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New Zealand’s Shifting Stance on China

On May 31, 2021, Prime Minister (PM) Ardern and PM Morrison held their first in-person meeting since the COVID-19 pandemic. China was an important topic of discussion, with PM Ardern making some of the strongest statements yet about her country’s stance. She affirmed that New Zealand shares a close position with Australia on Chinese human rights abuses and trade issues, including Chinese actions in the South China Sea, Xinjiang, and Hong Kong.

Following New Zealand’s refusal in April 2021 to expand the remit of the Five Eyes intelligence alliance -- which comprises Australia, Canada, New Zealand, the U.K., and the U.S. -- to also include coordinating the Alliance’s diplomatic messaging on China, this clear statement by PM Ardern will be reassuring to many. New Zealand was not prepared to use the Five Eyes context as a time to speak out about human rights concerns relating to China. New Zealand’s stance had become more inconspicuous at the national level and within various cooperation frameworks, such as the Five Eyes alliance. Given the country’s international reputation as an open and principled country, many have been perplexed by the country’s stance.

Until this joint press conference, the contrast was stark between Australia, experiencing sizable Chinese tariffs on their exports, and New Zealand, upgrading a Free Trade Agreement with China, in January 2021. Australia and New Zealand have traditionally had an aligned and robust security relationship, a further reason why many observers have been increasingly concerned by New Zealand’s silence up to now. However, the statements made by PM Ardern are likely to go a long way in confirming to Australia that New Zealand is firmly in their camp, should New Zealand be forced to pick a side in the ongoing trade and diplomatic dispute between China and Australia. This is particularly clear given Ardern’s reputation for speaking resolutely on these issues. As such, New Zealand’s reputation as a moral leader, particularly on human rights, is in jeopardy. These comments will go some way in reversing that, but it is likely that action by New Zealand will also need to be seen to back up their words and reassure Australia and other allies of its position.

Both Australia and New Zealand are trading nations - their hugely open economies are very reliant on global trade. The two countries also share China as their primary trading partner. How both countries balance this with their future relations with China will be important to follow closely. Given China’s immediate reaction to this news, as well as the current state of relations between China and the U.S., it is likely that China will reciprocate by introducing similar restrictions on Chinese investment in U.S. companies in the near future. There is a discernible pattern of the two nations acting in a retaliatory manner, so U.S. companies should prepare for this potential event.


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