Key arrives in China for talks

John Key has been told to stay out of the debate on ownership of islands in the South China Sea (AAP)
John Key has been told to stay out of the debate on ownership of islands in the South China Sea (AAP)

The Prime Minister's been urged to stick to economic issues during his week-long visit to China.

China's state-run news agency Xinhua -- often viewed as a mouthpiece for the Chinese government -- warned trade talks with the nation could suffer if John Key hones in on disputes over the South China Sea.

On the surface it appeared a warm welcome for Mr Key in Beijing -- handshakes, flowers and all the makings of a friendly political arrival.

But the frosty reception from Xinhua has some concerned. It says he "should be reminded New Zealand is an outsider in the dispute, and not a concerned party".

It referred to comments made by Mr Key around the issue in February, and warned not to allow our military allies -- like the United States -- to hijack New Zealand's ambitions.

Mr Key says the editorial was one of a range of views from Chinese media which he took "with a grain of salt".

He was "almost certain" the issue would come up in the talks during his trip, but the Government's position on the area hasn't changed.

"I don't think they'll come away from any of the meetings we'll hold over the next 48 hours at all surprised by New Zealand's position. It's been consistent.

"We tend to be a little less aggressive than some countries on that issue, which doesn't mean we don't care about it. It's our most important waterway for getting our good into the international markets."

New Zealand's view is that the issue should be resolved peacefully between the parties involved, and did not have an opinion on ownership rights to particular islands. Mr Key says the law of the sea should apply.

Mr Key has also urged to tread carefully in the balancing act between China and the US by New Zealand International Business Forum executive director Stephen Jacobi.

"This requires very careful diplomacy. In a sense New Zealand's foreign policy is about never having to choose between the two or choosing them both, but sometimes our values require us to take a stand, so I would think John Key needs to follow his talking points very carefully," he told the Paul Henry programme on Monday.

Another sticking point is New Zealand's participation in a military exercise in the South China Sea during Mr Key's visit. That exercise is being hosted by Malaysia, one of the many countries in conflict with China over the ocean territory.

Mr Key says New Zealand's involvement in the exercise is a standard training operation which they've been part of before.

The Prime Minister's visit has one major goal -- to talk trade and renegotiate the free trade deal between the two countries.

New Zealand already has a free trade deal with the Asian nation, but it was signed eight years ago in 2008 and Mr Key believes it needs to be altered.

His aim will be to improve the deal in relation to dairy, and make changes that will see the agreement move into the internet age.

Mr Jacobi also says our growing business links with China, including the free trade agreement, could help Helen Clark's bid to become the United Nations Secretary-General.