New Zealand wakes belatedly to its China risk

Embattled Chinese technology giant Huawei is on a new commercial offensive in New Zealand, one that playfully conflates the nation’s passion for rugby with telecommunications infrastructure.

“5G without Huawei is like rugby without New Zealand,” one billboard said. Another reads: “New Zealanders wouldn’t accept second or third best on the rugby field, and they shouldn’t have to put up with it when it comes to 5G.”

Last November, New Zealand blocked the use of Huawei equipment and supplies in the roll out its new generation 5G network over national security concerns, one of the first indications that Wellington is taking a harder look at its largest trading partner.

The company is not banned outright in New Zealand, but is under a temporary ban via its local partner Spark, which has been prohibited from deploying Huawei’s technology over spying concerns shared by New Zealand’s “Five Eyes” intelligence-sharing partners, namely the United States, United Kingdom, Australia and Canada.

The Government Communications Security Bureau (GCSB) said last year that it had “established links between the Chinese Ministry of State Security (MSS) and a global campaign of cyber-enabled commercial intellectual property theft.”

“This long-running campaign targeted the intellectual property and commercial data of a number of global managed service providers, some operating in New Zealand,” Andrew Hampton, director general of the GCSB, said.

Concerns over Huawei’s alleged links to China’s ruling Communist Party are now global, but New Zealand’s stance on China is fast shifting, with Huawei’s ban just the latest in a growing list of concerns that have caused ripples in previously calm and mostly trade-centric relations.

Last month, headlines on both sides of The Ditch — the sea that separates Australia and New Zealand – were made after allegations surfaced that a New Zealand academic had been harassed by presumed Chinese agents.

New Zealand scholar and China expert Anne-Marie Brady recently alleged that her office at the University of Canterbury and then her personal residence were broken into by persons acting on behalf of the Chinese government.

Earlier, Chinese officials had appealed to her university as well as New Zealand’s Ministry of Foreign Affairs to stop funding her research, some of which has probed China’s military activities, including revelations that Beijing is building bases on territory that Australia claims in Antarctica. Brady was also the first to reveal that a sitting member of New Zealand’s parliament previously served as a Chinese security agent.

New Zealand’s newfound and rising China concerns are starting to mirror Australia’s. Canberra’s fears have centered on Beijing’s perceived interference in its domestic politics, resulting in new laws that without overtly naming China aim to curb its political influence.

Brady has testified to Australia’s parliament, which was recorded in the official Hansard ledger. Australian journalist Peter Hartcher noted last month that New Zealand had not done the same, though it has since faced strong pressure to do so, including via a 150-strong petition from academics.

Andrew Hastie, chair of the Australian parliament’s security and intelligence committee and noted China hawk, told the reporter that “it appears that she’s a target of interest for the Chinese Communist Party or apparatchiks of the Chinese state as a way of silencing her and intimidating her.”

“It’s very clear that my country’s government wants this story to go away. The Chinese Ministry of State Security operates in our societies unhindered and our governments just watch. It’s happening in Australia, too,” Brady told the Sydney Morning Herald newspaper.

As the controversy spirals, Wellington is now waking to the issue. China’s targeting of Australia-based people of interest has until now been more overt.

In 2017, Chinese academic Chongyi Feng was detained in China and not allowed to board a flight to Australia, where he teaches at the University of Technology Sydney. Feng holds permanent residency in Australia but is not a citizen, meaning Canberra was limited in what it could do.

Unrelated but threatening moves have worried politicians, journalists and academics in Australia, with allegations and instances of spying, bribery, political donations, academic interference and pro-Beijing propaganda placements in Chinese language Australian newspapers.

While some claims have bordered on hysteria, others have been proved and grounded in fact. To be sure, New Zealand’s view of China has not been as tortured as in Australia, which has relied on Chinese demand and investment to keep its recession-proof economy afloat even as it balances ties with its close ally the US.

But China is also New Zealand’s largest trade partner. New Zealand’s exports of all goods and services to China were worth NZ$16.6 billion (US$11.8 billion) for the year ended September 2018, $2.6 billion (US$1.8 billion) more than Australia and almost double New Zealand’s sales to the US, a government website says.

New Zealand is not confronted with the same trade-versus-security dilemma as Australia, but recent Chinese moves in its backyard have clearly made Wellington uncomfortable. It’s view of China as a “strategic partner” is also changing, as Beijing increasingly challenges the “rules-based order” in global affairs New Zealand holds dear.

New Zealand Prime Minister Jacinda Ardern’s left-leaning Labour government has started to raise those concerns, analysts note. Those were seen in a Strategic Defense Policy statement issued last year, the first by New Zealand to raise Chinese expansionism in the South China Sea.

“[New Zealand] is navigating a more complex world” and will “face challenges not previously seen in our neighborhood… [its] security outlook may be shaped most powerfully by a combination of forces putting pressure on the international rules-based order which will play out in newly potent ways close to home.”

China “seeks to restore claimed historical levels of influence … [and] some actions in pursuit of these aims challenge the existing order.” “It has expanded its military and coast guard presence in disputed areas of maritime Asia. It has determined not to engage with an international tribunal ruling on the status of sovereignty claims,” the paper said.

In July, New Zealand announced it would spend NZ$2.35 billion (US$1.67 billion) on four Boeing P-8A Poseidon submarine-hunting maritime patrol aircraft that would offer more interoperability with the US and Australia in naval exercises.

Winston Peters, acting foreign minister with the minority New Zealand First party, traveled to Washington last December to seek US support and help in the Pacific, New Zealand’s backyard and a part of the world that feels significantly less safe for a small but independent nation than it did even two years ago.

“New Zealand is a small but well-functioning democracy located at the bottom of the world,” he said in an address. “While New Zealand and the United States work together on a range of global issues, our cooperation and like-mindedness is now coming into sharper relief in the Asia Pacific where the region is becoming more contested and its security is ever more fragile.”

In recent months, analysts and academics have noticed a perceptible shift away from China. “I can’t recall in recent years a more substantial and consolidated New Zealand official view of the behaviors that China is exhibiting in the South China Sea,” professor Robert Ayson of Victoria University told Asia Times.

“Jacinda Ardern’s coalition government has brought with it generally higher levels of concern about some of China’s goals and actions in the wider Asia-Pacific region and an increased willingness to put these concerns on the public record.”

“China’s more worrying behavior and the arrival of a more concerned government has meant that those parts of New Zealand’s official community which have been concerned about China have had a more receptive audience in Cabinet for their views.”

“It’s no coincidence that these stronger indications of skepticism and concern about China have come when Winston Peters is foreign minister and his [New Zealand] First colleague Ron Mark is Defense Minister,” he said via email, pointing out the minority leader’s nationalist and more traditional realist credentials compared with the left-leaning and inclusive Ardern.

But Ardern may also take a more traditional view that China can still be a part of rules-based-order, including in regard to climate change mitigation efforts. The basis for that is a “comprehensive strategic partnership” signed under former prime minister John Key and President Xi Jinping.

David Capie, a professor at the University of Wellington, told Asia Times that “those actions [of China’s] threaten New Zealand’s interests, so it’s not surprising that there would be a shift in policy. I’m sure it is a welcomed by our closest partners, but this is a New Zealand decision.”

There is speculation that Wellington has been pushed into a harder line vis-à-vis Beijing by both Canberra and Washington and that the Labour government — despite being far more left-leaning than the previous center-right Key government — was correcting a perceived laxity on China by its predecessors.

“It sometimes takes the election of a new government for officials to be able to take a look at policy settings and to work out if they need adjusting,” Capie said. “I think that’s what’s happened to New Zealand.”

Still, Wellington must keep intact its crucial economic ties with China, even as it changes the way it looks at Beijing’s place in the world and region. Chinese Premier Li Keqiang met with Ardern on the sidelines of the East Asia Summit in November, where the two leaders discussed upgrading their ten-year-old free trade agreement (FTA), according to Chinese media.

New Zealand has also signed on to the China-led Regional Comprehensive Economic Partnership trade pact. At the same time, domestic anti-China tensions have flared with Chinese buyers often blamed for inflating property prices. That backlash has recently motivated foreign property ownership law changes.

Adding to the economic drama, a plane bound for Shanghai to promote China-New Zealand tourism under the “Land of the Long White Cloud” promotion campaign was recently inexplicably turned back. The campaign aims to lure more Chinese to New Zealand, especially to lesser visited areas.

Much of New Zealand’s trade with China centers on dairy and agricultural exports, with the Chinese keen for goods and foods they see as clean, safe and high-quality. New Zealand has been using that clean image as a drawcard for tourism promotions. One entrepreneur even started selling bottled New Zealand air to China, with each bottle enough for 180 breaths.

“I wouldn’t overstate the shift that’s taken place. The government has expressed a desire to keep working with China and sees it as an especially important partner on issues like climate change and trade,” Capie said.

But the harassment of New Zealand nationals who reveal China’s hidden moves in the region and a block on Huawei’s involvement in its telecom infrastructure development shows the relationship is shifting from what was once a friendly, warm and trusted place.