New Zealand’s most important relationship is also its most difficult

As Prime Minister Christopher Luxon heads to Vietnam next week with plans to bolster economic growth, some critics say he should be focusing slightly further north.

Just a few hundred kilometers north of the Vietnamese capital, Hanoi, lies the southern border of China — the world’s second-largest economy and New Zealand’s biggest trading partner.

Luxon is expected to visit the superpower later this year, but not before he’s been almost everywhere else. His work as New Zealand’s top diplomat began in 2024 with a strong focus on Southeast Asia.

Since becoming Prime Minister, he has traveled to Singapore, Thailand, the Philippines, Japan, Malaysia, South Korea, the East Asia Summit in Laos, and now Vietnam.

This has been a deliberate effort to strengthen trade relationships with countries that share economic similarities with China but are more aligned with the Western worldview. Luxon has also made multiple trips to Australia and attended the NATO summit in Washington, DC.

Soon, he will head to India, where he hopes to open trade talks with the world’s most populous country, before an expected visit to China sometime after that. If that sequence holds, China would be roughly the 20th country on Luxon’s list.

This lack of urgency is somewhat offset by other engagements with China. Prime Minister Chris Hipkins led a trade mission there in 2023, Premier Li Qiang visited NZ last June, and Luxon met President Xi Jinping on the sidelines of APEC.

Still, some believe the New Zealand government should be doing more to preserve its relationship with China. Carl Worker, a former ambassador to China, wrote on Twitter that visiting Vietnam first was “playing favourites among Asia’s communist countries.”

Think of the economy

David Mahon, a Kiwi investment consultant in China, told the Of Interest Podcast it was “almost a diplomatic insult” for Luxon not to visit in his first year as Prime Minister.

It’s unclear whether he could have visited sooner—after all, he must be invited—but Mahon said China was "determined to retain its relationship” with New Zealand and would likely welcome a visit.

Former Prime Ministers John Key and Helen Clark have both criticised Luxon and Jacinda Ardern for shifting foreign policy away from China, toward more traditional Western allies.

Speaking at a "Vision 2025" business event hosted by the China Chamber of Commerce late last year, Key said China still held huge economic potential for New Zealand.

"If you were lying in bed at night and you say to yourself, what is going to make the waka go faster? Here's a clue: hundreds of millions of consumers who are getting wealthier and who want to buy the things we produce—and that is called China,” he said.

Politics and business are closely linked in China, and those on the ground say demand for Kiwi products partly depends on how the relationship between the two countries is perceived.

When Hipkins visited in 2023, some business leaders welcomed a favorable newspaper cover featuring his handshake with Xi Jinping. A Chinese employee at a New Zealand travel company said the coverage would help boost sales, which had been weak.

But even on that trip, Hipkins was cautious—declining to call China a “friend” and maintaining the more hawkish stance that began under Ardern.

Wake up and smell the gunships

Earlier this week, when a trio of Chinese war ships sailed through the Tasman Sea between New Zealand and Australia, Defence Minister Judith Collins called it a “wake-up call.”

The drive-by may partly be a response to the two ANZAC ships that sailed through the Taiwan Strait in September last year, and possibly a show of force to Australia, which is beefing up its navy.

The AUKUS submarine deal was designed to deter China from seizing Taiwan and using the island’s strategic location to control shipping routes, thereby creating an unchallenged sphere of influence in East Asia.

Even with an independent foreign policy, this Western posture was always likely to create friction in the New Zealand–China relationship. It’s hard to imagine New Zealand staying neutral in the (highly unlikely) event of a regional war involving Australia.

This has driven Luxon’s push to strengthen trading relationships with Southeast Asian countries, many of which have large, growing populations that are becoming wealthier and more able to buy Kiwi products — much like China.

Meanwhile, New Zealand has also been strengthening its long-standing security alliances with the United States, Australia, and NATO. But this strategy suddenly seems riskier with Donald Trump back in the White House.

The President has proven to be an unreliable ally and is likely to impose tariffs on New Zealand in April. He has already used economic coercion to force Canada and Mexico into border policy changes and wants Ukraine to surrender territory to Russia.

If the United States turns on us, who will we turn to? China has already pitched itself as the more dependable and pro-trade of the two superpowers, even if it is being disingenuous.

Whatever happens next, there will be plenty for Luxon and Xi to discuss when they eventually meet in Beijing.