The NZ PM has been welcomed to Beijing with a commentary at the state news agency (nb See update at foot of article) cautioning such an ‘absolute outsider’ against raising the South China Sea dispute, suggesting to do so would imperil trade relations. It doesn’t come completely out of the blue, explains Asia-Pacific expert David Capie.

China’s official news agency Xinhua has given New Zealand a terse warning not to raise territorial disputes in the South China Sea during Prime Minister Key’s visit this week or else risk “complicating” flourishing trade ties. The warning, which comes in a strongly worded “commentary” piece, describes recent comments by the Prime Minister as “surprising” and says they go against “New Zealand’s previous pledges not to take sides in the region’s territorial disputes”. The article suggests they were “likely under the pressure of his country’s military ties with the United States”. It also characterises New Zealand’s participation in a Five Power Defence Arrangements (FPDA) exercise in the South China Sea this week as “baffling”.

Disputes in the South China Sea go back decades, but over the last three years in particular, the situation has got progressively worse. In 2012, Chinese and Philippines vessels clashed over access to the Scarborough Shoal, less than 200km off the coast of Luzon. In 2014, Vietnam’s relations with China plunged following clashes in disputed waters. And in the last two years China has begun an unprecedented effort to construct artificial islands on a range of reefs and partially submerged features in the Spratly Islands, to the consternation of some of its neighbours. For its part, the United States has declared it has a national interest in freedom of navigation and overflight in the region. The US Navy has carried out two Freedom of Navigation Operations (FONOPS), sailing close to disputed features to assert these rights.

New Zealand has not been voluble when it has come to the dispute. But over the last year, as tensions have risen, it has cautiously found its voice. Comments by the Prime Minister in a joint statement with his Australian counterpart in February and two recent speeches by Foreign Minister Murray McCully in Singapore and Sydney represent a significant if incremental extension of New Zealand’s position. They have clearly attracted attention in Beijing.

McCully’s speeches are particularly important as they are the first time he has offered lengthy public comment on the South China Sea. Previous statements to Parliament’s Foreign Affairs and Defence Select Committee or at the ASEAN Regional Forum have never appeared on the Beehive website. Instead, it has been Defence Minister Gerry Brownlee who has publicly set out New Zealand’s position, first at the Shangri-La Dialogue regional security forum in 2015 and later in a speech delivered to China’s National Defence University in Beijing. Along with the Prime Minister’s comments, the McCully-Brownlee double act underlines the seriousness with which the issue is being viewed in Wellington.

There is also some new language in the foreign minister’s recent speeches. First, New Zealand has taken a clearer position on what’s driving the troubles. Speaking in Singapore McCully said the “particular cause” of “heightened tension”, was the “reclamation and construction activity” taking place in disputed areas. This was the first time any New Zealand minister has publicly said reclamation activities (which are overwhelmingly, but not exclusively, being carried out by China) are part of the problem. Previous speeches only referred to a desire to “better understand the intentions of countries undertaking reclamation activities.”

Second, both the Singapore and Sydney speeches make reference to “the deployment of military assets” in the South China Sea as a factor in escalating tensions. American officials have frequently criticised China’s “militarisation” of features, for example through the deployment of missiles on Woody Island in the Paracels, and the building of powerful radars on features in the Spratly Islands. Prime Ministers Key and Turnbull also called on all states to halt militarisation in their February joint statement. McCully’s phrase “deployment of military assets” is distinct and arguably softer. Pointedly, however, in both speeches he reminds his listeners that in 2015 China’s President Xi Jinping pledged “not to militarise new features”.

Third, and most importantly, McCully refers specifically to the Philippines’ case against China that is currently before the International Tribunal for the Law of the Sea (ITLOS) in The Hague. New Zealand has previously said it supports the rights of states to access international dispute resolution mechanisms, but Beijing would not have been pleased to see such a direct reference to the Philippines action. The Tribunal’s decision is expected soon, and McCully said “we expect all parties to respect” it. Given that China stated clearly in a December 2014 position paper that it would not accept the decision of the Tribunal, this is a plain and public disagreement with Beijing.

If some of the language is new, there is also a good deal of continuity in the recent remarks. There is a considerable effort to be even handed. The relevant section in the Prime Ministers’ joint statement in February called for restraint by “all claimant states”, and did not even mention China. McCully’s speeches reiterate that New Zealand “does not take a position on the various territorial disputes” and make clear that reclamation and the deployment of military assets is unhelpful “regardless of the party involved.” In a not-so-subtle dig at the United States, McCully expresses regret that “some with interests in the process are not yet parties to the UN Convention on the Law of the Sea”. But those comments notwithstanding, there is no doubt the language moves New Zealand closer to the position that has been taken by its traditional security partners.

This raises the question: why now? One theory doing the rounds is that this is evidence the gloss has gone off the New Zealand-China relationship. As China’s economy slows down, what has largely been seen as an enormous economic success story is increasingly beset with niggles. Some point to frustrations on the part of New Zealand officials wanting to renegotiate the New Zealand-China Free Trade Agreement. There have also been allegations that China is acting outside the spirit of the FTA by enforcing a series of Non-Tariff Barriers in the forestry sector. New Zealand hasn’t got much for taking a softer line, or so the theory goes. There are doubtless irritations, but it’s very hard to see how linking trade and security at this point in time could have any kind of positive outcome for New Zealand.

Much more likely is that New Zealand wanted to make its position on the Philippines’ ITLOS case absolutely clear before the decision is announced in the middle of the year. Most of what is in McCully’s speeches has been said by ministers before, only not publicly. If the Tribunal’s decision goes against China, as many predict, then Beijing can’t say it is surprised if New Zealand joins calls for it to follow the ruling.International law and multilateral institutions are just too important for Wellington to do otherwise. The Law of the Sea is especially significant, given New Zealand has the world’s fourth largest Exclusive Economic Zone.

Another factor is that the facts on the ground have changed and New Zealand’s position needed to move with them. China’s actions in recent months have elicited growing concerns, not just from the US and Australia, but increasingly from across ASEAN. Singapore’s leaders have expressed disquiet about the deteriorating situation. Even Malaysia, which has historically preferred “quiet diplomacy” and been reluctant to criticise Chinese actions, has spoken of a need to recalibrate its policy and “push back” against Chinese assertiveness. And in the last few weeks a clash between Chinese and Indonesian vessels near the Natuna Islands has only further highlighted ASEAN anxiety.

It is surely no coincidence that McCully chose Singapore to make his first public comments. His language on the South China Sea followed fulsome praise for the ASEAN-centred regional security architecture, describing arrangements such as the East Asia Summit as the “key vehicle for engagement” on political and security challenges. In taking a somewhat more confrontational stance towards China, New Zealand might be more comfortable doing so amongst the ASEANs, highlighting that its position is subtly different from the positions of the United States and Australia.

The Xinhua commentary shows the challenge New Zealand faces in taking this independent line. The writer bluntly states that Wellington is “advised to be more discreet in its words and actions” and says it should “chart its own course in its relations with China rather than have its agenda hijacked by the ambitions of its military allies”. The closing sentence is particularly ominous, warning “the future of bilateral ties between New Zealand and China, to some extent, depends on Wellington itself”. With the ITLOS decision looming, the tone of the piece suggests there may be troubled waters ahead.

Update: The Xinhua post, along with another similarly themed piece at the Chinese Global Times, has seemingly been deleted as of Tuesday evening NZ time.

This is an updated version of an earlier post that appears at Incline.