New Zealand offers potential for 'Chinese espionage' - Hoover Institution

China's growing influence in the Pacific has been highlighted yet again, this time by a US think-tank warning of New Zealand's vulnerability. 

The Hoover Institution - a think-tank known to be moderately conservative - released its Chinese Influence & American Interest report on Monday. New Zealand was presented as a case study in the report, alongside six other countries.  

New Zealand is of strategic interest to China for several reasons, the report says, citing its relevance to China's "growing ambitions" in the Pacific region. After all, New Zealand manages the defence and foreign affairs of three other territories in the Pacific - Tokelau, the Cook Islands and Niue. 

Concerns over China's influence in New Zealand go back to September 2017, when University of Canterbury professor Anne-Marie Brady published a paper laying out the Communist Party's plans for worldwide influence, and examined New Zealand as a case study of Chinese influence.

As a member of the Five Eyes security partnership with the US, the UK, Australia and Canada, New Zealand offers "enormous possibilities for Chinese espionage", the Hoover report says. 

The Chinese government considers New Zealand an "exemplar of how it would like its relations to be with other states", the report adds, noting that relations between the two countries have been compared to China's close ties with totalitarian Albania in the early 1960s. 

With around 200,000 ethnic Chinese in New Zealand, primarily concentrated in Auckland, the report says influence efforts targeted toward New Zealand politics "transcend the diaspora community to include campaign contributions". 

In October, it was alleged Chinese businessman Zhang Yikun - who owns $40 million in Auckland property - donated $100,000 to the National Party earlier this year, and tried to influence the future political prospects of his business partner Colin Zheng. 

National MP Dr Jian Yang was investigated last year after it was alleged he had studied and taught at a spy school before moving to New Zealand. He denied ever being a spy, but admitted teaching students English to help them with their spying activities.   

Chinese companies have also been instruments of interference in New Zealand, the Hoover report adds. This bears relevance to the GCSB last week blocking Chinese telecom vendor Huawei from developing Spark's proposed 5G network over security concerns.  

Political commentator Richard Harman said the New Zealand-China relationship may be hurt because of the decision, but it would better align New Zealand with Australia and the US who have also banned Huawei from their 5G networks.

Prime Minister Jacinda Ardern links arms with Indian Prime Minister Narendra Modi, Chinese Premier Li Keqiang, and Philippine President Rodrigo Duterte at the 2017 East Asia Summit.
Prime Minister Jacinda Ardern links arms with Indian Prime Minister Narendra Modi, Chinese Premier Li Keqiang, and Philippine President Rodrigo Duterte at the 2017 East Asia Summit. Photo credit: Image - Reuters; Video - The AM Show

The US Ambassador to New Zealand, Scott Brown, warned in October that New Zealand should be wary of China's growing influence, criticising China for its claims to the South China Sea, where China has rapidly "turned reefs into artificial islands that appear to be military installations". 

These concerns were echoed last month by Malaysian Prime Minister Mahathir Mohamad who, at the East Asia Summit in Singapore, warned Prime Minister Jacinda Ardern that although New Zealand is quite far from the South China Sea, what happens there will "eventually impact all countries". 

The Hoover report also touches on Chinese influence in New Zealand media, citing the 2016 partnership between newspaper China Daily and Fairfax Media. In addition, New Zealand's local Chinese language outlets all have content cooperation agreements with China's Xinhua News Service. 

It concludes that the New Zealand Government has taken "few steps" to counter foreign interference in its internal affairs, "unlike Australia". For instance, charity fund-raising - which has been used to mask contributions - has been excluded from disclosure requirements. 

"New Zealand's intelligence service still cannot investigate cases of subversion and foreign influence inside its political parties without the approval of the service's minister, whose political calculations may inhibit action," it says. 

China is New Zealand's second-largest trading partner, and a critical market for two of its most important sectors - tourism and milk products.