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.
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