{"id":44654,"date":"2018-12-20T10:30:37","date_gmt":"2018-12-19T23:30:37","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=44654"},"modified":"2018-12-20T09:41:14","modified_gmt":"2018-12-19T22:41:14","slug":"new-zealands-china-reset","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/new-zealands-china-reset\/","title":{"rendered":"New Zealand\u2019s China reset?"},"content":{"rendered":"
<\/figure>\n

In February, New Zealand Foreign Minister Winston Peters announced a revised approach to the Pacific islands. Central to the coalition government\u2019s \u2018Pacific reset\u2019 was a pledge to increase New Zealand\u2019s diplomatic and development footprint in the region. This included a NZ$714 million boost to aid and development spending, as well NZ$180 million for a new strategic international development fund.<\/p>\n

Since then, there has been a raft of developments. The government\u2019s May budget provided New Zealand\u2019s foreign service with a significant boost<\/a> in funding. The government\u2019s strategic defence policy statement<\/a>, released in July, was noteworthy for its unusually frank language about China\u2019s actions. And last month, Peters announced the creation of a $10 million Pacific fund that will operate beyond<\/a> the parameters of formal aid arrangements and an increase in the number of staff posted offshore in the Pacific.<\/p>\n

New Zealand\u2019s relationship<\/a> with China, and the rewards it has brought, are well known. The country is now NZ\u2019s largest trading partner in goods, and second largest when services are included. The dairy sector, especially, has profited immensely; it currently supplies over 80% of China\u2019s butter imports and over 50% of its cheese imports.<\/p>\n

The government\u2019s hike in aid funding, change of tone and upgrade of maritime patrol capabilities are soft-power responses to a mounting dilemma: how to counter China\u2019s escalation of influence in the South Pacific.<\/p>\n

The Belt and Road Initiative<\/a>, which was first unveiled in 2013, is at the heart of Beijing\u2019s growing presence. In its simplest form, the initiative is President Xi Jinping\u2019s grand plan to boost China\u2019s trade links across Eurasia. China has deployed hundreds of billions of dollars\u2014often through loans or financial guarantees\u2014to other countries for big infrastructure projects. The ambition of the BRI is enormous: it targets, by one estimate<\/a>, about two-thirds of the world\u2019s population, a third of global GDP and a quarter of all trade.<\/p>\n

New Zealand signed a non-binding memorandum of arrangement with China on the BRI in 2017\u2014one of the first Western countries to do so. However, looking at what was signed, it\u2019s hard to find<\/a> anything out of the ordinary. Collaboration in mutually beneficial areas such as education and tourism has been going on for many years.<\/p>\n

Stephen Jacobi, the executive director of the New Zealand China Council, is arguably most vocal advocate of BRI involvement in New Zealand. According to Jacobi, trade flows, not infrastructure, are \u2018the real play<\/a>\u2019 in the region. Yet some believe that Jacobi is too optimistic<\/a> and he very rarely offers a critical word on the strategic goals the BRI is seeking to achieve.<\/p>\n

Sri Lanka\u2019s BRI experience shows how things can go wrong. In December 2017, having failed to pay accumulated debts to China, the country handed over its strategically located Hambantota Port in a debt-for-equity swap<\/a>. Given that the economic rationale for the port is weak<\/a>, there\u2019s been a great deal of speculation that it could become a Chinese naval facility.<\/p>\n

China\u2019s aid investments in the Pacific, which lag<\/a> well behind Australia\u2019s, stand out because they often involve high-profile projects. Through the BRI, for example, China has pledged an eye-watering US$3.5 billion<\/a>\u00a0to build a new road network in Papua New Guinea. On the other hand, Australia and New Zealand have historically invested in areas such as education and training for better governance. Similar to what happened in Sri Lanka, Canberra and Wellington fear that countries in the region will be snared in \u2018debt traps\u2019 which will be exploited by China.<\/p>\n

Closer to home, Peters\u2019 cash injection hasn\u2019t deterred Beijing. In fact, China has responded by simply upping its own involvement. In recent months, Niue and the Cook Islands\u2014whose citizens carry New Zealand passports\u2014have made commitments<\/a> to join the BRI. While both have a degree of autonomy, Wellington has tended to lead when it comes to foreign policy.<\/p>\n

At the APEC conference in PNG, New Zealand\u2019s \u2018soft power\u2019 push was on show<\/a>. Prime Minister Jacinda Ardern announced<\/a> that New Zealand would join the US, Japan and Australia to expand access to electricity in PNG. There was also an announcement<\/a>, by Peters and his Australian counterpart Marise Payne, of a joint cybersecurity project with Pacific island countries.<\/p>\n

If Trade Minister David Parker\u2019s comments at APEC are anything to go by, New Zealand\u2019s strategy is to act as an \u2018honest broker\u2019 between China and the US. But the geopolitical tensions<\/a> that bubbled up at the summit\u2014mainly over who would be the better investment partner for the region\u2014underline how that spot might be difficult to maintain. Xi\u2019s meeting with eight Pacific leaders and Tonga\u2019s signing up<\/a> to the BRI indicate that China is upping the ante.<\/p>\n

On her return from PNG, Ardern reiterated Parker\u2019s comments, saying<\/a> that New Zealand\u2019s approach was based on principles and not aligned with any one country.<\/p>\n

Last month, the government turned down<\/a> Spark Telecom\u2019s proposed use of Huawei equipment in New Zealand\u2019s 5G network on the advice of its main intelligence agency. Andrew Little<\/a>, the minister responsible for the Government Communications Security Bureau, is yet to go into any detail on why the company\u2019s involvement would create a national security risk.<\/p>\n

With an upgrade<\/a> of the NZ\u2013China free trade agreement on the cards, this was a tough call for the government\u2014though the language in China\u2019s 2017 national intelligence law probably made the decision easier. Article 7 of the law makes it clear<\/a> that Chinese organisations are expected to collaborate in national intelligence work. More generally, the government\u2019s caution is understandable, especially given the scale<\/a> of cyber theft undertaken by groups linked to the Chinese state.<\/p>\n

In the past year, New Zealand\u2019s foreign policy has become more cautious towards China. To counterbalance the Chinese thrust into the South Pacific, Wellington appears to be shifting back to its traditional ANZUS partners. The Huawei decision looks to be an indicator of the government\u2019s willingness to speak out against China, even if it is the line that Beijing doesn\u2019t want to hear. It will be interesting to watch how this shift in policy plays out, especially given the fluctuations that could come with the unusual nature of the coalition government in Wellington.<\/p>\n","protected":false},"excerpt":{"rendered":"

In February, New Zealand Foreign Minister Winston Peters announced a revised approach to the Pacific islands. 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