Analysis-New Zealand, in recession and heading to polls, goes pragmatic on China trade

By Lucy Craymer

WELLINGTON (Reuters) – New Zealand Prime Minister Chris Hipkins trod a careful line on his first trip to China last week as leader, focusing on trade and economic opportunities but avoiding contentious issues such as human rights abuses in Xinjiang or security concerns.

Barely three months out from what looks likely to be a tight election and with the economy already technically in recession, analysts say Hipkins is seeking to step out of the shadow of high-profile former leader Jacinda Ardern and show he is the person to run the country for a further three years.

One angle Hipkins is focusing on is assuring voters that Labour is the party to bring back prosperity – and that means avoiding disputes with the country’s largest trading partner, which could damage New Zealand exports.

“This was a big visit for Hipkins who is cementing his profile as a new prime minister in an election year,” said Robert Ayson, professor of strategic studies at Victoria University.

“Hipkins pulled his punches on anything controversial. We were back, for a moment at least, where New Zealand admits it does not see eye to eye with China on some big matters without actually naming them.”

New Zealand has long been seen as the most conciliatory towards China among the Five Eyes security grouping, which includes Australia, the U.S., Britain and Canada.

But the country’s Foreign Minister Nanaia Mahuta and Ardern in recent meetings with counterparts noted the situation in Xinjiang and the erosion of democracy in Hong Kong, while raising concerns about potential militarisation in the Pacific and tensions in the Taiwan Strait.

The statement after Hipkins’s meeting with Chinese President Xi Jinping mentioned none of these issues.

“(Hipkins’s) visit certainly gave China a tick in the international legitimacy box and Beijing has gained at least as much from Hipkins’ visit as New Zealand exporters,” Victoria University’s Ayson said.

New Zealand exporters were prominent in the visit with a delegation of 29 businesses travelling with the prime minister to China.

Business is not a traditional supporter base of the Labour Party, but Hipkins has been focused on winning this sector over since he took office – his first full day in the job in January he spent talking to business leaders in Auckland.

“My sense is that there’s a significant aspect of domestic politics here in an election year, and that Hipkins wants to be seen as a sort of good steward of the China relationship,” said David Capie, Director of the Centre for Strategic Studies at Victoria University.

The most recent polls from late May put a coalition of opposition parties National and Act ahead of a Labour-Green party coalition. Neither coalition, however, may have a clear majority.

Derek J. Grossman, a senior defence analyst at RAND Corp in the United States said the trade-focused visit is unlikely to have any negative blow back on New Zealand’s relationship with other partners as many countries are aware of the delicate balancing act Wellington is playing.

“In addition, and as the Biden administration has shown with India on its Russia ties, so long as partners agree to cooperate on the Indo-Pacific strategy to counter China, then Washington is willing to tolerate quite a bit of behaviour that does not align with its interests or even values.”

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