Prime Minister’s speech to the China Business Summit

Prime Minister

E ngā mana, e ngā reo, e ngā rau rangatira mā.

Tēnā koutou, tēnā koutou, tēnā koutou katoa.

Thank you, Fran. It is great to be here at the China Business Summit and to see so many people at this rather early hour.

Thank you all for being present.

As you know, this is my first time giving a speech in this forum. What you will hear from me today, however, is a continuation of the position our country has taken for a number of years.

My approach in the international sphere is not that dissimilar to my priorities at home – getting back to basics and dealing with the bread and butter issues in front of us.

In foreign policy terms, it means making sure we have greater economic resilience across our trade markets in a time of global uncertainty.

The longer I’ve been in the role, the more I’ve seen first-hand the enormous benefits of our independent foreign policy, our role as an honest broker, and the importance of our close relationships in enhancing our prosperity and security.

I know that for several years the China Business Summit has provided an important platform for Government, business leaders, and academia.

It’s been an opportunity to share perspectives, discuss the landscape for New Zealand businesses in China, and help navigate a shifting international environment.

Such a platform serves a valuable purpose in an environment of geostrategic competition and the increasing complexity in a rapidly changing world.

Just a year ago both New Zealand’s and China’s borders were closed, as the COVID-19 pandemic wrought global disruption and devastation.

That sort of situation would have been absolutely unimaginable just a few years earlier.

During the pandemic it wasn’t possible to engage face to face, and we suffered for the lack of it.

It’s great to see politicians, officials, business leaders, students and tourists travelling again in both directions. Reconnecting and reengaging with each other.

I’m one of them, and today I‘ll start with reflections on the trade mission I led to China just three weeks ago.

I’ll then discuss the emergence of a stronger and more assertive China, and the principles that guide New Zealand’s management of this important bilateral relationship.

Reconnecting: Economic and People Connections

I want to start with Reconnection.

At the end of last month, I had the privilege of leading to China a delegation of New Zealand’s top businesses and exporters, representatives from our tourism, tech and education sectors, as well as the brilliant Te Matatini champions, Te Whānau-ā-Apanui.

As you will be aware, our Government has made a number of trade missions of this nature in the post-COVID period – to Singapore, Japan, Viet Nam, the United States, and Australia.

Although only in the role a short time, I’ve been focussed on playing my part to strengthen and enhance the range of existing relationships New Zealand holds and to advance our trade opportunities.

This reflects my strong determination, as a trading nation, to continue driving a wide range of offshore opportunities to support our economic recovery and resilience. 

It’s also why our Government has been focused on driving an active FTA agenda to open as many doors as possible for New Zealand exporters and businesses.

It was natural, therefore, that with China’s post-COVID re-opening earlier this year we led a trade mission to New Zealand’s largest offshore market. 

The New Zealand export story to China is well-known. It’s a phenomenal success story propelled by our 2008 Free Trade Agreement that took two-way trade from $8 billion that year, to more than $40 billion today.

Today, our top three exports to China are dairy, meat, and forestry.

But the New Zealand story I witnessed in China a few weeks ago was broader than just containers on ships and commodity-based trade – although that continues to play a valued and fundamental role. 

It was a story of innovation, adaptation and cutting-edge technology. 

I witnessed New Zealand companies working to provide their ground-breaking climate and environmental solutions to drive change in China. 

I saw Kiwi firms focused on delivering high quality, safe and nutritious food for babies and children, and others keen to bring their health and wellness products into one of the world’s largest consumer markets. 

Others were operating entirely in the digital sphere. 

And I was able to speak with Kiwi companies who’ve made significant investments in their China operations, from manufacturing through to Fonterra’s Innovation Centres.

A key focus for me was supporting New Zealand businesses across the board to reconnect with existing partners, after a period in which we truly felt our distance, and to tell their stories.  

And I was able to support our international education and tourism sectors as they welcome back Chinese students and tourists to New Zealand after a tough few years due to COVID. 

I’ll give you a few reflections. The first is that New Zealand has built up sizeable economic interests in China.  That’s an economic reality – one that I don’t need to explain to anyone in this audience today. 

It’s in large part due to the hard work of many of you over the years. 

The second is that it’s the Government’s job, and one I take extremely seriously, to work alongside our businesses and exporters to ensure that this remains an important part of our China conversation – even as we navigate a more complex regional and global landscape. 

Third, the visit to China needs to be seen against my Government’s commitment to provide exporters with a range of options.

China is an attractive market – but the finalisation of Free Trade Agreements with the UK, the EU, and the CPTPP, provide our exporters with more favourable terms of trade than before in a wide range of other, equally significant and high value markets. 

The seven new or upgraded FTAs we’ve signed since 2017 has seen goods covered by a tariff free FTA rise from 52 per cent of exports to almost three quarters. 

 

A complex relationship

I’d like to move now to reflect on New Zealand’s evolving and multifaceted relationship with China, and the implications China’s rise has for us, our region, and globally.

China’s economic growth has brought about a remarkable transformation of its society in the last 40 years.

In this time 800 million people have been lifted out of poverty in China and, as it has been for many countries around the world, China’s rapid growth has also been a driver of New Zealand’s own prosperity. Where they have gained, so have we. 

But the change is not limited to economic growth. As China’s economic influence has grown, the Chinese Government has also become more assertive in its foreign policy.

In its own words, China has ‘stood up’ and is now asserting its interests globally.

It’s normal for states to pursue their interests and to use all the tools at their disposal to exert influence regionally and internationally.

But as I’ve noted recently, China’s rise and how it seeks to exert that influence is also a major driver of the increasing strategic competition, particularly in our wider home region, the Indo-Pacific.

Our region is becoming more contested, less predictable, and less secure.

And that poses challenges for small countries like New Zealand that are reliant on the stability and predictability of international rules for our prosperity and security.

In this increasingly complex global environment, our relationship with China will continue to require careful management.

New Zealand has been firm and consistent in our commitment to our one China policy, and more recently in the implementation of our Comprehensive Strategic Partnership.

My sense from my visit is that the relationship is in good shape, evidenced by the warm reception I received and the range of outcomes achieved during my visit.

In engaging with China’s leadership, I made the point that in this relationship we will continue to talk candidly, but respectfully, about issues on which we differ. The same way in which we would with any other country.

And as I have noted, face-to-face engagement is a critical part of New Zealand’s diplomacy. In this complex global environment, dialogue and engagement are more important than ever.

My Government has been busy in this regard. In addition to my own meetings with Chinese leadership in Beijing last month, Foreign Minister Mahuta travelled to China to meet with her counterpart Foreign Minister Qin Gang in March.

And there have been meetings between our Defence, Trade, Agriculture, Forestry, Science and Tourism Ministers.

Underpinning this high-level engagement are also a range of senior officials’ dialogues which provide an important platform for regular exchanges on a range of topics.

The conversations are not always easy, but they are essential.

And, looking forward, it is important that we continue to engage with China – to listen and to build dialogue, to pursue New Zealand’s interests, and to add our distinctive identity and voice where it matters.

In this context there are three key principles that will continue to guide our relationship with China.

We will continue to engage with China and cooperate in areas where our interests converge.

Two, we will always act to preserve, protect, and promote our national interests and our values.

And, three, we will work with partners to advocate for approaches that reflect our interests and values.

And across all areas, we will engage with China consistently, predictably, and respectfully.

Principle 1: Engagement and cooperation in areas of common interest

On Principle 1, New Zealand, as I have said, will always maintain an independent foreign policy guided by a clear focus on our essential and enduring interests, and the values we stand for.

This means we will place a high value on engagement and dialogue with China.

We will also look to cooperate with China in areas where it is in our interests to do so including, for example, on trade and economic issues and working together to tackle critical global issues such as climate change and environmental protection.

We can never forget that New Zealand is a small and open country whose prosperity is inherently tied to trade.

China is a vital and significant trading partner, with a market of 1.4 billion consumers that buys around 20 billion dollars’ worth of New Zealand’s goods every year.

It’s also currently New Zealand’s 3rd largest market by value for services exports – worth 1.2 billion per annum.

At the same time, I’m aware that market concentration can bring risk.

We improve resilience when our businesses have access to a wide range of markets, and the New Zealand Government has continued to work hard on this, alongside our businesses.

Other areas of bilateral cooperation include environmental protection and climate change.  On these, we have a range of dialogues, including on green finance and forestry and emissions trading schemes, as well as a regular Ministerial dialogue.

One outcome from my visit was an agreement to step up policy engagement on e-vehicles, with China an important supply market for New Zealand consumers as we look to make the transition to a low carbon economy. 

I also heard first hand from businesses that sustainability credentials and environmentally friendly products are driving customer sentiment at great pace in the Chinese market.

We’ve also valued China’s leadership in presiding over the adoption of the Kunming-Montreal Global Biodiversity Framework, which sets new global goals and targets to halt and reverse biodiversity loss by 2030. 

Principle 2: Act to preserve, protect, and promote our interests

And yet we must also remember that New Zealand and China have different histories, geographies, political systems and cultures. It’s therefore to be expected that we also have different perspectives and approaches on a range of issues.

Which brings me to Principle 2.

As I’ve said, New Zealand will always be consistent, predictable, and respectful in addressing our  differences.

But make no mistake. We’ll always act to preserve, promote, and protect our interests where these are being challenged – whether nationally, regionally, or globally.

As a small country, we see the rules-based international order based around key institutions like the United Nations and the WTO as critical to our interests.

Both New Zealand and China have benefited greatly from the global rules and norms which have underpinned our security and prosperity for decades.

But this system is increasingly under threat.

Russia’s illegal war in Ukraine, in breach of fundamental tenets of the UN Charter, is a key example of this concerning trend.

And so we look to China to play a constructive role, reflecting its growing influence.

China is, for example, an important global player on climate change – both as a major emitter and because China is crucial to global and national solutions.

This is true, too, for the role China must play in achieving nuclear disarmament.

As a permanent member of the United Nations Security Council, China also has special responsibilities.

That’s why we’ve encouraged China, consistent with its commitment to the UN Charter, to use its access and influence to urge Russia to abide by its international obligations.

For Russia to cease military operations in Ukraine, to withdraw its troops, and return to diplomatic negotiations as a pathway to resolve this conflict.

And we will continue to advocate this position at every level of China’s leadership – because it is an issue important to our values as a sovereign nation.

New Zealand also has a deep interest in a peaceful and stable Indo-Pacific region. As a trade-dependent nation, with nearly half our trade passing through the South China Sea, continued unimpeded access to shipping and air routes is vital.

As I have said recently, New Zealand is concerned about a worsening strategic environment and rising tensions in the Indo-Pacific region, in particular in places like the South China Sea and Taiwan Strait.

We have direct interests in these areas and are therefore focused on the need for tensions to be carefully managed and de-escalated in the wider interests of the region.

And we look to China to play its part in this regard.

I made all of these points clearly during my recent discussions in China.

And, finally, in advancing our interests offshore, we cannot forget that New Zealand’s security begins at home.

To that end, the Government will be releasing an interrelated set of strategic policy documents and assessments, spanning across New Zealand’s national security, defence, and foreign policy – including New Zealand’s first National Security Strategy.

Taken together, these represent an important step in how we will protect our national security and advance our national interests in a more contested and difficult world.

At the same time, we need to move collectively forward with quiet confidence about who we are as a country, and what we stand for.

Principle 3 - Working with partners

This brings me to alignment and working with partners. Principle 3.

A small country like New Zealand cannot work alone, and we recognise the importance of building partnerships and inclusivity to address global challenges.

New Zealand has a long and proudly independent foreign policy but, as Foreign Minister Mahuta said recently, an independent foreign policy does not mean isolation, neutrality, or a fixed pre-determined view of how we will act on a particular issue.

Nor does it mean “going it alone.”

It’s clear that in this complex and interconnected world – one where New Zealand’s geographical remoteness will not shield us –- charting a way forward through many of the most pressing regional and global issues often requires working together with others.

Where we share a common view with our partners we will act to protect and preserve what is important to us.

That New Zealand’s approach will often align with that of our most likeminded partners, with whom we share many common interests and values, should not be a surprise.

This includes countries like the United States, the United Kingdom, the European Union, Japan and others.

Australia, in particular, is New Zealand’s only ally and our closest partner. It is natural that we will often have a similar perspective on the sharpening geostrategic environment. 

These common interests and concerns do not mean we will always take the same approach. Sometimes there is tactical strength in a diversity of approaches to achieve the same outcomes.

But our shared liberal democratic values and respect for human rights and international rules means that we have joined partners like Australia, the United States, and others, to raise concerns about a range of issues including, for example, the human rights situation in Hong Kong and in Xinjiang.

We have also joined partners like Malaysia, the Philippines, Viet Nam and others in Southeast Asia in calling for legal and diplomatic frameworks to be the focus for resolving territorial disputes in the South China Sea. 

And we are stepping up our engagement with India as it expands its role and interests in the Indo-Pacific region.

In summary, we are clear-eyed about our interests and our values.

These include respect for human rights, democracy, the rule of law, environmentalism, disarmament, and a stable and resilient Pacific.

Where these perspectives are shared with others, we work together. This is at the heart of our independent foreign policy.  

Conclusion

To conclude, thank you for the opportunity to share some of my reflections today. Let me finish with another experience from my visit to China.

I had the pleasure of visiting Baoshan International Folk Art Museum where, since 2010, museum staff have been the careful guardians of Te Waharoa.

Te Waharoa is a beautiful, carved entranceway, which was created on the New Zealand pavilion at the time of the Shanghai Expo and gifted to the people of China to symbolise the ongoing cultural, business, and political connections between our two countries.

The kauri wood used to carve Te Waharoa was 3500 years old and came from the ancient forests of Aotearoa.

As I expressed my thanks to the people of Baoshun for their guardianship of this important taonga, and as I stand here with you today, I am reminded of the great respect that both countries have for the long histories, rich cultures, and strong people-to-people connections that bind New Zealand and China. 

As with any complex relationship there are areas where we cooperate to advance our shared interests, and areas where we disagree.

It’s how we deal with differences that is important, and this will not always be easy.

For our part, we will seek to manage these with the respect, care, and responsibility they deserve, and in line with a clear sense of our national interest and values.

That’s the New Zealand way.

Thank you.