Will New Zealand Follow in Australia’s Footsteps on China?


Picture Credit: QFSE Media

Australia and New Zealand are often considered together, close enough that their people even joke about the two being one country. Both are liberal democracies and former British colonies in Oceania, both have a deep love of cricket and rugby, both have a navy flag with a Southern Cross and a Union Jack in one corner, and both adamantly claim pavlova as a national dessert and invention. But in one respect, at least, they seem completely different – in their approach towards China. Whilst Australia’s relationship with China has grown increasingly acrimonious, New Zealand’s is held up by the Chinese state as a model for international relations. Does it make sense for these two Oceanic countries to have these very different approaches, or is one of them making a mistake?


It is no mystery how these two close friends got into this situation. Australia and New Zealand are geographically isolated from their Western friends and trading partners, and China is relatively close by and very rich.


Over the last two decades, Australia’s relationship with China has been motivated primarily by fear and greed. Trade with China buoyed Australia’s economy and allowed the country to scrape through the global financial crisis of 2007-8 without a recession. But at what cost? By 2015, when Malcolm Turnbull became prime minister, Chinese influence in Australian affairs was everywhere: in politics, in business, in attempts to buy public infrastructure and agricultural land. Turnbull decided that the risk this posed to Australian sovereignty and ideals was too high and began standing up to Chinese influence, a policy continued by his successor, Scott Morrison, who in 2020 called for an independent investigation into the origins of the COVID pandemic (thought to have originated in China). China, angered by Australia’s newfound assertiveness and what it perceived as attacks against it, gave Canberra a list of 14 grievances – basically demanding that it align itself with Beijing’s interests. When Australia refused these demands, China hit it with a raft of sanctions, which has cost the country billions in exports (with no end in sight).

Former Australian Prime Minister Malcolm Turnbull (Picture Credit: Matt Roberts, ABC)

Despite Australia’s fate – or perhaps because of it – New Zealand has worked hard to chart its own course with the Asian superpower, especially since China is its largest trading partner, accounting for more than three times the exports to its second largest partner, Australia. In mid-2021, China accounted for around 32% of New Zealand’s total exports, but significantly more than that in certain industries: 48% of Kiwi timber exports went to China (including 90% of logs), 43% of dairy exports, 41% of meat, and 36% of seafood. (These statistics are eerily similar to Australia’s export numbers before its “breakup” with China. For example, in 2019, China also accounted for 32.6% of total Australian exports, 95% of timber, 37% of milk, 25% of meat, and 76% of lobsters.)


Touting mutual respect, in contrast to the Aussies’ blunt speech, the Kiwis have tied themselves in linguistic knots to avoid angering Beijing. New Zealand’s trade minister, Damien O’Connor has even suggested that Australia should follow his country’s example by “showing respect” to China and “being cautious with wording” in order to restore diplomatic relations. For example, when commenting on China’s treatment of Uyghurs, New Zealand’s parliament downgraded an accusation of “crimes against humanity and genocide” to “severe human rights abuses” because, as O’Connor said, “clearly the Chinese government wouldn’t like something like that.” At times, New Zealand’s policy of careful words has meant breaking with or alienating traditional allies in order to mollify China. For example, when the WHO investigation into the origins of COVID in China was delayed and obstructed, 14 countries (including New Zealand’s Five-Eyes partners, Japan, and South Korea) released a statement questioning the efficacy of the investigation, but New Zealand was noticeably absent. Similarly, New Zealand has refused to sign statements from the Five Eyes intelligence-sharing group that condemn China, choosing instead to release its own, much milder, statements. When questioned on her government’s softer stance, New Zealand Prime Minister Jacinda Ardern is quick to deny that her country has compromised its values and asserts that New Zealand raises its concerns both publicly and privately, that anyone who suggests otherwise is dealing with a “perception issue” rather than “reality,” and that, frankly, her approach is better anyway because “what leaders in Beijing hear is when I raise issues directly, which I do.” New Zealand is also the only Western nation that’s signed up to China’s Belt and Road Initiative (though the countries remain in talks about what, exactly, that will entail).

New Zealand Prime Minister Jacinda Ardern

The results of these different approaches are stark. China trots its relationship with New Zealand out as a model of Sino-Western relations, a shining vision of what other nations could have if only they were as respectful as Wellington. Articles in Chinese state media outlet Global Times hold New Zealand up as an example to Australia and argue that Australia is just “envious” of New Zealand. Since early 2020, key Australian industries like barley, beef, and coal have been sanctioned by China, costing Australia more than $12.4 billion dollars’ worth of exports in the first three quarters of 2021 alone; New Zealand, on the other hand, has had its free trade agreement with China upgraded (on Australia’s national holiday, January 26, no less).


But this doesn’t mean New Zealand’s strategy is working better than Australia’s, for whilst Australia has already weathered something close to a “worst-case scenario” without too much pain, New Zealand continues to walk a very fine line with danger on either side. And, as Australia discovered, maintaining a friendly relationship with China without betraying your own values and sovereignty is a tough balancing act.

As Australia discovered, maintaining a friendly relationship with China without betraying your own values and sovereignty is a tough balancing act.

Whilst New Zealand’s equivocation has kept it in China’s good books, it has caused many other Western countries, including some of its key partners, to view it with distrust. One major Australian news outlet, 9News, has implied that New Zealand values “dollars” over “decency;” The Times (UK) joked about cutting the Kiwis out of Five Eyes, running a headline that stated, “Five Eyes Cut to Four as New Zealand puts Trade First;” during a debate about China’s treatment of Uyghurs, a British politician accused New Zealand of “virtue signaling while crudely sucking up to China” and of being “in a hell of an ethical mess;” and a Canadian Security Intelligence Service report called New Zealand the “soft underbelly” of Five Eyes.


In a way, this trade-off may seem to make sense, since upsetting Western countries carries fewer risks than upsetting China. Western nations abide by international laws and mores and, as liberal democracies, are more tolerant of dissent; by contrast, China is hypersensitive to any slight and extremely vindictive, and its rules of engagement are warped and unpredictable. Thus, it’s understandable that New Zealand chooses to prioritize China’s feelings, since its relationships with Australia and other Western nations will probably trundle along without too much effort.


But even New Zealand is growing uneasy with how overdependent its economy is on China. In May 2021, its foreign minister, Nanaia Mahuta, warned Kiwis to diversify, pointing to Australia, and asking what would happen if “something significant happened with China.” Its trade minister, Damien O’Connor, also strongly encouraged diversification, though he managed to do so without even mentioning China. But everyday business operators have found it hard to diversify without support from other trading partners. Notably, the US still does not have a free trade agreement with New Zealand, and the UK is still hashing one out. Thus, the Kiwis maintain that if anyone is to blame for New Zealand’s reliance on China, it is its Western partners. As the Kiwi opposition leader, Judith Collins, said: “If any criticism comes to New Zealand, as it often does about this close relationship with China and trade, my answer to everybody – whether they’re the US or UK – is: ‘So where’s our free trade agreement?’”

New Zealand opposition leader Judith Collins (Picture Credit: nznationalparty)

It is difficult to confirm why, exactly, New Zealand has struggled to secure trade deals, but it is not for lack of trying. Most recently, former President Donald Trump tanked the Trans-Pacific Partnership deal in 2017 by withdrawing the US from talks and preventing ratification, leaving New Zealand out in the cold. Similarly, the UK’s pending new deal with New Zealand has only become possible because British Prime Minister Boris Johnson now wants to “tilt” to the Indo-Pacific.


Right now, Australia serves as a foil for New Zealand, allowing it to frame itself as China’s best friend in the West, which in turn allows it to get away with mild criticism of Beijing. (Although careful with its wording, New Zealand has publicly criticized China on many occasions.) New Zealand now sits atop a Chinese pedestal, but its position is precarious, and one wrong move (or statement) could send it toppling down.


The truth is that managing New Zealand’s relationship with China is requiring more and more effort, something Ardern herself acknowledged in May 2021 when she said that their differences were “becoming harder to reconcile.” In 2021, New Zealand was the target of a “malicious cyber-attack” which the government attributed to Chinese-state-sponsored actors. The Kiwis also felt the first tremors of a potential trade spat with China when COVID-19 was (allegedly) detected on a Zespri kiwifruit in China (a potential reason to halt imports), with opposition leader Judith Collins implying that the finding was politically motivated. In other words, Wellington is discovering that its relationship of “mutual respect” with Beijing is extremely one-sided. Despite Ardern’s best efforts to placate China, 2021 ended on a sour note for Sino-Kiwi relations, with New Zealand’s defense force classifying China’s expansion and regional aggression as a security threat for the first time.


In fact, despite believing that it’s charting its own course, New Zealand may be unwittingly following in Australia’s footsteps – just a few years behind the curve. Tracing Australia’s prior decisions shows that New Zealand is often close behind. Australia was the first to ban Huawei from its 5G network in 2018, but its intelligence service had been privately warning and dissuading key business people since 2010; New Zealand has yet to ban Huawei entirely, but an arm of its intelligence service (the Government Communications Security Bureau) has rejected applications for its use since 2018. Australia first banned foreign donations from domestic politics in late 2018 because of concerns about China, New Zealand did this in late 2019. Four years ago, 12% of Australians viewed China as a threat, rising to 41% in 2020, and 63% in 2021; two years ago, 22% of Kiwis viewed China as a threat, rising to 35% in 2021.

Despite believing that it’s charting its own course, New Zealand may be unwittingly following in Australia’s footsteps – just a few years behind the curve.

With similar values to Australia, similar policies, and increasingly similarly experiences of being bullied, New Zealand’s relationship with China will go the way of Australia’s as it struggles to toe China’s ever-growing list of “red lines.” Thus, it is not so much a question of whether Australia’s strategy is worse than New Zealand’s, so much as a question of how long New Zealand can delay adopting Australia’s strategy for itself.


So far, New Zealand has judged well, balancing risks against rewards, and has kept from deeply offending any partners. But sooner or later, Kiwi values will come into irreconcilable conflict with China’s, and the longer New Zealand delays, the greater the risk of alienating traditional, dependable Western allies Wellington will need when its relationship with Beijing inevitably goes south.