Setting New Zealand’s foreign policy has long meant juggling between superpowers and it isn’t getting any easier. Tensions across the Pacific are mounting and Wellington finds itself in the middle of a US-China tempest. Justin Giovannetti reports from parliament.

Despite a series of angry international headlines in recent weeks, Nanaia Mahuta is following a well-worn path set by her predecessors in the foreign minister’s office. But six months in, she faces a series of challenges that look increasingly daunting.

On one side is the country’s largest trade partner, a confident and increasingly assertive China. Mahuta has criticised Beijing’s human rights abuses, but has chosen to do it behind closed doors when possible. China has also offered her more problems, including stamping down on democracy in Hong Kong, digital espionage, Covid-19 vaccine diplomacy and an arms buildup in the South China Sea.

In the opposite corner are the old allies, Australia, flanked by the UK and the US, which together make three of the “five eyes” intelligence group. Despite looking wobbly after four years of Donald Trump’s White House and the disaster of Brexit, they’ve become increasingly vocal in demanding that New Zealand criticise China openly and loudly. 

So when Mahuta stood behind a podium on April 19 to address the New Zealand China Council with dozens of pages of speech in front of her, she set out to keep the juggling match going: express concern about Chinese activity, but don’t anger the country’s thin-skinned leadership; commit to liberal values but avoid looking like you’re sucking up to Washington.

The foreign minister’s address invoked the dragon and the Taniwha. The two creatures of mythology, locked in a respectful dance, would come back often over the next hour to animate her all too real struggle. Then she spread acknowledgments around a packed boardroom before getting to work with a deep breath.

“It’s not getting any easier to be a small country,” she started. The international system that New Zealand depends on is crumbling. That small admission from the foreign minister was the first sign of what was to come. The great powers to either side of the Pacific, she wanted to make clear, are the reason things aren’t getting easier.

New Zealand needs an international system based on rules and consistency. That ensures the country’s products fetch fair prices in open foreign markets. Protectionism from the United States under President Trump sped up the undermining of that order, one that the North American superpower itself created over 70 years ago after the second world war. China is also not a fan of a system that it had no input in creating and that maintains all countries, from the small to the mighty, should be treated equally.

The China speech

This was Mahuta’s second big speech since becoming foreign minister. Her first speech, delivered in February to the country’s diplomatic corp from the cozy embrace of a waterfront restaurant down the road from Waitangi, made almost no headlines. This address was all China. Her venue was business to the core: the downtown Wellington boardroom of law firm MinterEllisonRuddWatts, with sweeping views of the city’s skyline behind her.

To her right as she spoke in the well upholstered office was a long table of business leaders with an interest in keeping trade flowing to China, including the chief executive of Air New Zealand. That half of the room, older and expensively dressed, kept quiet as she spoke. To Mahuta’s left was a collection of reporters from the press gallery, professionally suspicious, scribbling and banging out stories on laptops. The two groups were kept far apart.

The foreign minister’s speech laid out her programme for long-term engagement with China. It wasn’t radical, largely restating similar positions taken by her predecessors.

At its core is the idea of an independent foreign policy, something that has been around for decades. The term was once code for independence from Washington; now it means independence from Beijing as well.

“It is prudent not to put all eggs into a single basket,” she told the business leaders, adding that the government is interested in diversifying trade beyond the current reliance on China. To most of the reporters in the room, that was the speech’s tangible high point to that stage.

Mahuta also highlighted that as New Zealand’s first indigenous female foreign minister she would continue to pursue a foreign policy based on the Treaty of Waitangi. Along with a deep interest in self-determination for indigenous peoples, Mahuta’s programme requires a focus on “openness, transparency, democracy and the rule of law”.

The minister quickly acknowledged that those values are not shared by China. In a speech that stopped well short of directly denouncing Beijing, there was a fair amount of criticism peppered throughout. Jacinda Ardern has echoed her foreign minister in recent days, saying that when countries disagree, diplomacy is best served by nuanced dialogue.

In contrast to the security and human rights issues, Mahuta emphasised climate change as an area where the two countries are working well together. But she did have to return to the elephant in the room.

First, she reminded China that as a permanent member of the UN Security Council it has “special responsibilities”, especially as a growing power with interests in New Zealand’s Pacific backyard. That means that it should uphold the international system and stop undermining it. 

“As a significant power, the way that China treats its partners is important for us,” she said. New Zealand is watching how China plays with others, including through a series of infrastructure projects that it has undertaken in recent years around the world that have left poorer nations in debt spirals.

“Different perspectives can be positive, and underpin cultural exchange and learning, but some differences challenge New Zealand’s interests and values. There are some things on which New Zealand and China do not, cannot, and will not, agree,” Mahuta continued.

Ardern has said that she raised concerns about the country’s treatment of its Muslim Uyghur minority when she last visited Beijing in 2019. While the preference is quiet diplomacy, in cases where abuses are deeply at odds with New Zealand’s values, the private concern becomes public, Mahuta added.

“Sometimes we will therefore find it necessary to speak out publicly on issues, like we have on developments in Hong Kong, the treatment of Uyghurs in Xinjiang and cyber incidents,” she said. No translation is needed there.

Ardern later said she has heard a “clear message” from New Zealanders that public statements sometimes need to be made.

Mahuta’s early morning speech in April used the strongest language yet that while New Zealand is thankful for its economic ties with China, it will prioritise the country’s long-held values above them. It was not the speech you’d expect to lead to a series of condemnations from around the world. But that’s precisely what happened in the two days that followed. 

What happened?

Following the April 19 speech, Mahuta was asked by The Spinoff whether the careful diplomacy of balancing China’s economic access and the west’s security demands was tenable in the long run. She chose not to answer the question directly, but instead spoke about the Five Eyes, the intelligence alliance that comprises the US, UK, Australia, Canada and New Zealand.

In recent months, the Five Eyes has expanded beyond its historic role as a sharing platform for intelligence between the world’s major English-speaking countries and has begun putting out statements criticising Chinese human rights abuses. New Zealand has for the most part not signed the statements, but has put its own out a few days later, with softer language.

Mahuta said she was “uncomfortable with expanding the remit of Five Eyes” and that the government has made it clear to its partners that it will not “invoke the Five Eyes as the first point of contact on messaging out on a range of issues”.

Her statement about the Five Eyes was scarcely noticed in the room, especially in the context of everything she’d said in the previous hour. Then her answer to The Spinoff’s question hit London.

The Daily Telegraph’s defence editor thundered that Ardern was “cosying up to China’s communist rulers”. It was the start of a flood of editorials that described the prime minister as a virtue signalling, Communist-loving, wokester who had just surrendered to China.

Former Ukip leader and Brexiteer Nigel Farage said New Zealand had “sold its soul to China” and was choosing economic ties to Beijing over London’s security concerns. Bob Seely, a British Conservative MP widely regarded as a moderate in his party, said Ardern “virtue-signals while crudely sucking up to China and backing out of the Five Eyes agreement”.

A week later Ardern doubled down on Mahuta’s speech. She told reporters after speaking to the US Chamber of Commerce that New Zealand’s independent foreign policy means it won’t seek a permanent partnership with either China or its traditional allies in the west.

“We have never chosen partners, we have always chosen to stand on our values,” she said. That statement received no attention overseas.

The current kerfuffle over the Five Eyes will blow over. New Zealand isn’t leaving the intelligence alliance and no other member has suggested it should. But the bigger question remains unanswered: Are the days of win-win diplomacy coming to an end for New Zealand?

China’s rise has changed the world

This is a tough time for New Zealand’s small foreign policy establishment, as it grapples with some of the greatest challenges it has faced in decades. Three critical relationships are in different states of strain.

The trans-Tasman relationship, New Zealand’s indispensable link with Australia, is at a low ebb and the prime ministers are frequently at loggerheads. On the upswing is the bond with the United States after years of uncertainty during the Trump administration. Then there’s China, which remains New Zealand’s most serious foreign policy test in a generation.

China’s blazing economic growth since the year 2000 has no real precedent in recorded history. In two generations the country has gone from backwards and agrarian to the world’s first or second largest economy, depending on how you look at the numbers.

In recent decades much of the world’s growth has been centred in China and the country now dominates a wide swath of industries. Under the prime ministerships of Helen Clark, John Key and Bill English, New Zealand focused on China as an economic market. It was a classic win-win proposition. New Zealand relished its status as the first western country to sign a free-trade deal with China. The most recent update to that deal took effect earlier this year.

New Zealand, as a small country with an economy deeply-dependent on exports, has been something of a test case in the relationship between China and the west.

Wellington embraced the view, commonly held across the west in the 1990s and early 2000s, that as China joined international organisations and grew wealthier, it would liberalise its politics and follow the west-friendly footsteps of Japan, South Korea and Taiwan.

That didn’t happen.

As China became wealthier, it became more assertive both economically and militarily. Instead of reinforcing the rules-based international organisations like the World Trade Organisation that allowed its economy to grow, China began to slowly undermine them. Those trends were exacerbated by the arrival in the White House of a combative protectionist in Trump.

With its new economic power, China has shown little tolerance for foreign criticism.

In 2010 the Nobel Peace Prize was awarded to human rights activist Liu Xiaobo. The prize was put on an empty chair in Oslo, as Xiaobo was in his fourth prison stint at the time. In response to the decision by the Nobel committee, China ended nearly all seafood imports from Norway for years.

Wellington’s view under Winston

When Winston Peters entered the foreign affairs minister’s office in late 2017, the global view of China had changed significantly. It was no longer seen solely as a central and growing cog in the global economy, but increasingly as an unpredictable security threat as well.

In Wellington, the country’s political masters had focused on the economic potential of the relationship with Beijing. While there had been an increasing willingness to raise concerns about Chinese human rights abuses and geopolitical ambitions, New Zealand’s protests were generally muted. Peters set about changing that.

Robert Ayson, a professor of strategic studies at Victoria University of Wellington, described to The Spinoff what happened next.

“Officials who thought that the government hadn’t been assertive enough under National found a more receptive audience in the new government. China’s behaviour and public opinion towards it was changing in New Zealand,” said Ayson.

“The tenor of the debate had changed. National security, which has a far more negative view towards China, began to prevail in New Zealand and the happy, good-stuff trade view became less prominent.”

With Peters at foreign affairs and New Zealand First’s Ron Mark as defence minister, Jacinda Ardern’s first government in effect subcontracted the country’s foreign policy to its junior coalition partner, according to Ayson.

“Early on Peters and Ardern travelled to Sydney to show how important that trans-Tasman relationship was. Peters went to Sydney and effectively said that western influence in the South Pacific is declining, China’s influence is growing and New Zealand needed to step up,” said Ayson.

Some at the time may have dismissed it as a form of nativism or anti-China bias by Peters, who has embraced the role of campaigning on xenophobic dog-whistling in the past. But the moves broadly reflected what had happened at the start of the decade in Australia and the US. Under president Barack Obama, the US had committed to a Pacific pivot. The Democratic president pledged to put more economic and military assets in the western Pacific to contain China. Australia has also poured money into its military as a form of counter-weight to match Beijing’s ambitions.

Peters also showed an ability to dissemble when it came to his views on China. He was deeply concerned in one speech, but then when asked by an interviewer afterwards, would state that “no MP has taken a more positive view of China’s role in the world than Winston Peters”.

Ayson said it was spin that often left diplomats in Beijing and Washington reasonably happy. “He’d say that China was a great partner, but implied his real concerns,” said Ayson.

For New Zealand trade and aid officials, who were concerned about the lack of immediate attention on the South Pacific by previous governments, the vision from Peters was welcome. He was setting a path that Mahuta has picked up with gusto.

“Peters would later go to the United States and said that America needed to help us. It was like calling for the cavalry to charge across the horizon – at one point he cited the Battle of Midway as a sign that there’s an emergency in the Pacific and we need you again,” said Ayson.

After Peters’ speech got media attention back home in New Zealand, Ardern suggested her foreign minister might have overstepped. She would talk about a positive relationship with Beijing, noting that there was a need to balance security concerns with the country’s trade relationship with China.

Crossing the rubicon in 2018

Xi Jinping’s decision to rewrite China’s constitution and make himself president for life in 2018 has been a marker in a deep shift in that country’s relationship with the world.

Along with undoing term limits, Xi removed safeguards that the Communist Party had installed in the decades after Mao Zedong’s death to prevent the ascent of another dictator. After Deng Xiaoping’s reign, an increasing amount of democracy was practiced within the party – a middle way that, while maintaining one-party rule, was meant to stop abuses like the Cultural Revolution from happening again. Xi has removed the constitutional brakes on his power and started building what some say is beginning to resemble a Mao-like personality cult. He’s now accumulated more political, military and economic power than any of his predecessors since Mao.

A cautionary tale for New Zealand also began on December 1, 2018, when the chief financial officer of Huawei was arrested at Vancouver International Airport by Canadian customs agents. Meng Wanzhou faced a US extradition request for allegations that she had committed fraud.

The arrest was something Canadian authorities were required to do under international treaties and the need to follow the rule of law. Meng remains under house arrest in Vancouver.

However, the arrest was made in the middle of a trade war between China and the US – Xi was at a summit with president Trump at the time. Global attention has also focused on Huawei for years. The high tech company, a darling of the Chinese state, has been viewed with suspicion for its links to the country’s intelligence services. 

Most Five Eyes countries have blocked Huawei’s technology from their national 5G networks. New Zealand, in what should clearly be a trend by now, has been more ambiguous, with muted warnings about the company. There are no plans by any local mobile provider to use its technology, making the need for an outright ban unnecessary.

In the two years since Meng’s arrest, China responded by blocking nearly all Canadian food exports at some point, including pork, beef and cereals. A Canadian diplomat and businessman were also arrested and charged with espionage. The arrests have been widely condemned as hostage diplomacy. The country’s national newspaper runs an updated ticker on its front page every day displaying how long the two men have been jailed.

Much like New Zealand, Canada had preferred to focus on its economic ties with China prior to the arrests. Chinese state-owned companies were allowed to purchase significant Canadian corporations, often despite protest from the US. Canadian exporters thought they would be exempted from any political spats because they exported high-quality foods to China. Those beliefs were ended by the retaliation to Meng’s arrest.

Relations between the two countries have broken down. Canada’s parliament has labelled China’s treatment of its Uighur minority a “genocide”. Polls now show 85% of Canadians don’t like China and think human rights should take precedence over trade concerns. 

That’s not a view that has been widely adopted around the boardroom table of New Zealand business. A senior representative of the country’s business council disclosed in an off the record conversation earlier this year that they believe New Zealand’s local industries would be exempt from any possible future political dispute with China because our exports are largely food-based.

Wellington’s earlier focus on China’s economic potential is still sometimes visible in public. Speaking at the China business summit on Monday, former prime minister Key said that New Zealand needs to balance its economic interests with criticism.

“Tens of thousands of New Zealand businesses rely on trade with China. I would not throw that away simply because people around the world are taking a different perspective,” he said. It’s a view, once prevalent across friendly capitals, that’s becoming extinct.

When things stopped being easy

China’s relationship with the world has become dominated in recent years by the country’s crackdowns in Hong Kong as well as its treatment of the Uighur minority in Xinjiang province. Peters often saw the country’s relationship with China through the need to deal with an emerging struggle between China and the US for supremacy in the Pacific.

“When Winston Peters got up in the morning and looked at the world he saw things through a geopolitical lens, he saw it through the lens of great powers. He was a big promoter of New Zealand’s relationship with the US and has for a long time,” said Ayson.

Nor was he afraid to let people know how long he’d been around the diplomatic traps. Fronting for the prime minister in the Beehive theatrette in the last months of his time in office, Peters was asked about a recent crackdown in Hong Kong. 

The city’s autonomy within China was supposed to be protected for 50 years by a Sino-British declaration in 1997 when the territory was transferred to China from the UK. After two decades respecting the agreement, it has been shredded in recent months. The UK now says it has been violated three times, by Chinese laws that have criminalised pro-democracy movements in the city, ended the independence of its judicial system and effectively ended local democracy. The UK has responded by offering citizenship to three million residents of the former British territory.

Back in the Beehive, Peters had just harangued a reporter for the phrasing of a question and moved on. Asked about Hong Kong his tone and body language changed. “I expect them to respect the declaration, I was there, promises were made to me,” he said.

Peters said that Chinese leaders had told him they would protect the city’s institutions. He was professional but upset. It was personal. Weeks later he would suspend New Zealand’s extradition treaty with Hong Kong, snipping one of the country’s ties with China.

“He’s used to that smoky room diplomacy that others might eschew. That includes China, and Japan and the US and all the important players. When he looks at the South Pacific he considers the distribution of power. Who is ahead. That was the way he saw China, as changing the balance of power in Asia and that concerned him. That has considerations not only for New Zealand, but it’s most important partner Australia,” said Ayson.

“I don’t think Nanaia Mahuta sees the world that way.”

Over several weeks of requests Mahuta was unavailable for an interview with The Spinoff. Speaking on Monday morning in Auckland, China’s ambassador denied any human rights abuses are taking place in the country, calling them a fabrication.

The second Ardern term

New Zealand has faced increasing pressure over the past few years to take a more vocal position on China, whether that’s on its human rights abuses, intellectual property theft or military moves in the South China Sea. 

Because of its decision not to sign onto a number of recent proclamations from the Five Eyes, New Zealand, rightly or wrongly, is seen as the weakest member of the intelligence alliance. New Zealand is also the only member of the alliance to have so far escaped a campaign of economic reprisal for offending China. 

The Global Times, a daily tabloid owned by the Chinese Communist Party, runs stories and editorials about New Zealand’s relationship with China on a regular basis, far more often than would be expected of a country of five million. Officials in Wellington know that it’s helpful for the Chinese to have one western country with English-speaking people and a Union Jack on the flag that it can point to as a friend.

Foreign policy doesn’t often make the front page in New Zealand but the Ardern government faces a difficult series of foreign tests over the next three years. After relying on New Zealand First to execute the country’s foreign policy, it now rests fully on Labour.

Trade minister Damien O’Connor’s ill-judged remarks in January that Australia should “follow us and show respect” to China didn’t improve the country’s image in western capitals. “I guess [Australia could show] a little more diplomacy from time to time and be cautious with wording,” he added.

The remarks angered Australian politicians. Mahuta spent weeks defusing the situation, stuck in an uneasy position where she could neither retract his comments nor support them.

The future of New Zealand diplomacy

The challenges and opportunities associated with China’s rise are only expected to become bigger in a post-Covid world. The new Biden administration has mused about creating an alliance of democracies to work together and contain Chinese aggression. It will be harder for the Beehive to ignore a Biden White House than Trump’s.

At the end of a long conversation with the US Chamber of Commerce last month, Ardern was asked what the world should spend more time thinking about. “How do we reinforce the global architecture,” was her answer.

According to Ardern, we should recognise that in a world where pandemics and climate change don’t respect borders, we need stronger international institutions that help fix problems. “We need to act collectively much, much more often and hold ourselves to account for our actions,” she said.

There’s a middle path between people who might conclude that the country can keep having its cake and eat it when it comes to the superpowers, and those who think that New Zealand will eventually be forced to align with Australia and the US. According to Robert Patman, a global security expert from the University of Otago, that path is in making friends.

New Zealand’s independent foreign policy isn’t just about hedging between the superpowers, it’s also about building relationships around the world. If it’s going to survive, New Zealand’s independent approach needs international institutions and a system based on rules to grow stronger.

With the two superpowers playing a global game of chess, New Zealand has an opportunity to help rally the countries that find themselves in a similar situation, according to Patman. Especially this year as it plays host to APEC. Many parts of Europe, Japan and Canada also depend on a functioning World Trade Organisation and United Nations. The Five Eyes does not have a monopoly on concern about human rights in democracy — far from it. 

“New Zealand’s position for an independent foreign policy is credible, but it needs to put some flesh on the bone. It’s not always about splitting in the core difference between the US and China. It needs to be a more active player,” said Patman. 

“After the Christchurch attacks and Covid-19 this country is seen as a larger player than it has been in decades. New Zealand doesn’t have a lot of power to assert itself, but it has a lot of credibility, a big profile and Jacinda Ardern is widely admired,” he added.

Speaking to the China business summit in Auckland yesterday, Ardern repeated nearly all the points made by Mahuta in her speech in April. However there’s no sign yet of her striking out beyond the old dance.

“Areas of difference need not define a relationship,” said the prime minister. “But equally, they are part and parcel of New Zealand staying true to who we are as a nation.” That’s a statement designed to please and anger no one. 

While British politicians and Australian newspapers won’t like it, there might still be room for an Ardern doctrine that looks beyond the superpowers and finds strength in numbers. Instead of looking to London, Washington or Beijing, Wellington might instead have better luck with Tokyo, Berlin and Ottawa. Now it’s a question of whether the prime minister is willing to try.

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