Ex-NZ Prime Ministers Sir John Key and Helen Clark push back on China critics

Former Prime Minister John Key speaks at the annual China Business Summit China Business Summit presented by NZINC and Auckland Business Chamber 03 May 2021 picture supplied

Former Prime Ministers Sir John Key and Helen Clark have pushed back against anti-China rhetoric coming out of Australia and the UK, at the China Business Summit in Auckland.

Last month Foreign Minister Nanaia Mahuta provoked a strong reaction in the UK and Australia when she said New Zealand was uncomfortable using the Five Eyes intelligence network (Australia, Canada, NZ, US and UK) for messaging around human rights and China.

Speaking at the Summit - presented by NZ INC and the Auckland Chamber of Commerce - Key said the world's stance on China had "hardened, deteriorated and worsened" and cautioned New Zealand not to blindly follow that path.

Clark described commentary out of Australia and UK, which suggested New Zealand had turned its back on its traditional partners - as an "uninformed" and "a slur".

Clark noted that the Five Eyes partnership (with US, Australia, UK and Canada) was designed solely as an "under the radar intelligence sharing cooperative."

"In fact when I was Prime Minister it's existence was never actually openly acknowledged."

Any expectation that it came with an obligation to formulate a co-ordinated foreign policy position was a "huge leap" and would be "a significant infringement of New Zealand's sovereignty."

Earlier at the summit, Prime Minister Jacinda Ardern reiterated that New Zealand's position on foreign policy would remain independent and consistent but that we would continue to raise issues.

"We need to acknowledge that there are some things on which China and New Zealand do not, cannot, and will not agree," Ardern said, echoing comments earlier made by Mahuta.

"We have commented publicly about our grave concerns regarding the human rights situation of Uighurs in Xinjiang," Ardern said.

"I have raised these concerns with senior Chinese leaders on a number of occasions, including with the Guangdong party secretary in September 2018, and then with China's leaders when I visited in 2019.

"It's not that we will have differences, it is how we navigate them that will define the relationship," Ardern said.

PM Jacinda Ardern with Foreign Affairs Minister Nanaia Mahuta. Photo / File

Key questioned whether New Zealand should be "blindly" following the direction of Australian and US foreign policy.

"By any objective measure, if you sit back today and look at the global position on China, you would say that it has hardened, deteriorated and worsened."

A large part of that was due to the politics of Donald Trump and the United States, he said

"Trump wanted to measure his relationship to with other countries via trade... he wanted a bogeyman he could hold up as to why things were wrong and [why] for his voters in the flyover states life wasn't as good," Key said.

"So his argument was: 'China didn't play fairly and I'm going to change that'. He actually never did change things and from a trade perspective things actually got worse."

But that anti-China narrative had taken hold globally and was back drop for foreign affairs briefings that would be being produced in Wellington, he said.

Ultimately we would have much more success raising issues we were concerned about with China if our relationship was strong and friendly, he said.

The reality was that China was likely to become more important to New Zealand in the future, not less, because the economy was going to continue to grow rapidly.

Economist Rodney Jones of Wigram Capital followed with a warning to businesses not to get to caught up in high level foreign policy issues.

"Businesses trade, not countries," Jones said.

He noted that even though Australian wine and barley exports had been hit by Chinese trade sanctions, Australia as a whole had lifted its percentage of exports to China more than New Zealand in the past year.

Responding to questions about New Zealand's over reliance on China as an export market he said he didn't necessarily see diversification away from China as crucial for New Zealand.

The economic opportunity there remained strong, said Jones, who has covered the Chinese economy since 1991 and spent many years based in Beijing.

For the first time since 2009 it China appeared was under-reporting its GDP growth story rather than inflating it, he said.

Official figures suggest that annual GDP growth was 6.5 per cent.

But Wigram estimates that GDP is actually now back at an annual rate of at least 10 per cent.

Jones has previously been bearish on China's economy based on debt risks.

But he said the regime there had focused on financial stability since 2017 and now appeared to have that part of the economy under control.

Meanwhile investment in new capital was growing at a record rate as China looked inward and expanded its domestic manufacturing capacity.

Speaking after Ardern, China's ambassador to New Zealand Wu Xi told the summit that Xinjiang and Hong Kong issues were China's internal issues.

Talk of "so-called forced labour or genocide are totally lies" and were fabricated by outside forces to destabilise China's progress.

She said China remained committed to a green, open economy and to multilateral trade and globalisation.