It is no surprise a Government wanting to double the value of exports in the next 10 years would look to sustain the economic relationship with China, New Zealand’s largest trade partner.

But the tone of the speech is far from the Helen Clark and John Key governments’ frantic efforts to supercharge the economic relationship. It sounds instead very much like a continuation of the previous Labour government’s ‘China plus’ diversification strategy.

The second principle is to act to defend, promote, and preserve our interests. The focus here is on managing differences in the relationship. Peters identified significant areas of disagreement, all of which have been well signalled in recent years.

These include concern about adherence to international law in the South China Sea, security concerns in the Pacific and across the Taiwan Strait, human rights concerns and increasing worries about China’s position on Russia’s invasion of Ukraine.

There is an expectation that openly airing differences is a healthy part of diplomacy. As Peters notes, “in a mature relationship like ours it is possible to discuss differences openly, respectfully, and predictably”.

There is little evidence that this is a sentiment shared by Beijing. This suggests these messages are as much for the New Zealand public to help them understand the challenges, as they are an effort to shift Beijing.

It is also, according to Peters, in New Zealand’s interest for China to assume more “leadership and diplomacy” to “help to ease global tensions”.

This is an idea reminiscent of former US deputy secretary of state Robert Zoellick’s call in 2005 for China to be a “responsible stakeholder”. It encourages China to do more, but also critiques its current international behaviour.

This leads to the third principle, that New Zealand “will continue to align and work with partners where this helps advance our common interests, all the while being steadfast in our independent assessment of our national interests”.

It has become a cliché to state that managing relations with China is complex but that doesn’t make it any less true. All New Zealand’s closest partners face similar challenges. It therefore makes sense to share ideas and information, and where appropriate work together.

This is especially important as China increases its military capabilities and the balance of power in the region shifts, and as China promotes its own brand of reform of global governance.

Both speeches point to a challenging environment for New Zealand-China relations.

We’d all prefer to focus on the opportunities, but challenges must be managed if opportunities are to be sustained. New Zealand has as much responsibility to help shape the evolution of a stable, prosperous, and sustainable regional order as any country.

That requires keeping an eye not only on the daily churn of China-related drama but also an eye to the principles that underpin how that long-term goal is approached.