Fence-sitting has got harder

When the going gets tough, it’s hard to sit on the fence. Sorry for the mash-up of cliches, but it’s the best way to describe the increasing difficulty of New Zealand’s relationship with China.

For years New Zealand has prided itself on a belief it can balance perfectly between two larger, opposing forces. Those forces are China and the United States but they are also trade relationships and military relationships. We see our position as both independent and rational, but we may be naive to think we can compartmentalise so easily.

China is our largest trading partner, taking 20.1 per cent of our exports and producing 15.4 per cent of our imports. Our Free Trade Agreement with China, signed in the last days of the Helen Clark Government, is a trade milestone that has been hugely beneficial.

But the relationship has deteriorated over the past year. China-watchers agree that Foreign Minister Winston Peters’ rhetoric about China, starting with the relatively coded ‘‘Pacific reset’’ early in the coalition and developing into a speech in Washington DC in December when he ‘‘unashamedly’’ called for the US to engage more in the Pacific, will have been scrutinised in Beijing. It was concerning that Prime Minister Jacinda Ardern did not read Peters’ speech before he delivered it.

At the same time, the Government Communications Security Bureau linked China to ‘‘a global campaign of cyber-enabled commercial intellectual property theft’’. Security concerns also drove GCSB advice that Huawei should be banned from New Zealand’s rollout of 5G technology.

The US has been telling friends and allies to stay away from Huawei. That led Huawei chairman Eric Xu to accuse the US of using its ‘‘government machine’’ against a small company.

New Zealand is at the far edge of this dispute and we have little choice but to follow the US lead on Huawei, regardless of our independent image. But China has signalled that the relationship has cooled. Ardern’s planned visit to China in 2019 is on hold. A China-New Zealand Year of Tourism event at Te Papa next week was abruptly postponed by China. National leader Simon Bridges was making noises in Parliament this week about five Government ministers who are still waiting on permission to visit China.

Time will tell if simple scheduling issues and bureaucratic tangles are behind these delays or whether there is a strategy that is slowly becoming more visible. Beijing will also have paid attention to the saga of University of Canterbury professor AnneMarie Brady, a China specialist whose house was burgled a year ago. Despite the assumptions by some that China was behind a campaign against Brady, the police investigation was inconclusive. Ardern wisely resisted politicising the Brady story.

A different result would have cooled the ChinaNew Zealand relationship even further. The tension is such that a story about an Air New Zealand flight that was turned back from Shanghai was seized upon as another sign of a worsening relationship. It turned out that paperwork making reference to Taiwan was the issue.

Ardern has at least acknowledged there are ‘‘challenges’’ in our relationship with China. Exporters who depend on China are looking on nervously, conscious that Beijing does not draw such clear distinctions between trade interests and strategic interests as we do.

We see our position as both independent and rational, but we may be naive to think we can compartmentalise so easily.