Rt Hon Helen Clark Prime Minister Address To New Zealand Asia Institute

New Zealand/China Relations: Leaping Ahead

Anniversaries are times to reflect on the past and look ahead to the future. In the thirty years since New Zealand and the People’s Republic of China established diplomatic relations, both countries have changed, and China has changed especially dramatically. In this lecture series, speakers have reviewed the experience of those thirty years, and looked at various aspects of the relationship between China and New Zealand as they evolved during that period. Today I want to look ahead: to consider how some recent developments in the interaction between China and New Zealand may shape our relationship in the future.

Let me first recall, however, that the decision to establish diplomatic relations with China was one of the first major decisions of the Third Labour Government led by Norman Kirk. It was a decision taken for the good and proper reason that New Zealand’s security and welfare could not be maintained or advanced in the absence of direct contact with the most populous country in the world, and one of the major powers of the Asia-Pacific region. In taking that decision Norman Kirk was mindful of the consequences for New Zealand’s then existing relationship with Taiwan. The government ensured that relations of a non-political, non-diplomatic character with the people of Taiwan were safeguarded. New Zealand governments since then have honoured the commitments made to the People’s Republic on the “One China” policy at that time, and my government will continue to do so.

In looking at aspects of New Zealand’s relations with China today, I want to consider how we interact as governments, how we interact as trade and investment partners, and how we interact as people. The China of 1972 had been isolated from much of the world, partly by choice, partly by circumstance, and partly by the actions of others. Its economy was inward-looking and its people had almost no exposure to the world beyond China. In all of these respects the picture today is almost unrecognisably different. China is an engaged, increasingly prosperous and confident member of the international community, and many of its people are travelling and studying all over the world, including here in New Zealand.

In 1985 and 1986, Parliament’s Foreign Affairs and Defence Select Committee, which I chaired, undertook a study of New Zealand’s relations with China. Already by the mid-1980s, New Zealand was hosting a large number of Chinese delegations from many sectors, especially eager to know more about the science and technology which had driven the development of advanced primary industries here. The relationship at that time, however, had a very formal character, compared to that of today. There were neither tourists nor private students from China; doing business there was difficult; and there was an absence of regional organisations in which China participated in an open manner with other nations. Relations could be characterised as friendly, but also distant.

Seventeen years on, New Zealand and China have come to know each other much better. At the government level, meetings are frequent, friendly, and where necessary candid. I visited China twice last year - once on a bilateral visit and the second time to attend the Shanghai APEC Leaders’ Summit. China’s successful hosting of APEC, together with its accession to the World Trade Organisation, and the decision of the International Olympic Committee that it should host the 2008 Olympic Games, made 2001 a landmark year for its international standing and relationships. President Jiang Zemin paid a state visit to New Zealand when he attended APEC in Auckland in 1999; China reciprocally hosted Governor-General Sir Michael Hardie-Boys in late 2000. At Los Cabos, Mexico, in October, I again met President Jiang Zemin at the APEC Summit, and our respective foreign and trade ministers also met on that occasion. China’s foreign minister has also visited New Zealand this year.

We note that a new generation of leaders is shortly to take office in Beijing. Our government looks forward to making their acquaintance and to welcoming them to New Zealand. While visits to one another’s countries are always valuable, it is helpful and indeed essential that we also have other opportunities to meet and discuss issues of common concern, such as the dramatic developments relating to global security as well as economic issues. Our common participation in a great variety of regional and global gatherings, of which APEC and the ASEAN Regional Forum (ARF) are the most significant, is especially valuable for precisely those reasons. It is a marked contrast with the situation thirty years ago, when Chinese leaders rarely ventured outside their country, the visits of foreign leaders to China were a novelty, and China’s participation in international organisations was constrained.

I said that our meetings are if necessary candid. There are issues on which we take different perspectives; indeed it would be surprising if there were not, given our very different histories. New Zealand ministers and officials will continue to raise issues related to the status of Tibet, religious freedom and other human rights, the application of capital punishment, and other such issues which are of concern to people in New Zealand. Naturally when such issues are raised, there is always an exchange of views. We believe, however, that the messages which New Zealand and other western nations convey are heard. Some recent developments in Tibet, for example suggest that China is mindful of the concerns we and others hold.

China has now ratified the International Covenant on Economic, Social and Cultural Rights. We urge China to ratify also the International Covenant on Civil and Political Rights. By striving to uphold the human rights standards set out in the core international human rights treaties, I am hopeful that over the next thirty years in our relationship, divergent views on human rights will become less prominent in our dialogue, as China continues to deliver improved standards of living to all its people, and becomes more attuned to international standards and expectations. In the meantime, we will continue to have an open dialogue on these issues.

New Zealand does of course work closely with China in many areas. We have , for example, long-standing scientific co-operation. This year marks the fifteenth anniversary of the signing of the NZ/China Scientific and Technological Cooperation Agreement, which encourages the exchange of research ideas, equipment, and people between our two countries. Science, technology and innovation are vital to the sustained growth and development of both our economies. We look forward to welcoming both the Chinese Science Minister and his delegation to New Zealand when we host the 4th APEC Science Ministers meeting in March 2004.

As a permanent member of the Security Council and as one of the five major nuclear powers, China has distinct and equal responsibilities to bring about general and complete nuclear disarmament. This is a cause in which New Zealand has invested a great deal of time and effort. At the 2000 Non-Proliferation Treaty review conference, China, along with the other nuclear powers, made an unequivocal undertaking to accomplish the total elimination of its nuclear arsenal. We believe that a China determined to set the pace on nuclear disarmament would win plaudits from the rest of the world. China has taken the first key steps towards the end of nuclear testing: it has signed the Comprehensive Test Ban Treaty (CTBT) and ceased its own nuclear tests. We urge China to complete the process by ratifying the treaty. Such a step would offer leadership in the region and beyond. We do welcome the new regulations which China has put in place to control the export of missiles and chemical and biological agents.

Proliferation of weapons of mass destruction can only be curbed if all countries act individually and collectively against it. In that context we also urge China to exercise what influence it can to persuade its neighbour, the Democratic People’s Republic of Korea (DPRK) to give up any planning for a nuclear weapons programme and to honour the agreements it entered into with the international community in 1994. North Korea’s pursuit of nuclear weapons does not enhance its security. Rather it sows doubt and uncertainty in the minds of its neighbours.

The need for co-operation against proliferation has never been more urgent as we work to combat international terrorism. As recent events have tragically demonstrated, terrorism knows no boundaries. All governments and all peoples are threatened by it, and all must co-operate to deal with it. China has demonstrated a strong commitment to the campaign against terrorism internationally, in supporting the UN Security Council resolutions after the attacks on the US, and regionally, through its contribution on the subject within the ASEAN Regional Forum.

A dialogue on defence is one of the more recent strands in New Zealand’s relationship with China. This proceeds from our commitment to regional confidence building and has been advanced by the reciprocal appointment of defence attaches. China appears to takes the defence dialogue with New Zealand seriously, despite our differences in size and situation. New Zealand enjoys good access at the highest levels of the Chinese defence establishment. Good progress is being made in developing mutually beneficial defence ties, such as cp-operation between our respective military educational institutes and the exchange of information through joint seminars and regular security dialogues. We believe there is potential for further co-operation in niche areas, such as logistics management, peacekeeping operation techniques, de-mining, language training, and personnel exchanges. While our security outlooks and defence priorities are very different, and while there is clearly a vast disparity in the relative sizes of our military establishments, there is ample scope for more interaction. It can also be deduced from this interaction and dialogue that our government does not see China as a threat to New Zealand’s security.

Our economic relationship with China is also growing. China is New Zealand’s fourth largest trading partner overall, and our sixth largest export market. The rate of growth of China as a market for New Zealand has consistently been above the average. Last year our exports to China increased by over $400 million, which is equivalent to adding another Singapore to our export markets. Furthermore, our exports to China have been growing faster than the average growth in exports to China from other countries. We are certainly getting our fair share of one of the world’s fastest growing economies.

The lure of the China market has attracted generations of entrepreneurs and business people, and has not always lived up to expectations. It is worth noting that South Korea, a smaller absolute market than China, takes more of our exports and provides more tourists to New Zealand than China. That tells us both what the potential of China is, and also that we have a long way to go to maximise our potential for trade with China. If we look thirty years ahead, at the current rate of growth in trade, China will rank in the top tier of our markets, alongside Japan, Australia and the United States. It is because of that potential that the recent government economic forum designated China as one of three major markets for a more co-ordinated private-public sector effort. Fonterra and Carter Holt Harvey, two of the largest traders into China from New Zealand, have agreed to lead this work.

China’s importance in the global economy is growing steadily and It is now the sixth largest economy in the world, and recently has moved up to become the world’s fifth largest trading nation. As a developing country, China’s growth rate is much steeper than those of the world’s major developed economies. That was particularly evident last year when many of the world’s developed economies were struggling. It also has to be much steeper than that of others if China is to keep abreast of the massive amounts of economic adjustment which are being required of its people as it integrates with the world economy.

China’s voice will increasingly be heard in the councils of the global economy, especially given its entry into the World Trade Organisation. New Zealand was an early supporter of China’s entry into the World Trade Organisation, and we were also the first Western country in the WTO to complete accession negotiations with China, in August 1997. China’s accession has improved our access to its market, including in respect of wool, which is our largest single export there. But there are broader implications too. Having forsworn subsidies on its agricultural exports, and having opened up its domestic agricultural market to international competition, China will also - we hope and expect - be a voice of reason in this central challenge for the world’s trade negotiators.

The impact of China’s economic prosperity and openness is being felt regionally. ASEAN and China have recently agreed on a programme to create a free trade area within ten years. This would rank as the largest free trade zone in the world in terms of population. New Zealand welcomes steps being taken to liberalise trade and investment, provided that they comply with the principles and intent of the WTO trading regime, and do not have the effect of creating barriers to trade with third countries. Again we see China, with its huge market and huge productive capacity as potentially a new global anchor of more open trade.

Underpinning the contacts between governments and businesses is the presence of people from our respective countries in the other. New Zealanders can be found all over China, as students, as teachers, running small businesses from backpackers’ hostel in Lhasa to a fitness centre in Beijing, and even helping restore the fortunes of one of the largest clothing companies in China. About 65,000 China visitors come to New Zealand each year, making China our fasting growing tourism market. There are about 40,000 tourists visiting China from New Zealand each year - a number that I also expect will climb.

Given the importance of China to New Zealand and given some of the crass populism expressed about the presence of Asians in New Zealand, it is worth noting the long links between China and our country. In the second half of the nineteenth century the world saw the first outpouring of people from China. They were economic migrants, driven to seek their fortunes in other lands, especially in the gold rich lands of the Pacific rim. Indeed some of my forebears came to New Zealand for the same reason. The reaction of the lands to which the Chinese came, however, was not as welcoming as it was to Europeans. Earlier this year I acknowledged publicly that New Zealand in the late nineteenth century and early decades of the twentieth century discriminated against Chinese migrants unfairly, and I offered a formal apology for that. It was an appropriate and overdue recognition that the state had behaved badly.

For much of the twentieth century China was either too poor, or too much the victim of external aggression or internal conflict in earlier decades, to have much of an impact on the rest of the world. Poverty and politics prevented Chinese people from leaving China. That has all changed. China is still a developing country, but the standards of living of many of its people have improved immeasurably since the policy of reform and opening up was adopted in 1978. Many New Zealand visitors to China, and I count myself amongst them, are amazed by what they see in Shanghai and Beijing, operating as they often are with images of China which are ten, if not twenty, years out of date. Even people who have been absent from China for a much shorter period are startled by the rapidity of change. Not all of China is changing at the same rate or to the same degree, and there are growing inequities, between city and countryside, coast and interior, and sunset and sunrise industries. But China’s membership of the World Trade Organisation is a strong signal that China remains committed to the path of integration and interaction with the world. Even with uneven growth, there is still a substantial group of people, perhaps as many as 100 million, who have attained a “comfortably off” standard of living. That almost equates to the total population of Japan.

It is representatives of that group whom we are increasingly seeing in New Zealand, as tourists, students, members of official delegations, and migrants. They are skilled, able, and entrepreneurial. They are keen to learn English, - indeed that is often why they come to New Zealand in the first place. They appreciate the stability of our society, they enjoy the clean and unspoilt natural scenery, and they are stunned by the low population density. The surge in numbers of these people is very recent. It was only in 1997 that we relaxed the criteria for the admission of Chinese students to New Zealand. It was only in 1999 that China designated New Zealand and Australia as countries to which Chinese citizens could travel as tourists, a status not yet shared by many other western countries. We now have about 20,000 Chinese students in New Zealand. Last year New Zealand received 65,000 short term-visitors from China, more than double the number which came just two years ago. If the current rate of growth were sustained, we would be receiving half a million Chinese visitors by 2010.

This is not an entirely new experience for New Zealand. Something similar happened over slower time with Japan, and happened more recently, and with ups and downs, with Korea. The growth in the Chinese presence in New Zealand seems likely to be as quick as Korea’s, as durable as Japan’s, and larger than either. From time to time, however, the visibility of Asian migrants and short term visitors in New Zealand is the focus of political debate, and we seem to be in such a period again.

With respect to migration, it is worth making the point that with the significant exception of the first Maori, all people who have come to this country have found other people here before them. The process of adjustment which is required by new immigrant and old settler has been repeated generation after generation: it is part of what makes New Zealand the country it is. New Zealand and New Zealanders change, but much more change and much more adjustment is required on the part of the immigrant. This is a country which has welcomed migrants for skills, capital, and the new ideas they bring. They also bring a welcome diversity to our culture, and they add new strands to the fabric of our nation.

There can of course be short-term pressure points. For example, the numbers of Chinese students have expanded so rapidly in recent years that we are probably close to capacity in some cities and at some levels within the sector. If as sometimes happens, classes in business management are being taught in Chinese, then the overall value of the experience those Chinese students are gaining in New Zealand is reduced. There will be an optimal rate for absorbing large numbers of overseas students in total and from any single market. Our schools appear to be aware of when they have reached the optimal threshold, and they adjust their entry procedures accordingly. Responsible practice across the sector in all areas is essential if we are to maintain our international reputation and credibility. We cannot afford to have Chinese students arriving at a language school, for example, with the expectation (even if misplaced) that they will then secure a place in a tertiary institution.

We have made several substantive changes to our international education policies over the last 12 months to address this kind of issue and maintain the quality of education and pastoral care services which New Zealand provides. There will no doubt be more changes to come as the sector continues to evolve. In future we are also likely to see a greater move towards New Zealand institutions delivering courses to foreign students in their own countries, including China, to relieve the pressures on our own education system.

The presence of these students in New Zealand, however, is an investment in our future relationship with China. Most of them will return to their own country with, we sincerely hope, a positive impression of the country in which they spent some of their formative years. Already, returned students are playing significant roles in the New Zealand economic presence in China, whether in businesses on their own, or as the employees of others. They are a very large asset for us, with links all over China.

Tourists are more transient visitors, but they nonetheless can play a very significant role in our economy and society. They are generally attracted by what is different from their home countries, but, in the way of the world, they still expect to find home comforts. For tourists from China this can be as simple as finding a decent Chinese meal or being reassured with signs in Chinese. Some decades ago our tourism industry adjusted to the increase in tourists from Japan. The process will be similar with tourists from China, but the numbers may end up being larger, and the rate of growth steeper. I would certainly expect that thirty years out Chinese tourists will be a fixture in our tourist destinations, and that they will be spending at much the same rate as tourists from developed countries. Again, as with the numbers of students, care will have to be taken to see that New Zealand does not build up over-dependence on the sizeable Chinese market.

The last few years have seen, I believe, the beginning of a new era in our relations with the world’s most populous country. There are two distinct but related changes: China is becoming a more significant voice in world affairs; and it is becoming a larger presence in our economy and society. These two developments are related because both rest on the fact that China is becoming a wealthier, more open, and self-assured society. Provided China continues with its current course of integration with the world - and I see no indication that it will not - then these trends will continue. New Zealand has every reason to welcome the increased prosperity of the Chinese people. We already have an excellent relationship with China. We can build on that to ensure that we share in China’s future, and in the future of its talented people.

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