BaCK IN 2017 NZ'S Five Eye partners had difficulty with NZ's tilt towards China

For a bit of historical perspective

New Zealand says it will find a 'win-win' situation in China's Belt and Road strategy

• New Zealand's leaders made the comments at a China-focused business summit
• Wellington has fostered close economic ties with Beijing, including a free-trade agreement
• But some have voiced concern about New Zealand's increased reliance on Chinese trade
• The trade and investment policy — championed by Chinese President Xi Jinping — has become mired in controversy, with some partner nations bemoaning the high cost of projects.

SMH,

7 May, 2019

New Zealand is willing to work with China on its Belt and Road initiative (BRI) and can offer its expertise in areas such as regulation and the environment, its Trade Minister says.

But China's recent efforts to put a greener face on its infrastructure initiative could smoothen ties with some countries.

China's new 'Silk Road'

"It seems more likely that we can find a win-win situation with China, whether it's greening the Belt and Road, or helping address some of the issues… around transparency, or whether it's using our regulatory systems, which are amongst the best in the world," New Zealand Trade Minister David Parker said at an annual China-focused business summit in Auckland.

Mr Parker had travelled to Beijing for the BRI summit in April at which New Zealand had joined Russia and four developing nations to coordinate accounting standards for countries participating in the program.

Amid Western scrutiny and a US backlash towards the BRI, New Zealand's stance could be a litmus test on how other governments respond to the BRI.

"The fact that we've taken a little bit of pause as we've worked to really flesh out that arrangement has been no bad thing, because Belt and Road has really evolved," Prime Minister Jacinda Ardern told the summit, adding that the infrastructure program was changing to involve sectors such as service industries.

New Zealand has long been touted by Beijing as an exemplar of its "firsts" with Western countries, most recently becoming the first Western nation to join the Chinese-spearheaded Asia Infrastructure Investment Bank (AIIB) and helping to usher in other developed nations.

But in recent months, New Zealand's security agencies have expressed concerns about the country's vulnerability to foreign interference at the hands of Beijing.

Its Security Intelligence Service said in its 2018 annual report that the country was "a target of espionage and foreign interference activity".

Across the Tasman, the Victorian Government has been the only Australian government to sign up to the BRI, despite senior national security figures citing "strategic" consequences for Australia if it signed up formally.

New Zealand's Deputy Prime Minster Winston Peters, who served as foreign minister under the government of Helen Clarke from 2005 to 2008, told reporters in November that it would be "naive" to think that citizens were free from espionage.

He added that the Chinese diaspora did not speak up against Beijing as they feared the Government's global reach.

His comments came after allegations from the University of Canterbury's Professor Anne-Marie Brady, who reported that her home was broken into, her car was being tampered with, and she was the recipient of threats through the post and via phone after the publication of her 2017 paper into China's alleged interference in New Zealand.

But the relationship has hit a stumbling block in recent months under Ms Ardern's coalition government.

New Zealand has criticised China's lending to the Pacific, and rejected a bid to allow Chinese technology giant Huawei to take part in the country's planned 5G network.

A BRI agreement — one of the first with a Western nation and penned under the previous centre-right National government in 2017 — had languished months past its 18-month expiry date.

Australia's strategic concerns over Belt and Road

China's controversial push to dominate global trade is being resisted by senior national security figures, who warned the Government of "negative strategic consequences" if Australia signed up.

But Ms Ardern, who recently returned from her first trip to Beijing as Prime Minister, said that disagreements were normal and the relationship with China was one of New Zealand's most important.

Two-way trade between the two countries had topped $NZ30 billion ($28.3 billion), and the Government hoped it would grow further once negotiations were completed on an upgrade of their historic free trade agreement.

Mr Parker said that taking part in the BRI could improve the relationship between the two nations because it was "very important" to the Chinese administration, "which then creates a space for trade".

China's ambassador to New Zealand, Wu Xi, welcomed New Zealand's offering up its regulatory expertise to Belt and Road, but encouraged a bold idea proposed by some businesses and trade experts to develop New Zealand into a transport and trade hub between Asia and Latin America.

"[Belt and Road] needs New Zealand's ideas, New Zealand's creativity and New Zealand's energy," Ms Wu said.

Air New Zealand was among the businesses backing the proposal.

"We're a little country...we've got to step into this space," said the airline's chief executive, Christopher Luxon.

But Mr Luxon also admitted the carrier, which is 53 per cent owned by the New Zealand Government, had lost over $100 million after 13 years of operating in China due to Beijing's preferential treatment for Chinese airlines.

But, he said that Ms Wu's proposal would be one of the ways that New Zealand "can have relevance and participate in joining up to emerging parts of the world".