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NZ plans to curb Foreign Influence in Politics

March 12, 2019 | Expert Insights

New Zealand is considering introducing laws aimed at curbing foreign influence in domestic politics, ahead of a general election next year.

Background

New Zealand is a sovereign island country in the southwestern Pacific Ocean. The country geographically comprises two main landmasses—the North Island and the South Island, and around 600 smaller islands. New Zealand is situated approximately 2,000 kilometres (1,200 mi) east of Australia across the Tasman Sea and roughly 1,000 kilometres (600 mi) south of the Pacific island areas of New Caledonia, Fiji, and Tonga. Due its remoteness, it was one of the last lands to be settled by humans. During its long period of isolation, New Zealand developed a distinct biodiversity of animal, fungal, and plant life. The country's varied topography and its sharp mountain peaks, such as the Southern Alps, owe much to the tectonic uplift of land and volcanic eruptions. 

Sino- New Zealand relations, refers to the relations between New Zealand and China. New Zealand recognised the Republic of China after it lost the Chinese Civil War and retreated to Taiwan in 1949, but switched recognition to the People's Republic of China on 22 December 1972.

A free trade agreement (FTA) between China and New Zealand was signed on 7 April 2008 by Premier of the People's Republic of China Wen Jiabao and Prime Minister of New Zealand Helen Clark in Beijing. Under the agreement, about one-third of New Zealand exports to China will be free of tariffs from 1 October 2008, with another third becoming tariff-free by 2013, and all but 4% by 2019. In return, 60% of China's exports to New Zealand will become tariff-free by 2016 or earlier; more than a third are already duty-free. Investment, migration, and trade in services will also be facilitated.

Analysis

New Zealand’s deputy Prime Minister Winston Peters has said that the government is in consideration of introducing new laws that will help in curbing foreign influence in domestic politics.

“Our government is conscious of comment and concerns and we are listening,” Mr Peters said in an interview with the Financial Times. “In the case of the independence, neutrality and sovereignty of the New Zealand political system there will be proposals that will be ready for the next general election to ensure those concerns are addressed.”

The country’s governance has been severely criticized by security analysts and experts for not acknowledging that people or organizations with links to the Chinese Communist Party have sought to influence domestic politics.

The plan to ban all foreign donations is being drafted by New Zealand First, the political party being led by the Deputy Prime Minister which is in coalition with the Labor party. The Labor party has also instructed officials to look into electoral and foreign donation laws but the party has been non-committal on whether the laws will be passed before the next election.

The introduction of new laws on foreign interference, even if they are not publicly targeted at China, risks increasing tensions with Beijing, which criticized Australia for introducing similar rules in 2018. Some New Zealand business leaders and analysts have already warned relations between Wellington and Beijing have deteriorated following a decision by the security services to freeze plans by a local telecoms company to use 5G equipment developed by Chinese group Huawei.

The government is also looking to also reform their integrity rules regarding former politicians joining the boards of international banks. Several senior political figures sit on the boards of Chinese bank subsidiaries in New Zealand, including Don Brash, the former leader of the National party, who is chairman of Industrial and Commercial bank of China New Zealand. 

Assessment

Our assessment is that the reforms the Government is trying to make will reduce foreign influence in domestic politics. However, it is to be seen if the reformed laws will be passed before the general elections in 2020.