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WORLD AT FIVE

Beijing is driving a wedge between Australia and New Zealand

China is the biggest export partner for both countries but Canberra is more afraid of war than a trade crisis, Bernard Lagan writes

*** BESTPIX *** Australian Foreign Minister Marise Payne Visits New Zealand
Marise Payne, the Australian foreign minister, visited the New Zealand parliament in Wellington last week
HAGEN HOPKINS/GETTY
The Times

Australia’s foreign minister had barely set foot in New Zealand when the questions began.

Followed across the Tasman Sea by a flurry of Chinese criticism after she blocked President Xi’s pet infrastructure project at home, Marise Payne arrived in Wellington for tense talks with her counterpart, Nanaia Mahuta.

When asked about New Zealand’s shift away from the Anglophone “Five Eyes” intelligence alliance, leaving Australia increasingly isolated against China, she replied: “That is entirely a matter for New Zealand.”

March 4 Justice Rally Held For Action On Gendered Violence In Parliament
A rally for the Uighur community in Canberra last month. Despite growing condemnation of China around the world, New Zealand’s criticism has been muted
SAM MOOY/GETTY IMAGES

“One thing I have learnt in my role . . . is not to give advice to other countries.”

Diplomatic niceties aside, New Zealand’s pivot away from Australia and western allies to seek closer ties with Beijing is unsettling neighbours. It came as Australia blocked China’s only “belt and road” infrastructure deal in the state of Victoria, infuriating Beijing.

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Chinese state media were triumphant about the rift between Australia and New Zealand. “Another unreasonable and provocative move taken by the Australian side,” wrote the Global Times, while praising New Zealand for “securing a stronger economic recovery and growth path”.

Experts said that Beijing was attempting to fracture an alliance in which New Zealand is now viewed as the “weak link”.

China is by far the largest trading partner of both nations and both are weighing their reliance on its cash against Beijing’s recent aggression and military influence in the region. For Australia, it appears that concerns about the danger of war, with China’s determination to subdue self-ruling Taiwan the likely catalyst, are outweighing fears of a trade crisis.

Indeed, in an unusually forthright message to 15,000 staff for Anzac Day last weekend, when Australia and New Zealand remember their war dead, Michael Pezzullo, 57, the Australian home affairs secretary tipped as a future head of Australia’s defence forces, declared that the “drums of war” were beating and that Australia must be prepared “to send off, yet again, our warriors to fight”. He wrote: “In a world of perpetual tension and dread, the drums of war beat — sometimes faintly and distantly, and at other times more loudly and ever closer.”

Fears are growing that China is building a force capable of retaking Taiwan. The United States has a security pact with Taiwan to supply it with hardware and technology to deter any invasion from the mainland. In the event of any conflict, experts suggest that Australia would follow Washington’s lead.

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Pezzullo’s message came as Peter Dutton, the defence minister, warned that a war with China over Taiwan could not be discounted. “We have good relations with a number of countries, including China, a very important trading partner,” he said. “But we do have a difference of opinion with the ideals of the Communist party of China. Let’s be very frank about it.”

Inside Rio Tinto's Mining Operations
Iron ore mines in Western Australia, including this one at Pilbara, rely on Chinese steelmakers to buy their product
IAN WALDIE/BLOOMBERG/GETTY

China accounts for 32.6 per cent of Australia’s exports. Without China, the vast iron ore mines across Western Australia that run day and night to feed China’s steelmakers could be made largely redundant. Iron ore is the country’s biggest export, fuelling the fortunes of the magnates who regularly top its rich list.

New Zealand also counts China as its biggest market — the destination for 32.3 per cent of its exports. Dairy is New Zealand’s single biggest export and China its biggest customer.

Cows now outnumber people in the country, largely owing to China’s soaring demand for milk powder, butter and cheese. In its green hills and valleys, dairy cattle numbers have almost doubled to more than six million over the past three decades.

While Australia and New Zealand have an equal interest in preserving their export markets, they are now on widely divergent paths.

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Australian Foreign Minister Marise Payne Visits New Zealand
Nanaia Mahuta, the New Zealand minister for foreign affairs, said that the country was “uncomfortable” with expanding the remit of the Five Eyes group
HAGEN HOPKINS/GETTY

Australia has been more forthright in its public admonishment of Beijing and much more direct in its actions to counter China’s interference and influence at home.

When Payne blocked the belt-and-road initiative in Victoria this month, she said that the deal was “inconsistent with Australia’s foreign policy or adverse to our foreign relations”.

Australia has infuriated Beijing by calling for an independent investigation into the origins of the coronavirus pandemic. Canberra has also banned the Chinese company Huawei from building Australia’s 5G network and tightened foreign investment laws for corporations.

In response, China has placed tariffs on more than a dozen Australian products.

APEC Summit 2018 in Port Moresby
President Xi’s pet infrastructure project has been blocked in the Australian state of Victoria, to the anger of the Chinese
MICK TSIKAS/EPA

New Zealand was an early signatory to President Xi’s infrastructure project in 2017. There is little sign it is prepared to reverse that decision. Its criticism of China’s growing military influence in the region has been muted.

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In May New Zealand was the only member of the Five Eyes intelligence network not to sign a joint statement issued by the UK, US, Canada and Australia condemning China’s sweeping new security laws clamping down on dissent in Hong Kong.

In December it again opted out of a joint Five Eyes statement on human rights in China. This month, Mahuta said that New Zealand was “uncomfortable” with expanding the remit of the Five Eyes group beyond intelligence-sharing.

Apparently as a result of that, New Zealand has succeeded in avoiding the harsh retaliatory action China has taken against Australia. In January it was even granted an upgrade to its 12-year-old free-trade agreement with China — Beijing’s first with a developed nation.

A man is seen in a building of Qingpu Prison in Shanghai
Stern Hu, an Australian citizen and the former boss of an iron ore company in China, was imprisoned for eight years at Quingpu after being convicted of stealing commercial secrets
ALY SONG/REUTERS

Mahuta, meanwhile, has refused to back down on doubts over Five Eyes. To protect “universal human rights”, she said, it was important to build “a broader consensus of support” beyond the alliance.

Clive Hamilton, professor of public ethics at Charles Sturt University in Canberra, who has written widely on China’s growing influence in the region, told The Times: “There are now real questions about New Zealand’s sovereignty, which is spilling into the Five Eyes alliance.

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“Five Eyes can’t work without complete trust between the partners. New Zealand has become the weakest link.”

Riots Occur In China's Urumqi Ethnic Region
China has faced global criticism for its treatment of the Uighur minority in Xinjiang province, where more than a million are thought to have been detained in recent years
GUANG NIU/GETTY

Any suggestion that New Zealand could be left out is likely to cause concern among its spy agencies. It is the only member of the network to put a figure on what it gains from the alliance.

A 2017 review of intelligence and security networks found that for every report New Zealand submits to Five Eyes it receives 99 in return. Whichever decision it reaches on China, there will be a cost.

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