Chinese business legend and Alibaba founder Jack Ma used his address at a Chinese Entrepreneurs Club business luncheon for John Key this week to make a considered point.

"Trade is a freedom it should not be used by government as a weapon," said Ma, who went on to make some deliberately opaque comments about war and peace.

The comments probably flew under the radar for many in the room.

But in essence he was making an oblique point that China's leadership should not resort to making indirect threats to clamp down on trade simply because other nations want to discuss the South China Sea issue.


Key's sixth visit to China has been characterised by an extraordinary amount of posturing - including the intriguing sideline comment by Ma, one of China's (and the world's) most powerful businessmen, at Monday's luncheon in Beijing.

Prime Minister John Key hands an All Black jersey to Alibaba founder Jack Ma during a trade meeting in Beijing. Photo / Supplied
Prime Minister John Key hands an All Black jersey to Alibaba founder Jack Ma during a trade meeting in Beijing. Photo / Supplied

Even before Key landed in China - after a trip taking some 18 hours - Beijing's top leadership was sending a public message.

Key had signalled he wanted to leave Beijing with an agreement to upgrade the 2008 China New Zealand free trade agreement where NZ has lost its first mover advantage in critical sectors like dairy after Australia got its own China FTA last year.

The Beijing message was to steer clear of talking about territorial disputes in the South China Sea if you want to make traction in the trade talks.

Key has taken a disciplined approach in China.

He held his ground within the private meeting with the premier. But he has not ramped the issue up publicly.

What he has ramped up is a public signal that he is prepared to look at smoothing the way so that up to 60 financial refugees can be sent home to China to face trial for alleged graft and corruption.

There will be a trade-off of course - there always is.

But it won't be presented in such a naked fashion when President Xi Jinping agrees to move ahead with progress on an upgrade of the bilateral free trade deal between China and New Zealand. This was expected to be confirmed by him after Key's meeting with the president at the Diaoyutai State Guesthouse today.

Li has also telegraphed a message of his own through China Daily which featured a front page article today which said China and New Zealand had agreed to increase agricultural cooperation and upgrade their FTA and further cut tariffs and boost exchanges.

Key's on-record comments to New Zealand media about the extradition issue will have been keenly read by Beijing. Effectively, the Prime Minister was telegraphing that he was prepared to stand up to domestic criticism by saying he would look at considering an extradition treaty with China.

That also provided the opening for the president's officials - who would already have been coordinating all the feedback from the Li meeting and other high-level discussions between Trade Minister Todd McClay and Primary Industries Minister Nathan Guy and their counterparts - to decide the territory they would be prepared to concede to Key in an official communication.

It is possible that what finally emerges will be a "work around" - a deal that contains a caveat that no-one sent back to China will face the death penalty if convicted.

But it would be fatuous to believe that Key would be prepared to risk domestic criticism over any potential "extradition treaty" unless New Zealand also got something it wanted in its national interest.

The Prime Minister has been relentlessly been on message during his crucial two days in China's capital.

The Alibaba founder was also on message.

Ma was marginally offside with Beijing a year or so back after he made some frank comments about the 1989 events (the time of the Tiananmen Square uprising).

Other Chinese billionaire friends are said to have deferred a hunting trip to New Zealand because they were concerned he could be a liability at that time.

At Monday's luncheon his signal to China's leadership was noted.

Other Chinese entrepreneurs would admire his daring.

But they would not fundamentally disagree with this thesis that open trading doors are essentially for nations to flourish.
And for them.

It is afterall open trade that helps to precondition nations towards peace.

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