New Zealand / Business

Pacific link trump card in NZ/China agreement

13:42 pm on 5 October 2017

New Zealand's links in the Pacific could be a trump card in negotiating a deal with China as a part of its trillion-dollar programme to build infrastructure around the world.

Photo: 123RF

Also known as One Belt, One Road, it is China's plan to build ports and railways around the world, including countries in the Pacific, and then use them as trade routes to grow the country's economy and global connections.

Prime Minister Bill English signed an agreement to support the initiative after a visit from the Chinese premier Li Keqiang in March, saying it would mean more opportunities for businesses here.

Institute of Economic Research principal economist Derek Gill said New Zealand has a good understanding of the region.

"It's one of the rare cases where a small country could add quite a lot because ... we have quite deep links ... in Polynesia," he said.

But Victoria University senior lecturer of Politics and International Relations Jason Young said there were risks with China expanding into the Pacific.

"I do think there's a danger that different philosophical beliefs about how development occurs could become competitive and that projects could be not well coordinated," he said.

"There could be a bit of competition between the different donors in the region."

Dr Young said China's one-party system and its focus on the overall goal rather than how it got there was a different way of operating.

He said New Zealand needed to do everything it could to make sure any Chinese infrastructure projects in the Pacific have the best outcome for everyone.

Experts question New Zealand's involvement

But Pasifika experts were concerned the region was being used as a pawn by New Zealand to win the best trade deal for itself.

Tongan Advisory Council chair Melino Maka said some leaders in the Pacific actually found it easier to deal directly with China rather than New Zealand or Australia.

He said the Chinese did not ask a lot of questions and were flexible when renegotiating deals or loans.

Melino Maka Photo: tonganz.net

"When I talk to some of the Tongan and some of the Pacific politicians, they all say the same thing," he said.

"In New Zealand and Australian, the criteria, sometimes they look at it [and think] it's too hard ... and that's the appeal of China."

Auckland University of Technology Pacific Studies senior lecturer Teena Brown Pulu said she questioned the need for New Zealand to even be involved.

"Their [the Pacific's] relationship with China is their relationship with China, it's not one to be tempered with in some kind of tripartite agreement," she said.

However, Dr Pulu said China's increasing dominance in the Pacific was not supported by locals either.

In July, the New Zealand government announced it was coming up with a detailed working plan on what a Belt and Road partnership with China would look like.

It said the plan would take 18 months to complete and that it would be consistent with its track record as an advocate for open rules-based trading systems.