When an Air New Zealand jet to Shanghai was forced to turn around earlier this month, it seemed a relatively innocuous event put down to misfiled paperwork.

But it was the first of a string of incidents that are fuelling concerns China may be turning a cold shoulder toward New Zealand after it barred Huawei Technologies from its next-generation wireless networks. While Prime Minister Jacinda Ardern denies any friction, the opposition is calling on her government to shore up the relationship to avoid potentially dire economic consequences.

“Our relationship with China is worth over NZ$27-billion in two-way trade,” opposition National Party foreign affairs spokesman Todd McClay wrote in a New Zealand Herald column on Sunday. “The prospect of a deteriorating relationship with China is a major risk. It hampers certainty in the economy and creates uncertainty for our exporters and tourism operators.”

Any cooling of the friendship could have significant ramifications for the tiny South Pacific nation, which is in the process of negotiating an upgrade of its free-trade agreement with China. The world’s most populous country and second largest economy has become New Zealand’s biggest trading partner, taking a quarter of all exports, while surging Chinese visitors have helped make tourism the country’s biggest foreign-exchange earner.

New Zealand, which is a member of the “Five Eyes” intelligence alliance that includes the US, Australia, Canada and the UK, wouldn’t be the first to face a backlash from China. Since Canada arrested Huawei’s chief financial officer on a US extradition request in December, China has detained two of its citizens and sentenced a third to death for drug trafficking. In Australia, beef and wine exporters complained of customs delays after the government implied China was meddling in its politics and media.

Trigger

The trigger for China’s displeasure with New Zealand may have been the Ardern government’s decision in November to block Huawei from supplying 5G wireless equipment to its telecommunications operators. Following Australia’s lead, and after reported pressure from the US, New Zealand said the Huawei 5G technology represented an unspecified national security risk, raising the ire of the Chinese authorities.

That came against the backdrop of a defence strategy paper in June that identified China’s growing influence in the Pacific as a concern.

Earlier this month, Air New Zealand, the government-controlled airline, was forced to redirect a flight to Shanghai, apparently because paperwork included a reference to Taiwan.

Within days, other signs of strain in the relationship were being identified:

The formal launch of the 2019 China New Zealand year of tourism in Wellington was postponed because senior Chinese officials were unable to attend;
Seafood exporter Sanford said several of its fresh salmon shipments had faced delays in being cleared through Chinese ports;
A report in a Chinese newspaper said tourists were cancelling plans to visit New Zealand due to the Huawei ban and strained political relations; and
Ardern’s planned trip to Beijing to meet Premier Xi Jinping, originally scheduled for late last year, was postponed due to “scheduling issues”.

“If it had just been the plane that was turned around, I might have said it was just misfiled paperwork,” said Stephen Noakes, a senior politics and international relations lecturer at University of Auckland who specialises in Chinese foreign policy. “But all these things happening at once makes it look like China is less than happy with New Zealand right now.”

The ministry for primary industries said on 15 February that exports continue to be cleared into China as usual despite “recent media reports suggesting delays’.’ And Ardern has accused the opposition of scaremongering, saying it is blowing small administrative issues out of proportion.

“I’ve heard statements made by the opposition that I deem to be incorrect” and “it’s in the national interest to correct them”, she told a news conference in Wellington on Monday. “Our relationship with China is complex, but our goods exports are up, our tourism numbers are up and there are a number of other indicators that show we still have a strong relationship despite those complexities.”

Feedback from New Zealand’s dairy exporting giant Fonterra Cooperative Group was that “they haven’t seen any issues”, Ardern added.

The ministry of foreign affairs in Beijing didn’t immediately respond to a faxed request for comment.

Noakes said it’s impossible to say for sure whether China is snubbing New Zealand, and in any case things could be a lot worse.

“Canadian-China relations are at an all-time low, I don’t think that’s true of New Zealand,” he said. “We’re only at the point where we’re speculating that it’s not as good as it was last week.” — Reported by Matthew Brockett and Tracy Withers, (c) 2019 Bloomberg LP