Escalating tension between Australia, China raising questions over where New Zealand's loyalties lie

Vector of Conflict concept of Australian and Chinese flag background. EPS Ai 10 file format.

Jane Patterson for RNZ

Rising tensions between Australia and China have raised the question of where New Zealand would stand if things escalate further.

Close trans-Tasman friend and ally Australia is taking a more aggressive stance against China - with South China Sea and Taiwan potential flashpoints.

And recent statements from its defence minister about a possible conflict with China have caused some alarm - a prospect that could put New Zealand under real pressure - to pick a side.

After a year of heavy trade strikes against Australian exports, diplomatic outbursts and increasing military activity in the region, new Australian Defence Minister Peter Dutton told the ABC conflict with with China over Taiwan "should not be discounted".

New Zealand Minister of Foreign Affairs Nanaia Mahuta said she could not comment on "prospective thinking about what may or may not happen", adding New Zealand "values" the important relationship with Australia.

It did "make for an uncomfortable situation" to have Australia and China at loggerheads and "where you see your neighbours being treated in such a punitive way", she said.

Australia was in a different position to New Zealand and "obviously see things in a certain way, because they have neighbours and are in a part of the region where they feel several things more acutely and we will remain closely connected in the way that we share our view of what's happening in our region", Mahuta said.

If it came down to taking sides - what would New Zealand do?

"New Zealand is very aware that we are a small country in the Pacific," Mahuta said.

"And we are also aware that the nature of our relationships, both bilateral and multilateral, require us to be nimble, respectful, consistent and predictable in the way that we treat our nearest neighbours, but also those who we have bilateral relationships with, no matter whether they are big or small relationships."

Leading defence analyst Paul Buchanan said storm clouds were gathering and armed conflict was now a "distinct possibility".

"Maybe not directly between the Australians and the Chinese, unless there's a miscalculation involving a Australian warship, doing freedom of navigation exercises in the South China Sea," Buchanan said.

"But more than likely, as part of a dispute that gets out of control and Australia, as part of a coalition of countries, probably led by the United States, that is duty bound to respond, so for example, Taiwan."

If such a conflict erupted, that would leave New Zealand "between a rock and hard place" because it would be asked to join that coalition, Buchanan said.

That would require some "hard decisions ... that have been in the making for well over a decade when we decided to throw most of our trade ships into the Chinese market".

"Now we're in on the horns of a dilemma and a bit of a quandary should our security partners ask us to join them in the common defence of a country suffering from Chinese aggression," he said.

RNZ