New Zealand's involvement in an investment bank established by China is being viewed as a strategic move.
John Key with Chinese President Xi Jinping in Beijing during a visit in March last year. Photo: AFP
New Zealand has agreed to become a founding member of the Asian Infrastructure Investment Bank.
The bank set up as a counterweight to the US-backed World Bank and International Monetary Fund aims to invest in new inrastructure across Asia.
New Zealand will invest $125 million over five years.
Victoria University professor of strategic studies Robert Ayson said New Zealand had joined the bank despite the United States being very vocal in speaking out against it.
"We will continue to say that this does not mean we are is choosing China ahead of anybody else. But in terms of the future of our economic destiny, increasingly China is going to be such a big player and some of the other rising Asian powers too," he said.
Professor Ayson said it was one of the first times China was leading a new institution.
"This in a sense is different to the types of Western-led institutions that we've been a part of since the end of the Second World War. So it's an important and potentially defining moment."
A signing ceremony of the Asian Infrastructure Investment Bank in Beijing in October last year. Photo: AFP
Labour Party finance spokesperson Grant Robertson said it was an obvious investment for New Zealand, given China's growing influence in the global economy.
"Quite clearly this initiative was going to happen and it really became a question of whether or not New Zealand should be at the table and the decision to be at the table was the right one when there is so much activity taking place in Asia that involves New Zealand," Mr Robertson said.
Green Party co-leader James Shaw said it was significant New Zealand had ignored the United States' objections to the bank and sided with its Asian Pacific partners.
"We do live in a multilateral world and we think it's important that New Zealand continues to have an independent foreign policy and not be completely beholden to the Americans all of the time," he said.
Mr Shaw said there were some big geopolitical considerations in joining the bank, but broadly doing so was a good thing.