Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
New Zealand has suspended funding to the Cook Islands over the Pacific archipelago’s deepening relationship with China and demanded greater efforts by its historic ally to rebuild trust.
The move by Winston Peters, New Zealand’s foreign minister, marked the latest instance of what analysts have called Wellington’s more assertive approach to smaller Pacific island nations in response to China’s growing diplomatic and economic influence in the region.
That push had rattled the traditional powers in the Pacific, including the US and Australia, which struck deals last year with Tuvalu, Papua New Guinea and Nauru and increased foreign aid in the Pacific. China, meanwhile, hosted 11 foreign ministers from the island nations at a summit last month.
The aid suspension came as New Zealand’s Prime Minister Christopher Luxon is in China, where he is set to meet President Xi Jinping on Friday, as part of a trade mission to foster closer economic ties.
Peters said the move to suspend NZ$18.2mn (US$11mn) in development assistance to the Cook Islands — which came in response to the island nation signing an economic agreement with China in February — would not overshadow Luxon’s visit.
“It’s a matter to do with New Zealand and the Cook Islands,” he told reporters on Thursday. Peters added that he had stressed the “special relationship” between New Zealand and Pacific partners including the Cook Islands, Niue and Tokelau in a meeting with Chinese foreign minister Wang Yi this year.
The Cook Islands is one of New Zealand’s closest allies in the Pacific. Wellington controlled the territory, which has a population of about 27,000, until 1965. The countries now have a “free association” agreement, with New Zealand providing financial as well as foreign affairs and defence support. Cook Islands citizens have New Zealand passports.
New Zealand contributed NZ$194mn to the country over the past three years, according to government figures.
Peters said New Zealand had not received satisfactory answers from the Cook Islands government, led by Prime Minister Mark Brown, over the “comprehensive strategic partnership” with China, which covered areas including trade, tourism and renewable energy.
Peters added that New Zealand “will also not consider significant new funding until the Cook Islands Government takes concrete steps to repair the relationship and restore trust”.
Brown’s government was informed of the funding suspension this month, according to Peters.
The Cook Islands’ government did not immediately respond to a request for comment.
Jon Fraenkel, a professor of comparative politics at the Victoria University of Wellington, said Peters’ approach reflected a “more assertive Pacific policy” by New Zealand.
New Zealand in January also placed a review on aid to Kiribati, an island chain north of the Cook Islands, after its president and foreign minister scrapped a meeting with Peters, triggering tensions.
Fraenkel warned that China could take advantage of the fallout to “opportunistically” fill the funding gap, giving Beijing another opening as it looks to deepen economic and security co-operation with nations in the strategic region.
But he said New Zealand was unlikely to abandon its relationship with the Cook Islands, due to the countries’ historic ties.
“I don’t believe they’ll really bring the axe down,” he said.
