WELLINGTON, New Zealand — New Zealand Prime Minister Chris Hipkins got the red carpet treatment in Beijing last week, when Chinese leader Xi Jinping called the smaller country a “friend and partner.”
New Zealand’s economy may be one-seventy-seventh the size of China’s, but the relationship is important to Beijing, Xi told Hipkins. “It is necessary to continue to see each other as partners rather than adversaries, opportunities rather than threats,” he said in the lavish Great Hall of the People.
It looked like a clear effort by Xi to make sure that New Zealand, often considered the “soft underbelly” of the Five Eyes intelligence sharing partnership, remembers what side its bread is buttered on.
The dairy and meat export economy is overwhelmingly reliant on the Chinese market — but has so far escaped the kind of economic retribution inflicted on the other Five Eyes nations as punishment for political acts.
But New Zealand’s efforts to walk a tightrope between its security partnerships in the west and its economic dependence on China will become increasingly hard to maintain.
That is especially the case as efforts mount to convince it to sign the next phase of the AUKUS alliance, which began as a nuclear-powered submarine deal between Australia, the United Kingdom and the United States, designed to keep China in check.
Beijing has vehemently objected, claiming the United States is attempting to forge new “NATO-like” alliances in Asia.
New Zealand’s two foreign policy principles — “good global citizen; small trading nation” — are an “inadequate compass, morally and strategically” as the rules of international order are being challenged by dominant powers, said Van Jackson, a former Pentagon official who now teaches international relations at Victoria University of Wellington.
Further complicating New Zealand’s calculations: It remains a resolutely nuclear-free nation, and the whiff of uranium around the AUKUS arrangement — even though the second phase, “pillar two,” is about sharing advanced technologies, including artificial intelligence, quantum computing, cyber capabilities and electronic warfare.
The AUKUS question will become increasingly urgent as the other partners step up efforts to get like-minded countries on board in their effort to constrain China’s expansion in the Pacific, and New Zealand heads into a tight general election in October.
Kurt Campbell, the White House’s Indo-Pacific coordinator, encouraged New Zealand to sign “pillar two” of the agreement when he was here in March, a message that Australian Prime Minister Anthony Albanese reiterated during a meeting with Hipkins the following month. They have been at pains to stress to New Zealand that there is no nuclear weapons capability to the submarines.
New Zealand was “willing to explore” the idea of signing pillar two, Defense Minister Andrew Little said at the time.
Any big foreign policy shifts are unlikely ahead of national elections in October.
The main center-right opposition National Party, has not commented publicly on the pact, and leader Christopher Luxon did not respond to a request for comment.
But the prospect of signing any part of AUKUS is causing consternation in Wellington about whether New Zealand’s long-held approach of going it alone on foreign policy, which has its origins in the anti-nuclear movement of the 1980s, is good enough at a time of increasing global tensions.
“New Zealand is part of the regional [Indo-Pacific] architecture. But that’s different from actually having a strategy,” Jackson said.
“Does this foreign policy choice heighten the forces of rivalry? Does it does it heighten a new Cold War or does it lessen those things? Does it increase autonomy for smaller states? Those kinds of questions are not being asked.”
Several former New Zealand political leaders have spoken out strongly against any local involvement in AUKUS, worried about the consequences of becoming entangled in a competition between the two superpowers. And, they’ve expressed concerns about whether the new nuclear-powered submarines could add to instability and nuclear risk in the Indo-Pacific.
“Participation in AUKUS would risk [New Zealand’s] independent foreign policy and potentially its nuclear-free component too,” said Helen Clark, a former prime minister who was one the key political figures involved in developing New Zealand’s ban on nuclear-armed warships in the 1980s. “It could also have adverse economic implications,” she said.
The nuclear issue has been downplayed by U.S. and Australian officials, who say the highly enriched uranium that powers the submarines will be locked away and can’t be converted into weapons.
Even so, Wellington has confirmed its ban on nuclear powered vessels would prevent port visits by the submarines. Australia is New Zealand’s only formal military ally.
New Zealand’s history on nuclear disarmament dates back to the 1970s, when the government dispatched a frigate to the Pacific to protest French nuclear testing. (Then-Prime Minister Norman Kirk told the crew their role was to “bring alive the conscience of the world.”)
Wellington’s refusal to allow port calls by nuclear-armed warships led Washington to withdraw its security guarantees under a post-World War II treaty known as ANZUS in 1986; a rift that lasted 30 years. (At the time, Clark said: “It feels good that you are in control of your own affairs and that they are not prescribed from a foreign capital.”)
The legacy of that decision is a latent anti-Americanism that underpins Wellington’s skepticism toward forging any new military deals with the United States, although the countries remain relatively close.
“There’s a little bit of the ‘ghost of ANZUS disputes past’ that haunts this,” said David Capie, director of the Center for Strategic Studies at Victoria University. “People feel that a potential deepening of a military relationship with the United States would undermine the so-called independent foreign policy.”
There are signs Wellington is aware of the growing geopolitical risks and is recalculating its own strategic role in the Pacific.
Little said last month small liberal democracies “do not get to avoid the real-life effects of geostrategic competition.”
“New Zealanders must be prepared to equip ourselves with trained defense personnel, assets and materiel, and appropriate international relationships to protect our national security,” the defense minister said in a speech at the Shangri-La Dialogue, an Asian security summit in Singapore.
But economically, New Zealand remains overwhelmingly dependent on China. Since it became the first western country to sign a free trade deal with China in 2008, trade boomed as China’s burgeoning middle classes lapped up New Zealand’s agricultural products and flocked to its tourist spots and universities.
Its exports to China increased by roughly eightfold between 2008 and 2022, with China surpassing Australia as New Zealand’s largest export destination in 2013.
But that moment in 2008 was “atypical” and “certainly not one to base a country’s foreign policy on,” said Nicholas Khoo, an expert on New Zealand-China relations at the University of Otago.
“Unfortunately for us, that era of having your cake and eating it has ended, and therefore we need to make very hard decisions,” Khoo said.
Even amid an increasing recognition of the risks of depending too heavily on China, and the prospect that its authoritarian leadership will use trade as a political tool if New Zealand does something it doesn’t like (such as joining AUKUS), the smaller country has made no progress toward diversification.
Indeed, Hipkins’s first visit to Beijing as prime minister looked like a trade mission, with business leaders representing sectors from dairy and fisheries to education and gyms, all trying to grow their trade with China.
The trade focus of the visit, and Xi’s characterization of New Zealand as a “friend and partner,” underscores that “trade occurs in a strategic context,” Khoo said.
Joining AUKUS could give Wellington “foreign policy insurance,” he said, at a time when Beijing’s strategic relationships globally are under strain.
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