New Zealand

New Zealand's relationship with China is at a tipping point

More needs to be done to limit Beijing’s political interference and any short-term damage will be worth it in the long run

This week New Zealand announced it was suspending its extradition treaty with Hong Kong as a result of Hong Kong’s new national security law. At the same time, NZ changed its policy on military and dual-use goods and technology exports to Hong Kong, subjecting the city to the same as the People’s Republic of China (PRC). The New Zealand government also issued a travel warning to New Zealanders on the risks of travelling to Hong Kong.

In a statement, Wellington said it “can no longer trust that Hong Kong’s criminal justice system is sufficiently independent from China.” No explanation was given for the suspension of sensitive technology exports.

With these three actions, NZ has clearly reached a tipping point in facing up to the risks and challenges of dealing with China in the Xi era. But will the government make more fundamental changes to protect New Zealand’s interests?

China’s ambassador to New Zealand, Wu Xi, accused Wellington of “gross interference in China’s internal affairs” but the coalition government’s reaction was calm and measured. Unusually, in a show of unity, all three leaders of the Labour-NZ First-Greens coalition – Jacinda Ardern, Winston Peters and James Shaw – commented.

The main opposition party’s spokesperson on foreign affairs, Simon Bridges, also made comments supportive of the government’s position, as did the leader of ACT, David Seymour.

It is rare to see such unity in New Zealand politics and the parties appeared on the brink of forging a cross-party consensus on China.

New Zealand is now where Australia was three years ago, when it reached bipartisan consensus on China, after a devastating assessment of the extent of the Chinese Communist party’s (CCP) political interference activities.

Like Australia, New Zealand has had a bad case of CCP political interference. It has affected political parties, universities, central and local governments, and had a serious impact on the freedom of speech and association of the New Zealand Chinese population.

My report out this month – entitled Holding a Pen in One Hand, Gripping a Gun in the Other – found successive New Zealand governments had turned a blind eye to the People’s Liberation Army’s efforts to access New Zealand’s military technology and knowhow, which appear to be in breach of New Zealand’s laws, international obligations – and national interest. China is the main source of state-sponsored cyber attacks on New Zealand.

Since coming to power in October 2017, the Ardern government has steadily adjusted New Zealand’s China policies, on a case-by-case basis, with the spy agency the Government Communications Security Bureau claiming its assessments were “country agnostic”. Beijing’s actions in Xinjiang and Hong Kong have sped up the process of that readjustment.

New Zealand is now pulling together with other small and medium states to provide mutual economic, political, and strategic support to mitigate the China risk. China takes 30% of New Zealand’s exports and New Zealand is dependent on China for a significant number of strategic imports.

New Zealand is close to signing a Digital Trade Agreement with the US, and free trade agreement talks with the UK are making good progress. Five Eyes partners are also discussing how they can better cooperate economically. The debate about whether to confront Xi Jinping’s China has long been framed around the risk to New Zealand’s economic security, rather than national security.

The coalition government has made a series of legislative changes to deal with CCP political interference in New Zealand, such as changing political donation rules and adding in national security considerations to overseas investment. Still more needs to be done.

Prominent New Zealand civil society leader Freeman Yu commented that the CCP-connected candidates selected by New Zealand political parties in the 2020 election “represents CCP Money, not me. Our NZ’s democracy is serious sick.”

The 230,000-strong New Zealand Chinese population is diverse, not all are from mainland China, and those who are, voted with their feet. New Zealand politicians need to show this population that they are interested in representing all of them, not just a wealthy minority connected to the CCP.

New Zealand also needs to address CCP interference activities in tertiary institutions, which is having a chilling effect on academic freedom. Fundamentally, New Zealand must engage in a thorough rethink of the NZ Inc China Strategy. Released in 2012, it is out-of-date, and unable to deal with China under Xi Jinping.

It is unlikely there will be major economic consequences for New Zealand suspending the extradition treaty with Hong Kong, or further resilience efforts. Beijing has made it very clear that the administration of Hong Kong is now being merged with China, breaking the “one country, two systems” agreement. Therefore it makes sense to suspend the treaty, as Hong Kong is no longer legally autonomous. New Zealand puts a high premium on the right to free speech and association. China cannot afford to punish governments for acting on their national laws and adopting their national values in their foreign policy.

New Zealand does not need to take three years to catch up with Australia, and we can learn from their missteps. New Zealand must forge a relationship with China that has good boundaries, and protects our national interests. Any short-term damage will be worth it for these long-term benefits.

• Professor Anne-Marie Brady is a specialist of Chinese domestic and foreign policy at the University of Canterbury, Christchurch, New Zealand.