Prime Minister Chris Hipkins says New Zealand’s relationship with China will require “careful” management going into the future, in the context of an increasingly complex global environment.
Hipkins made the comments in his keynote speech at the China Business Summit in Auckland on Monday morning.
Late last month, Hipkins and Trade Minister Damien O’Connor led a delegation to China – NZ’s first in a post-covid environment.
China is NZ’s largest trading partner, contributing more than $40 billion to the local economy, with dairy, meat and forestry as the top three export products.
The China Business Summit also comes after the United Kingdom joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in Auckland over the weekend.
In his speech, Hipkins said the visit to China needs to be seen against the government’s commitment to provide exporters with a range of options.
It is an “attractive market”, but the finalisation of free trade agreements (FTAs) with the UK, European Union and the CPTPP all give exporters “more favourable terms of trade than before in a wide range of other, equally significant high-value markets”.
Hipkins said as China’s economic influence has grown, the Chinese government has also become more “assertive” in its foreign policy.
“In its own words, China has ‘stood up’ and is now asserting its interests globally.”
He said that while it is normal for states to pursue their interests and to use all the tools at their disposal to exert influence, China’s rise and how it sought to do that is a major driver of increasing strategic competition.
“Our region is becoming more contested, less predictable, and less secure.”
That poses challenges for small countries, such as NZ, that are reliant on the stability and predictability of international rules for prosperity and security.
“In this increasingly complex global environment, our relationship with China will continue to require careful management.”
NZ has been “firm” and consistent in its commitment to its one-China policy, Hipkins said.
China’s ambassador to NZ, Wang Xiaolong, who was on the PM’s recent trip, said the trip was “productive and fruitful”.
It was well received and covered by media in both countries, which shows the solid foundation of the relationship, he said.
Confidence in the Chinese market has been strong in the first half of 2023, with the second-quarter growth figures expected to be higher than those of the first three months.
NZ and China’s common interests far outweighs differences, he said, with President Xi Jinping always considering NZ a “friend” and “partner”.
While the long-term outlook for China remains unchanged, Xiaolong said the country’s economy could face headwinds both internally and externally.
He pointed to those external headwinds being countries looking to “decouple” themselves and suppress China’s trade.
That was a “very slippery slope” to lower efficiency, Xiaolong said.
Xiaolong said China had decided to apply for membership to the CPTPP because it was well aligned with what it had been doing for many years.
O’Connor said NZ’s relationship with China will require a substantial long-term effort to ensure continued access for exporters.
Australia’s Assistant Trade Minister, Tim Ayres, said China will remain his country’s largest trading partner for some time.
National’s trade spokesperson, Todd McClay, who was trade minister in John Key’s government, said trade has an important part to play so NZ can bring down its debt.
Public trust in trade has been restored with no more protests, and consensus among political parties in parliament.
However, there is work to do to ensure that trust remains so businesses can continue in markets, McClay said.
Over the next five years, work must be completed so the new agreements NZ has signed become operational, he said.