COMMENT:

Jacinda Ardern's top-level meetings in Beijing will finally put to bed speculation that an unbridgeable gulf has opened between New Zealand and China since she became Prime Minister.

Officials are right to suggest that this visit is a "big deal".

The Chinese Government — as Ambassador Wu Xi foreshadows today in exclusive comment for the Herald — expects the Ardern visit to inject "new impetus" into the development of the comprehensive strategic partnership between China and New Zealand.

Advertisement

It will also, says Wu, result in a further push to the negotiations on the upgrade of the China-New Zealand free trade agreement which has already gone through six rounds of talks resulting in "considerable progress".

"We hope the two teams will step up their efforts and reach consensus at an early date," Wu says.

But China also expects to deliver a pointed message on Huawei — that the Chinese company observes the laws and regulations of New Zealand as well as international rules.

"There is no evidence to prove that Huawei poses a threat to New Zealand," adds Wu.

Since the coalition took power in late 2017, the dynamics in the bilateral relationship have changed.

The coalition has made it clear it is not business as usual as far as China is concerned.
Several strategic steps illustrate that point.

First, the Pacific Reset, which has seen New Zealand increase investment in the Pacific to result in a more balanced environment.

Second, Foreign Minister Winston Peters' decision to introduce more time for reflection on New Zealand's participation in President Xi Jinping's prized Belt and Road Initiative.

Advertisement

Third, a new defence strategy, which singles out China.

Then there are the national security-related stances taken by the Government Communications Security Bureau to turn down Spark's application for Huawei, the Chinese telco giant, to take part in its moves to 5G, and singling out China for state-sponsored hacking (in concert with other Five Eyes nations).

This is the first time a New Zealand Prime Minister has made an official visit to China in the three years since former PM Sir John Key led a delegation to Beijing, Shanghai and Xi'an in April 2016.

Former National PM Sir Bill English went to Hong Kong, but not to the Chinese mainland, in his truncated time at the top.

In her pre-visit media calls, Ardern has stressed she has met both President Xi Jinping and Premier Li Keqiang on the international circuit at events such as the 2017 Apec meetings.

But it is the official visits that set the bilateral agenda.

In particular, Monday's working meeting between Li and Ardern will provide an opportunity for both sides to step up the machinery of government and get stuff done.

Ardern has played down expectations of hard and fast timelines being set to finalise the FTA upgrade. Trade Minister David Parker confirms that the push from the dairy sector to get an easement on the safeguards in the bilateral FTA, which kick in when certain export volumes of NZ milk powder into China are exceeded, has been abandoned. Tariffs on NZ milk powder go to zero between 2022-2024 and New Zealand is applying its negotiating coin to get more access for services, e-commerce and digital trade.

The bilateral trade between China and New Zealand now exceeds $30 billion — a triple increase since the signing of the FTA in 2008. That milestone has been reached ahead of the target of 2020 which was set by the leaders a few years ago.

The Year of Tourism launch, which will finally happen in Wellington today, will add impetus to bilateral tourism.

When it comes to the niggles in the relationship, Ardern expects to make the point on Huawei that New Zealand's telecommunications legislation is "deliberately neutral".

And that the GCSB is at arm's length from the Government — something that China's leaders may find difficult to swallow given the concentration of governmental and security power at the top and New Zealand's membership of Five Eyes.

Ardern had earlier planned to take a top-level business delegation with her to China. She would have gone to the prestigious Boao Forum on Hainan Island — known as China's Davos. Her hand-picked delegation would have gone to Shanghai, Beijing and Singapore.

The visit was expected to include CEOs from her Business Advisory Council such as Air NZ's Christopher Luxon (who chairs the council), Westpac's David McLean, Fonterra's Miles Hurrell, and McKinsey and Company's Andrew Grant, as well as prominent CEOs like Mainfreight's Don Braid.

The terrorist attack changed that plan.

Some business leaders will now join Parker on his mission to China in late April in advance of the BRI forum in Beijing to lend support to the minister.