Warning NZ's reliance on trade with China unhealthy

It’s 50 years since diplomatic ties were formalised between China and New Zealand - a relationship now worth about $38 billion in two-way trade.

The relationship was formed on 22 December 1972 and a few months later New Zealand's first ministerial mission was off to China.

Former diplomat Chris Elder was part of the delegation and worked in the first embassy in Beijing.

No one in the group had been to China before and Elder remembers being struck by the ideological fervour and the poverty.

"There were no cars, no privately owned cars even in Peking. Most of the transport was either by bicycles or by donkeys or sometimes there were still camel trains still coming into the centre of town," said Elder.

In 1971, the United Nations voted to expel Taiwan and recognised the People’s Republic of China as the official government.

That proved a turning point for New Zealand and the following year the then Labour Prime Minister Norman Kirk decided to establish ties.

“It was a bit ridiculous to bury our heads in the sand and pretend a country with a fifth of the population of the world didn't exist,” said Elder.

The initial motivation for forming ties with China was political, but gradually it became more about trade.

In 2008, New Zealand became the first developed country to sign a free trade agreement with the economic giant.

Now about 30% of New Zealand's overall export goods go to China.

"At the time, the 2008 FTA was regarded as quite an achievement but now it's actually one of the risks in the relationship because we've actually got into a very unhealthy economic dependency with China," said Anne-Marie Brady a China academic at Canterbury University.

For Māori export goods, 48% are sent to China, which Professor Brady described as a "dangerously high trade dependency."

"The concern about trade dependency is what we’ve seen in recent years is that China uses trade a weapon," said Professor Brady.

The other challenge for the relationship is China's foreign policy, especially in the Pacific where it’s been growing its influence.

"China's increasing military and intelligence activities in the Pacific is a direct threat to New Zealand's interest and our Government has stated that," said Professor Brady.

For the diaspora here, the diplomatic relationship has been important.

"Especially when we go to visit China and we get a better knowledge and understand of our heritage and culture," said Jenny Too from the New Zealand Chinese Association.

Half a century of China and New Zealand understanding each other and navigating vastly different world views.


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