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If you thought the question of New Zealand joining Aukus was just a parlour game for foreign policy wonks then China has news for you. This is a fight club China definitely does not want New Zealand to join. The Chinese ambassador to New Zealand, Wang Xiaolong, laid it out for me in the RNZ interview show 30 With Guyon Espiner.
He told me that if New Zealand joined Aukus it could shatter trust between the two countries. “Trust is one of the most precious, but also at the same time, probably one of most fragile commodities. It may take years to build up, it just might take seconds to be destroyed.”
I asked the ambassador directly whether there would be economic consequences if New Zealand joined the Aukus club. “Inevitably, that will have a negative impact on the relationship,” he said, adding that “New Zealand enjoys a very positive national branding” with Chinese consumers which would also be threatened.
Now, the “play both sides” and play carefully routine is not new. New Zealand has got used to being the small kid in the playground, getting its lunch money from China and relying on the US for muscle in case the bullies come calling.
The extent to which Aukus could derail this delicate dance is now stark.
While no decisions have been made, New Zealand has struck a cautious but positive tone about joining Pillar 2 of Aukus, the non-nuclear, military technology-sharing agreement.
In a joint declaration with US Secretary of State Antony Blinken in Washington DC in April, Foreign Minister Winston Peters said that there were “powerful reasons for New Zealand engaging practically” with Aukus.
New Zealand has taken refuge in the idea that this is a non-nuclear agreement, lying below the Pillar 1 deal, which provides Australia with conventionally armed, nuclear-powered submarines. But China does not believe Aukus can be conveniently separated into two distinct pieces.
Firstly, it sees Aukus as a breach of the nuclear non-proliferation regime.
“Aukus entails the transfer of weapons-grade nuclear materials from a nuclear weapon state to a non-nuclear weapon state for the first time in history,” Dr. Wang told me. “If that is allowed to happen, it will raise serious questions about the integrity of the non-proliferation treaty regime.”
Now, that is contestable at least. Paragraph 14 of the 1968 Nuclear Non-Proliferation Treaty allows a state to exempt nuclear material from inspection by the International Atomic Energy Agency if it can only be used for non-military purposes, such as naval propulsion.
Yes, there are concerns that using this loophole will see others use it for the clandestine transfer of nuclear material destined for use in weapons. Legal and geopolitical experts can debate that, but the key point is that China sees Aukus as an alliance specifically aimed to constrain the rise of China.
Wang told me that Aukus was a product of “zero-sum Cold War mentality” and warned it could “lead almost inevitably to greater divisiveness, confrontation or even conflict and war”.
New Zealand is walking into a hall of mirrors as it makes its call on Aukus.
Thanks to the free trade agreement signed in 2008, China has become our largest trading partner, with New Zealand exporting more than $20 billion worth of goods into the market in 2023.
Do we risk the FTA with China for a military alliance with the US (which has always refused to grant a trade agreement with New Zealand)?
It’s a fiendishly difficult question, made more so by the topsy-turvy world we find ourselves in.
China sees itself as the champion of free trade. “We do and we have benefited from an open economy characterised by liberalisation,” according to Wang.
It is now the US which opposes free trade. Trump is promising tariffs on all imports, with China singled out for special treatment (he’s suggested tariff rates of 60% for China). Wang says it’s “a reversal of roles” as China had, in the past, been lectured by the West on the benefits of free trade and had “tried to be a good student”.
Adding to the awkwardness is the fact that the Foreign Minister Winston Peters was a chief opponent of the China-NZ FTA. Peters opposed the China FTA even though he was Foreign Minister when it was signed.
Phil Goff was Minister of Foreign Affairs and Trade in the first two terms of Helen Clark’s Labour government. But after the 2005 election, Clark’s deal with New Zealand First split the roles, largely because of Peters’ opposition to the FTA. Goff took trade and Peters took foreign affairs.
“When Winston Peters was appointed Foreign Minister it was on the clear understanding that there would be a demarcation between his duties here and trade policies,” Clark said, under questioning about the FTA in 2008.
Two decades on and Peters is Foreign Minister again. Now he has to balance his instincts for moving New Zealand closer to the US without derailing the China FTA he vigorously opposed.
Aukus just became very awkward indeed.
Guyon Espiner is an investigative journalist and presenter at RNZ, who hosts TV and radio interview show 30 with Guyon Espiner. He writes a fortnightly column for listener.co.nz
