New Zealand Fears Fraying Ties With China, Its Biggest Customer


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WELLINGTON, New Zealand — On Saturday, an Air New Zealand plane bound for Shanghai abruptly turned around in circumstances that remain unclear. Days later, the launch of a much-promoted tourism initiative planned between China and New Zealand was canceled, purportedly because of scheduling issues for Beijing, despite being planned for years.

The incidents have raised concerns that New Zealand is the latest target of Beijing’s scorn, a worrying prospect for a country that relies on China for 15.3 billion New Zealand dollars, or more than $10 billion, of its export trade, the most goods it sends to any country.

New Zealand’s prime minister, Jacinda Ardern, on Wednesday admitted challenges in her country’s relationship with China but denied that those ties were deteriorating. Her remarks came in response to claims by commentators and her political opponents that New Zealand was experiencing retaliation because it had joined other Western nations by taking a tough stance against the Chinese technology company Huawei.

“The perception in Beijing is that New Zealand now has uncharacteristically joined the U.S. in containing China by trying to contain its technology companies — and they are prepared to retaliate,” said David Mahon, a New Zealand businessman who runs the investment management firm Mahon China and has lived in Beijing for 34 years.

He added that longtime suppliers of fresh New Zealand products to China had already faced “non-tariff impediments” at Chinese ports.

Amid the growing tensions, Huawei has begun an advertising campaign in New Zealand in which it appeals to the public over the government’s ban on having it supply technology for the country’s fifth-generation, or 5G, mobile data network.

New Zealand’s largest telecommunications provider announced in November that it would join the ranks of countries blocking the use of Huawei equipment in its 5G rollout, citing intelligence agency advice that it would present “significant national security risks.”

The full-page ads, which started running Wednesday in New Zealand’s two largest newspapers, said that 5G without Huawei was “like rugby without New Zealand,” referring to the country’s domination of the sport internationally.

Analysts suggested the Huawei decision might have prompted the cancellation of the tourism event, as well as Ms. Ardern’s apparent inability to schedule a visit to China, planned since late last year.

The Huawei ban came as a “shock” to Beijing, said Mr. Mahon, the businessman, who added that New Zealand’s reputation as an independent voice on the world stage was being eroded by its alignment with the United States over the ban, as well as its tougher language on China’s actions in the Pacific and South China Sea.

“Either we have changed our view and we want to be much closer to Washington, or this is a series of misadventures, mistakes and misunderstandings,” Mr. Mahon said. “But we need to qualify it soon.”

New Zealand officials have rejected assertions that the government’s relationship with Beijing has cooled.

The New Zealand-China Year of Tourism was due to launch next week at New Zealand’s national museum in Wellington, the capital. Ms. Ardern told the New Zealand news media that she was taking “at face value” China’s explanation that the event had to be canceled because of scheduling issues.

“When I’m given a reason, it is not for me to question that,” she said.

But Charles Finny, a former New Zealand diplomat in Beijing who now advises clients on China for the Wellington-based government relations firm Saunders Unsworth, said the cancellation was “strange” and might “reflect some concerns on the state of the relationship.”

The Auckland, New Zealand, office of the Chinese telecommunications company Huawei, which was barred on national security grounds from supplying technology for New Zealand’s fifth-generation, or 5G, mobile data network.CreditPhil Noble/Reuters

Beijing could, for instance, discourage tourism to New Zealand or squeeze the flow of students to the country’s schools — not to mention throttling the country’s lucrative exports to China.

“I’d be watching very closely over the next months what our tourism numbers are showing and what our international education numbers are showing, and I’d be talking to exporters to see if they’re having any increased problems at the border,” Mr. Finny said.

China is New Zealand’s top export destination and its biggest source of foreign students.

Elizabeth Economy, the director for Asia studies at the Council on Foreign Relations in New York, said by email that many countries had “suffered from Beijing’s propensity to address political and national security conflicts through economic pressure.”

Among them was Norway, which had a six-year economic rift with Beijing over the 2010 decision to award the Nobel Peace Prize to the democracy advocate Liu Xiaobo, who died in 2017.

“Sometimes the pressure is significant, such as reducing the number of Chinese tourists or encouraging boycotts of products or companies,” Ms. Economy said. “Sometimes it is more subtle, such as simply slowing the flow of a country’s exports into China.”

Mr. Mahon said that had already happened, but other analysts warned against “panic.” Rodney Jones, a New Zealand economist who recently returned to Auckland from Beijing after spending 30 years in Asia, said such concerns were “way overwrought.”

“We can overstate the importance of a political relationship,” he said, adding that even though Australia had “spent 2018 in the diplomatic doghouse” with Beijing, “exports to China last year grew.”

Ms. Ardern’s political opponents said the cancellation of the tourism launch was just one sign that the relationship between the two countries was deteriorating.

With regards to the return of the Air New Zealand plane, a spokeswoman for the carrier said in an email that the problem related to “a particular aircraft which is not yet certified to operate to China but was unfortunately assigned to operate” that evening’s route.

Air New Zealand would not explain how the error happened, and in Parliament on Thursday, Foreign Minister Winston Peters, said the airline had made the decision to turn back on its own rather than returning on the insistence of Chinese officials, as had earlier been reported. The airline did not immediately clarify who was responsible for the decision.

Ms. Economy said that for China, such an administrative issue could have been “a convenient opportunity to pile on to the other warnings Beijing is giving New Zealand around its Huawei ban.”

“Certainly Shanghai airport control could have allowed the airplane to land with a stiff warning,” she said.

Complicating matters was an announcement by the New Zealand Police on Wednesday that they had completed an investigation into the harassment of Anne-Marie Brady, a professor at the University of Canterbury in Christchurch who studies China’s network of influence in New Zealand. The yearlong inquiry, which also involved Interpol and New Zealand’s spy agency, failed to determine who broke into Professor Brady’s home and office, tampered with her car or made threatening phone calls.

Professor Brady said in September that the thief or thieves at her home had ignored valuables in plain sight but stolen a “cheap” cellphone she had used in China and an “old, broken” laptop on which she had written a much-publicized paper on China’s influence.

Professor Brady said she had been the target of a sustained harassment campaign by agents of Beijing. Two months ago, more than 160 China watchers signed an open letter urging the New Zealand government to protect her.

In an email on Wednesday, she said it was “disappointing but not unexpected” that the culprit had not been identified.


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