Ambassador Wu Xi addresses charity gala dinner

The last year has been something of a roller-coaster ride for the relationship between New Zealand and China. Against a background of great power rivalry and geo-political tension, points of difference between the two countries have emerged to test the resilience of the “comprehensive strategic partnership” which was agreed back in November 2014.

Calm down you lot…

In recent days both governments have moved to calm the situation.  Prime Minister Jacinda Ardern said “we place a very high priority on our relationship with China. It’s a significant and complex relationship, but one that brings great benefit to both parties”.  Chinese Ambassador Wu Xi said “as two countries, different in history, culture and social systems, it is only natural for us to have differences. We need to always bear in mind that a defining feature in our relationship is mutual benefit and a win-win outcome”.

“New normal”

Focusing on those mutual benefits is at the heart of the “new normal” in the relationship with China:  despite differences of view, we will continue to look for ways to expand the relationship in areas where it makes sense to do so.  The expression of New Zealand’s independent foreign policy in an inter-dependent world means we need all our friends and partners, but there are some decisions we reserve the right to make for ourselves.  Today’s global environment means we need to fine tune our strategy, spending more time explaining and engaging both at home and abroad and looking harder for areas where we can move forward.

China wants to buy the things we have to sell.

China matters

There can be no doubt that China will continue to matter to New Zealand.   It’s not just that China is a global economic and technological powerhouse, it’s that the scale of Chinese consumption cannot be found elsewhere.  Yes, we need to diversify our markets, and take steps to mitigate risk, as we are doing with the CPTPP partners and the European Union.  But if the number of New Zealand exporters attending the China International Import Exhibition in Shanghai last November is anything to go by, there will be no refocusing away from China in the foreseeable future. China wants to buy the things we have to sell.  It’s good news that Trade Minister Parker will be attending the April Belt and Road Forum in Beijing.

Building relationships with major powers has never been easy, but New Zealand has a lot of experience in doing so.  There will be challenges and occasional setbacks but continuing to move forward step by step is the best strategy.

This post was prepared by Stephen Jacobi, Executive Director of the NZ International Business Forum and the NZ China Council.  It is an abridged version of an article which appeared on the Spinoff on 26 February.  The full article can be read here.