Wang Yi’s visit to New Zealand perfectly timed

Timing is everything. And from China’s perspective, this week’s visit by its Foreign Minister to New Zealand could be coming at just the right moment. The visit by Wang Yi to Wellington will be his first since 2017.

Anniversaries are important to Beijing. It is more than just a happy coincidence that it’s the 10th anniversary year of the signing of a Comprehensive Strategic Partnership between China and NZ.

That agreement, signed during a visit to Wellington by President Xi Jinping in November 2014, marked the start of glory days for bilateral trade. NZ’s exports to China have roughly doubled in value since Xi’s visit. They now stand at nearly $21 billion annually. Imports are not far behind, but there is still a trade surplus of some $3b in New Zealand’s favour.

Indeed, China has been NZ’s biggest two-way trading partner since 2017. A consistent flow of agricultural exports to China — especially milk powder and meat — helped to keep NZ afloat during Covid while both countries’ borders were closed.

But Kiwi exports to China fell last year for the first time (except for Covid-affected 2020) since the 2014 pact was signed. Goods took a particular tumble, falling $1.7b from 2022 levels in the year to the end of 2023. Only a post-Covid recovery in services exports, driven by travel, was able to mask a greater fall. But it was not enough to prevent a $500 million drop overall.

The removal of China’s last remaining tariffs on New Zealand dairy products at the start of 2024 may provide some hope for improvement this year.

But forecasts for China’s economy are mixed and a bumpy post-pandemic recovery seems likely. After an expansion of 5.2 per cent in 2023, the International Monetary Fund (IMF) predicts China’s economy will grow by only 4.6 per cent this year and 4.1 per cent in 2025.

Given its food-focused exports, NZ is particularly vulnerable to sluggish Chinese economic growth. Tourism is also affected: Visitor numbers from China for November 2023 were just 52 per cent of those seen during the same month four years earlier, before Covid-19.

Wang Yi’s visit cannot solve these wider problems. But it will put Kiwis’ crucial links with China in the spotlight.

The trip could set the stage for an anniversary year visit by Xi Jinping later in 2024. But that will be highly dependent on NZ’s next steps in relation to Aukus.

It can be taken as read that Wang will have strong words for Winston Peters, his New Zealand counterpart, about Wellington’s apparent enthusiasm to entertain joining “Pillar II” of the new pact.

The tea leaves are still being read after Labour’s Government made way for the centre-right coalition led by National.

A joint statement issued by Australia and NZ after their foreign and defence ministers met last month claimed Aukus was making “a positive contribution toward maintaining peace, security and prosperity in the Indo-Pacific”.

Reaction from the Chinese Embassy in Wellington was typically furious. In an apparent reference to another part of the joint statement which expressed “grave concerns about human rights violations in Xinjiang”, it said “groundless accusations have been made on China’s internal affairs”.

On Aukus, the Embassy said the pact ran counter to “the common interests of regional countries pursuing peace, stability and common security”.

Earlier, NZ’s new Government had sought to move swiftly on Aukus.

In December, Defence Minister Judith Collins said a failure to join Aukus in some form was “a real opportunity lost by the previous Government”. Prime Minister Christopher Luxon appeared to back her, saying, “we’re interested in exploring Pillar II, particularly in Aukus, and the new technologies and the opportunities that may mean for New Zealand”.

Meanwhile, Winston Peters called for greater NZ-US co-operation in the Pacific, saying “we will not achieve our shared ambitions if we allow time to drift”.

But the Aukus tide may be turning. Bonnie Jenkins, the US Under Secretary for Arms Control and International Security, visited early this month and said: “We’re still in the process of having discussions about additional partners.”

Speech notes for an address to be given by Jenkins also seemed restrained.

The lack of a concrete Aukus membership offer is not a new argument. Last May, New Zealand’s then Labour Prime Minister Chris Hipkins called the idea of joining “purely hypothetical”.

However, gradual shifts in language since then — culminating with Luxon’s comments in December — had suggested that a more specific proposal was afoot.

A looming US election was also a logical reason for NZ to act on Aukus sooner rather than later. But perhaps a new Government in Wellington might have been getting ahead of itself.

Or perhaps a rethink is now going on in Canberra, London and Washington over the merits of asking NZ — or others — to become involved with Aukus at all.

In NZ, opposition to the deal also appears to be gathering intensity. Labour is appearing to back away from its “open to conversations” approach to Aukus that was set by Hipkins during a visit by Anthony Blinken to New Zealand in July.

In February, Phil Twyford, the party’s associate foreign affairs spokesman, described Aukus as an “offensive warfighting alliance against China”. And David Parker, Labour’s main spokesman, said “we’re not convinced we should be positioning China as a foe”.

The same month, high-profile former Labour PM Helen Clark co-wrote an opinion piece in the Herald with Don Brash, a former right-wing rival. The strongly-worded article called on Luxon to “reassert New Zealand’s independent foreign policy by making it clear that we want no part of Aukus”.

Finally, questions are being asked in Australia about the future of the original purpose of Aukus — to give Canberra nuclear-powered submarines — after a US decision to cut production of Virginiaclass submarines in half from 2025.

Adding to the uncertainty is Donald Trump’s presumptive nominee status in the US presidential election campaign. A survey in August found 37 per cent of Aussies thought Canberra should pull out of the wider Anzus alliance if Trump wins in November. Trump’s stance on the Aukus deal remains unknown.

For China’s Wang Yi, the potential wavering over Aukus is an opportunity.

The clock is certainly ticking, but no final decisions have been made.

There is still time for Beijing to make its case to Wellington.

Geoffrey Miller is the Democracy Project’s geopolitical analyst and writes on current New Zealand foreign policy and related geopolitical issues. He has lived in Germany and the Middle East and is a learner of Arabic and Russian. He is currently working on a PhD at the University of Otago on New Zealand’s relations with the Gulf states.