Prime Minister Chris Hipkins has travelled to China to deliver a single “crystal clear” message: New Zealand is open for business.
The borders that were closed during the pandemic have weakened two important exports, tourism and education, which the prime minister wants to get going again.
Weakness in these sectors has been a significant factor in our troublesome trade deficit, which threatens to sully New Zealand’s perfect strong rating if not reined in.
To make that happen, he wants to demonstrate NZ remains a reliable and pragmatic partner — even as other Western countries take an increasingly hard line on China.
The total bilateral trade between NZ and China was $40.3 billion in 2022, with New Zealand exports making up $21.4 billion of that. A third of these exports were dairy products, while meat and wood were the next two biggest categories.
Hipkins arrived in Beijing, with a delegation of 29 businesses, late on Sunday night after a 20-hour flight which leapfrogged from Wellington to Cairns to Manila before arriving in China.
The main goal of the trip is to kickstart tourism and education exports as China emerges from Covid-19 restrictions.
As recently as late last year, the country was still intensely concerned about the pandemic and movements in and out of China were severely limited. Masks, testing, and insolation were common.
Then the country’s leadership pulled a 180 degree turn and all pandemic-era restrictions were erased (except for anyone meeting with members of the Poliboro, where tests and masks are still required).
The reopening has cleared the path for the first Prime Ministerial visit to China since 2018 to build the government level relationships that enable business activity.
Political difficulties
But while New Zealand and China’s trading relationship remains enthusiastic, the political context surrounding it has become much more complex.
The relationship between NZ’s traditional military partners, led by the United States, and China has deteriorated dramatically in recent years.
China’s foreign minister Qin Gang recently described the relationship with the US as being at its “the lowest point since the establishment of diplomatic relations”.
New Zealand’s political relationship with China has remained healthy, although being stuck between the two superpowers has added stress to a longstanding friendship.
On Monday, Hipkins said the relationship was in “good shape” with areas of agreement and the ability to discuss disagreements without significant blow-back.
NZ’s foreign policy prioritises trade over more contentious issues and has been described as the most ‘China-friendly’ of the nations in the Five Eyes security partnership.
Mattie Bekink, the chief economist at the Economist Intelligence Unit, said China respects nations that are neutral and open minded.
She commended Hipkins for his response to US President Biden’s “off-the-cuff” comments describing President Xi as a dictator.
“I think that it’s too easy to fall into this tit-for-tat spiral, or get caught up in the tension between the United States and China,” she said.
Dictator or not
Biden’s comments were not well-timed for Hipkins, who will meet Xi in the Great Hall of the People, in Tiananmen Square, on Tuesday.
In the days prior to his departure, Hipkins said he disagreed with Biden’s characterization and said it was “not language he would use”.
He told reporters on Monday that he will focus his talks with the Chinese president on the importance of the trade relationship between the two countries.
“We’ll also be aiming to strengthen that government-to-government, so that where there are areas where we disagree we can have open dialogue about those,” he said.
He flagged human rights and geopolitics as two areas where the countries had disagreements, but wouldn’t go into specifics.
This may be a reference to the suppression of Muslim minorities in Xinjiang, China’s refusal to condemn Russia’s invasion of Ukraine, and territorial disputes in the South China Sea.
Hipkins will also meet with Viet Nam’s prime minister, Pham Minh Chinh, on Tuesday. Viet Nam has disputed China’s claim to rights over much of the South China Sea.
New Zealand will voice its policy positions on human rights, the war in Ukraine, and regional security, but the number one goal in China remains a stable trading relationship.
31 Comments
No. VIP duties are a small part of the total use of the aircraft. They carry personnel and freight all over the world. They're just too old now. A 787 with a freight door would serve well. The KC46 Pegasus, is based on a 767 and would be a good option without the refuelling kit unless we are reactivating a strike wing?
Hipkins has decided to be of the past - as his oppo already did (probably without thought, in the latter). This parallels the unsolvable University model-failure, the ski-field ditto, we have to ask how long government 'money' can kick these cans how far down the road.
Leadership should, on balance, be aimed at the future.
Last I heard, you cannot got back to it.
Will be very interesting to see if 5 Eyes, and our alignment with the West is raised. Perhaps we need to reduce our reliance of China anyway. The Chinese Govt probably wants the money hiding in our housing market back as well.
Then there is our lead influencer, Mahuta. I would want a please explain as well.
At what stage do you decide to put values and morals before making money? At what point does it become immoral to continue to trade with another country which cares little for human rights? When that other country detains ethnic minorities in camps? Or when it invades another territory perhaps?
This is an open question, I don’t bloody know where the line in the sand should be drawn, and I am aware how reliant we are on trade with China.
It’ll be interesting to watch because all around the world in the 21st century- not just in NZ - economic growth seems to be the number one value that trumps all others.
Good comments. Hard, ey.
Personally I think we need to move our reliance away from China, by very actively developing other markets. Less about a strong lurch away from China, more about a more gradual evolution. Regardless of geopolitics, something we should be doing anyway to become more resilient.
Yes developing other markets would be like an insurance policy but require a bit of hard work to achieve. The lower hanging fruit from China has been the most tempting to harvest for a while and many businesses will be reluctant to lose it.
I think it does and should depend on a moral stance too, but at what stage?
I think we can confidently say that China would be insane to invade Taiwan. Surely then, they would lose a lot of trade.
This comment shows the typical western arrogance, pride and prejudice against none western cultures.
Human rights are not defined by the west. History has all the memories of the appalling human rights records in all major western powers.
Gun violence, police brutality, drug related crimes, tension on race relationship, discrimination, and recently indoctrination of LGTBQ's rights to school children, and indoctrination of Maori rights above other ethnicities in NZ.
The list goes on and on. I wonder where your courage is from when pointing your dirty fingers to China.
Xingmowang, in your rather defensive post you fail to answer my question of, ‘at what point on moral grounds do we decide to move away from trading with another country?’
Instead you bring up past abuses by western powers and dirty fingers, which I’ll happily respond to;
We must recognise abuse anywhere and learn from history. Countries change over time however. We know the Germans are no longer Nazis, therefore we are happy to trade with them. When they kept minorities in camps and invaded other territories… not so much.
Once again I ask the question; at what stage should New Zealand consider cutting trade with other countries based on moral grounds? Perhaps Xing, if they had a crack at their democratic neighbours? Would that be an immoral action strong enough to justify looking elsewhere for trading partners?
That’s a good question and after how long is it no longer considered immoral to trade with another country which has committed evil in the past?
I don’t know. But I don’t think it would have been considered morally acceptable to trade with the Nazi regime, neither then or today in the 21st century.
Would love to know where that line in the sand should be drawn.
China has lifted millions out of poverty whereas in the US millions are becoming poorer
Huh. Interesting that. China lifted millions out of poverty by allowing a small amount of capitalism to operate within their communist system. Meanwhile, in the US, by allowing a small amount of communism to operate within their capitalist system millions are falling into poverty. Who'd have thunk?
You confuse driver with driven.
China isn't Communist - it's autocratic. Capitalism, unfortunately, is energy-dissipative. As can be Communism, as can be Autocracy. The latter two, though, have the potential not to be dissipative; Capitalism does not.
So Capitalism doesn't survive the carbon pulse.
https://www.thegreatsimplification.com/
Nobody gets 'lifted out of poverty'; they get access to more energy, more resources. Exponentially more people can't keep on doing that on a finite planet.
Sigh.
At the heart of it, I think that will come back to historical ties and the question of who would you wish to back you in a global conflict. More so what would the post-conflict period look like + what repercussions would there be for our country based on who we support.
At what point does it become immoral to continue to trade with another country which cares little for human rights?
The sad but true answer to this is that we rely on cheap goods manufactured in China to sustain our standard of living. If we export so much to them and our primary income source is exports then the loss of income form this cut in ties would drop us into a very hard recession the likes we have not seen in a century. Sadly we need them. We can wean off of them over time by making other trade alliances and shifting towards them but at present we need them.
I hope that as the cost of labour increases over there it becomes less and less beneficial to have manufacturing there and we shift our focus to other countries. I'd prefer a few nice things of good quality that 250 cheap K-mart things that are unnecessary and last all of 20seconds before expended their use.
I'd prefer a few nice things of good quality that 250 cheap K-mart things that are unnecessary and last all of 20seconds before expended their use.
I cannot think of 1 product I ever bought from Daiso for 100 yen that didn't fulfill its function. Businesses like Daiso stretch a consumer's wallet. This has been particularly important in a country like Japan where wage growth has been non-existent.
"Less than 1% of customers appear to be driving almost two-fifths of sales in China’s biggest luxury malls."
While luxury brand prices have high margins, this is an indicator of Chinese consumer behavior. In a slowing economy, displaying wealth will become unacceptable in China. And NZ is still trying to sell high margin products in China. But it's not what they want now and into the future.
https://www.ft.com/content/4bc4825c-ff8c-40ff-8dd5-f24edcd5df2b
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