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The End of New Zealand’s “Asymmetrical Hedge”?: Assessing New Zealand’s Indo-Pacific Outlook Post-Ardern

  • Published
  • By Dr. Nicholas Ross Smith

Abstract

Since the late 2000s, New Zealand has largely followed an asymmetrical hedging strategy in its foreign policy: growing its trade relationship with China while concurrently remaining firmly within the US-led security architecture. However, as the room for hedging in the Indo-Pacific has shrunk, especially after Wellington adopted an Indo-Pacific outlook in 2019, New Zealand has taken steps to lessen its trade reliance on China while further committing itself within the Anglosphere. Since the election of the Sixth National Government of New Zealand in late 2023, Wellington appears to be tentatively switching from a strategy of hedging to something closer to a more conventional balancing strategy, evident in its efforts to participate in AUKUS. While the current situation can still be characterized as an asymmetrical hedge given the ongoing importance of China, if the room for hedging continues to shrink, it is likely that New Zealand will completely abandon its hedge in the future. 

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Since the late 2000s, New Zealand has adopted an asymmetrical hedging strategy in its foreign policy. It has strengthened its trade relationship with China while remaining firmly within the US-led security architecture. However, after New Zealand adopted the Indo-Pacific concept in 2019, the regional geopolitical room for hedging has shrunk, forcing New Zealand to reconsider its asymmetrical hedge. Central to this change is New Zealand’s growing consideration of participating in AUKUS, which has intensified since the Sixth National Government took power in late 2023. Joining AUKUS would likely make New Zealand’s mature relationship with China untenable and force it to adopt a more conventional balancing strategy.

This article is structured in four sections. The first section examines New Zealand’s asymmetrical hedge that dominated its foreign policy in the 2010s. The second section analyzes New Zealand’s shrinking room for hedging due to the changing geopolitics of the Indo-Pacific. The third section assesses the foreign policy of the Sixth National Government, particularly the debate around whether New Zealand should participate in AUKUS. The final section discusses whether New Zealand’s apparent shift in foreign policy strategy can be reversed.

New Zealand’s Asymmetrical Hedge in the 2010s

In the Indo-Pacific, hedging between China and the United States has generally been the preferred foreign policy for most sub-great powers.[1] Indeed, the very concept of hedging in international relations was first identified when Southeast Asian states pursued a third-way strategy instead of balancing or bandwagoning, which were the expected strategies to address China’s rise.[2] Hedging is an umbrella term encompassing various state behaviors, popularized for its resemblance to financial strategies that spread risk to mitigate potential calamity.[3]

Evelyn Goh defines hedging as “any behaviour that sits in between balancing and bandwagoning,” often exhibiting qualities of both.[4] Sub-great powers typically aim to cultivate a middle position that avoids choosing one side at the obvious expense of another.[5] The nature of hedging varies significantly due to differences in foreign policy-making processes among states.[6] However, one aspect that can be more easily categorized in the context of great-power rivalry is alignment. Darren Lim and Zack Cooper define hedging as “an alignment choice involving the signalling of ambiguity over the extent of shared security interests with great powers.”[7]

When assessing a state’s hedging strategy, the key question is: what is the underpinning alignment aim? Broadly speaking, there are four main types of alignment aims common to sub-great power hedging. The most ambitious is multi- or dual-alignment, where a state concurrently aligns with multiple sides. Another option is asymmetrical alignment, where a state builds security ties with one state while maintaining friendly relations with the other. Non-alignment, where a state explicitly avoids taking sides, is the least ambitious option. The riskiest is a zigzag or wedging strategy, where a sub-great power plays off larger powers against one another to align with the highest bidder.

The question of New Zealand’s hedging alignment aim has attracted significant media attention and generated robust scholarly debate.[8] At the heart of New Zealand’s strategic calculus is its relationship with China, which has unequivocally become one of New Zealand’s most important partners. Although relations were modest at first after New Zealand switched recognition from the Republic of China to the People’s Republic of China (PRC) in 1972, Sino-New Zealand relations have blossomed in the past two decades.

Central to this blossoming has been a free trade agreement (FTA), with negotiations beginning in 2004. At the time, Prime Minister Helen Clark remarked that New Zealand was “the first developed country to conclude a bilateral market access agreement with China for its entry to the World Trade Organization; the first to recognize China’s status as a market economy and the first country to enter FTA negotiations with China.”[9] The FTA came into force in 2008 and was upgraded in 2022. Unsurprisingly, it has significantly boosted New Zealand's trade with China. In 2008, China accounted for a mere 5.8 percent of New Zealand's exports, but by 2023, that share had risen to approximately 27 percent, only slightly less than New Zealand’s combined exports to Australia, Japan, and the United States, which accounted for approximately 30 percent.[10]

However, the Sino-New Zealand relationship should not be viewed solely through a trade and economics lens. By the late 2010s, relations had matured to the point that they were routinely called mature.[11] This term is popular with China to designate a bilateral relationship grounded in mutual respect where disagreements can be resolved through dialogue, not confrontation.[12] The term was once regularly used to describe Sino-American relations, especially in the late 2000s, but has fallen out of favor as the relationship has become notably frosty over the past decade.

Evidencing the maturity of the Sino-New Zealand relationship, the inauguration of the Sixth Labour Government of New Zealand in October 2017 occurred shortly before the 45th anniversary of official diplomatic relations between the PRC and New Zealand. During a speech to mark the occasion, then-Minister of Foreign Affairs Winston Peters remarked that the relationship had evolved into something akin to a “comprehensive strategic partnership” and that “New Zealand and China have grown beyond the business and institutional contacts.”[13]

Similarly, China’s Foreign Minister, Wang Yi, reflected in 2017 that there is a “high-degree of political mutual trust between the two countries” while also referring to the relationship as a “comprehensive strategic partnership.”[14] New Zealand’s strategic trajectory relative to the rise of China is not unique in the Indo-Pacific context. Since at least the late 2000s, China has ranked as the most important trading partner to the majority of Indo-Pacific countries, a testament to the overarching hedging strategies employed by these states.

However, Australia (38.5 percent of all exports) and New Zealand (27.4 percent) stand out as the countries that have grown their trade levels with China to the point of being two of the most dependent in the Indo-Pacific. For comparison, China as a destination for exports accounted for 18 percent for the ASEAN group.[15] While New Zealand has developed a mature relationship with China, Australia has not. Australia’s relationship with China soured notably in the late 2010s, partly due to Canberra’s long-standing security ties to the United States.[16] Conversely, New Zealand’s relationship matured to a point where China’s state-run media routinely applauded New Zealand for maintaining an independent stance, presenting New Zealand as a model “that other countries could learn from.”[17]

Despite a significant period of warming relations, issues still arose between New Zealand and China. During Jacinda Ardern’s first term as prime minister (2017–2020), concerns over Huawei (especially related to perceived cybersecurity and intellectual property threats), Xinjiang (human rights), and the protests in Hong Kong threatened the bilateral relationship. On occasion, New Zealand felt it necessary to publicly criticize China.

Furthermore, the emergence of geopolitical rivalry between China and the United States in the mid to late 2010s made officials in Wellington nervous about New Zealand’s seeming dependence on China, particularly regarding trade, and how it might be vulnerable if forced to choose a side. This growing anxiety was exacerbated by constant revelations of Chinese influence in New Zealand politics in the late 2010s, most notably accusations of China targeting individuals and groups, especially diasporic ones, critical of the Chinese Communist Party.[18] 

Despite New Zealand cultivating the friendliest relationship with China among the five core Anglosphere countries, it remained firmly entrenched, albeit not to the extent of Australia, within the Anglosphere security architecture and looked to Washington for security assurances. While New Zealand was growing its trade relationship with China, it was also strengthening its security relationship with the United States. New Zealand’s relations with Washington hit a notable nadir in the 1980s due to Wellington’s refusal to allow the United States to send nuclear-powered ships into New Zealand’s waters.[19] This resulted in the United States suspending its ANZUS treaty commitments to New Zealand and downgrading New Zealand’s status in Washington from close ally to friend. Nevertheless, New Zealand spent much of the 2010s repairing security relations with the United States, signing the Wellington (2010) and Washington (2012) declarations, both of which laid the foundation for greater defense cooperation.[20]

By the end of the 2010s, New Zealand’s hedging behavior clearly resembled an asymmetrical alignment. Its foreign policy grand strategy involved aligning with the United States for security while simultaneously developing a mature relationship with China.

New Zealand’s Shrinking Room for Hedging

A key factor in the success of hedging—and its inherent alignment aims—for sub-great powers is the permissiveness of the regional geopolitical environment. For all but the truly global superpowers, the regional geopolitical environment is the most important systemic influence on foreign policy making. This is because “the members are so interrelated in terms of their security that actions by any one member, and significant security-related developments inside any member, have a major impact on others.”[21] In regions with low levels of enmity and strong institutional mechanisms to manage security, sub-great powers can choose which relationships to develop. This makes more ambitious multi-alignment hedges viable.

An example of such a regional setting is Central Asia, where the two pre-eminent powers, Russia and China, have growing amity and have created a security architecture anchored by the Shanghai Cooperation Organization (SCO). To date, this has pacified any potential geopolitical instability.[22] Thus, for a country like Kazakhstan, pursuing a dual alignment between China and Russia makes a lot of sense and has proved largely fruitful.[23]

New Zealand, at the height of its relationship with China, also experimented with dual alignment between China and the United States. In the late 2010s, China was not merely seen as a country to which New Zealand could export goods but as a partner and potential friend. New Zealand hoped to act as an honest broker in mediating the deteriorating Sino-American relationship. In 2018, then Trade Minister David Parker stated that New Zealand could be a “bridge” between the United States and China.[24]

However, such notions quickly faded. Firstly, the idea that New Zealand had the diplomatic capital to act as a bridge was widely ridiculed internally and failed to garner attention in Washington or Beijing. Secondly, the trustworthiness of China remained a concern, especially given its increased assertiveness, which threatened the rules-based system New Zealand strongly adhered to.[25] The New Zealand government’s 2018 Strategic Defence Policy Statement noted that despite China integrating “into the international order, it has not consistently adopted the governance and values championed by the order’s traditional leaders.”[26]

New Zealand’s asymmetrical hedge was simply the most optimal foreign policy strategy that its regional geopolitical environment permitted. New Zealand’s early twenty-first–century foreign policy trajectory was a product of a regional geopolitical setting that allowed concurrent security relations with the United States and a deepening relationship with China. However, by the mid-to-late 2010s, this became increasingly problematic due to the growth of the Indo-Pacific concept. Although the Indo-Pacific concept had its roots in security cooperation between Japan and India, it was not until the United States’ official adoption of an Indo-Pacific outlook in 2017 that the concept truly impacted regional geopolitics. The 2017 National Security Strategy of the United States of America articulated that the “United States must marshal the will and capabilities to compete and prevent unfavorable shifts in the Indo-Pacific” and that China had now emerged as a strategic competitor.[27] 

The Indo-Pacific region has undergone significant geopolitical shifts in recent years. Former US President Barack Obama’s announcement of a pivot to Asia in 2011 marked the beginning of a clear trajectory toward a potential clash between China and the United States. Since Joe Biden’s election in 2020, with his “America must lead again” ideology, the United States has pursued various diplomatic and strategic initiatives, including revitalizing the Quadrilateral Security Dialogue (Quad), establishing AUKUS (a trilateral security agreement involving Australia and the United Kingdom), and introducing the Indo-Pacific Economic Framework (IPEF).[28]

Meanwhile, China has actively sought to expand its regional influence through initiatives like the Belt and Road Initiative (BRI), characterized by substantial infrastructure investments aimed at fostering trade and enhancing potential security ties with neighboring countries. China's assertiveness in territorial disputes—particularly in the South China Sea, the Taiwan Strait, and its border with India—has been backed by increased military expenditure and a rise in domestic nationalism. These developments have also seen China making efforts to exert greater influence in the South Pacific region.

Consequently, the Indo-Pacific space has become a geopolitical setting that is increasingly less amenable to more ambitious forms of hedging. It is an area without an agreed security architecture (thus increasingly anarchic), with rising bipolarity (although the United States still holds a significant power advantage over China), and growing levels of enmity (despite Sino-American trade relations remaining quite interdependent for now). This region is increasingly referred to as the ground zero of a new Cold War. While there are strong material and ideational reasons for why that assertion is hyperbolic, it is undeniable that psychologically, China and the United States are falling into the trap of seeing each other as unequivocal enemies.

For the sub-great powers caught in the middle, this is likely to create significant foreign policy headaches and further shrink the room for hedging, leading to more conventional balancing or bandwagoning choices. However, the geopolitical environment of the Indo-Pacific is not homogenous and affects states differently depending on their proximity to perceived security threats. The Indo-Pacific should be seen as a constellation of different regions linked together rather than a single, unified region.[29]

Consequently, the geopolitics of the Indo-Pacific looks vastly different from the vantage point of Singapore, which resides in Southeast Asia close to China, compared to New Zealand, which is on the outskirts of the Indo-Pacific, far from China and the major geopolitical flashpoints. The Singapore model has gained popularity in foreign policy debates as something New Zealand should consider emulating.[30] However, considering New Zealand’s relative geopolitical position compared to other states is essential when evaluating the utility of other states’ foreign policies for New Zealand.

Geopolitical proximity helps explain why New Zealand (and Australia) had more room in the early 2010s to significantly grow their trade with China compared to ASEAN states that had to be more cautious and security-conscious due to their greater geopolitical proximity. New Zealand initially tried to ignore the growth of the Indo-Pacific concept. In 2018, then-Foreign Minister Winston Peters stated, “An Indo-Pacific configuration makes a lot of sense for some countries—certainly for Australia which has one coast on the Indian Ocean; and for India, bound into Asia by history, geography, and commerce. However, the term ‘Asia Pacific’ resonates with New Zealanders because of our own geography. This is consistent with—and indeed complementary to—our partners’ policies.”[31]

By 2019, however, New Zealand officially adopted the Indo-Pacific concept in press releases, speeches, and strategy papers. As David Scott argues, New Zealand sought “Indo-Pacific cooperation” with Japan, the United States, India, and Australia “over shared concerns about China.”[32] Ardern visited Washington in 2022 and in a joint statement with Joseph Biden, New Zealand and the US acknowledged that “as the security environment in the Indo-Pacific evolves, so must our defense cooperation” as well as a need for “shared commitment among New Zealand and AUKUS partners to the peace and stability of the Indo-Pacific region.”[33]

However, the adoption of the Indo-Pacific concept in Wellington had less to do with China's behavior and more with macrosecuritization efforts from Washington, Canberra, and Tokyo.[34] At the heart of the Indo-Pacific concept is the idea that the free and open Indo-Pacific (FOIP) is under existential threat from China's actions. This aligned with Wellington’s rising concerns about China and fed into a more existential concern for New Zealand: the end of the rules-based international order.

While New Zealand has few serious geopolitical concerns due to its geographic position, maintaining trade is arguably its foremost security concern, especially as trade accounts for roughly 49 percent of its gross domestic product.[35] Jason Young argues that New Zealand’s identity as a small trading nation is embedded in its ontological security-seeking and that any threat to the status quo is seen as a threat to the very identity of New Zealand.[36] For securitization to be successful, the highlighted threat needs to be seen as credible. China’s growing assertiveness, both material and rhetorical, has certainly helped the macrosecuritization efforts of the United States and its allies.

Under Xi Jinping's leadership, a key strategic narrative for China has been to “signal the wider world that it can no longer be bullied and that it deserves respect.” While this might resonate in the non-Western world, which has also suffered under Western imperialism, it potentially leaves the West perceiving China as seeking revenge for past wrongdoings.[37] In other words, China’s defensiveness and wolf warrior diplomacy help confirm the caricature at the heart of Indo-Pacific macrosecuritization.

New Zealand’s choice to adopt the Indo-Pacific concept did not immediately end its asymmetrical hedge, but it did set a different lens for viewing New Zealand’s regional geopolitical setting. By adopting the Indo-Pacific concept, New Zealand inadvertently brought significantly more geopolitical pressures on itself and accelerated the shrinking of its room for hedging because it has firmly inserted itself into the Indo-Pacific security constellation.[38]

New Zealand’s Indo-Pacific Outlook Post-Ardern

In late 2023, the Sixth National Government was elected to power in New Zealand, with Christopher Luxon taking over as prime minister and Winston Peters returning as foreign minister (he also served as foreign minister during Ardern’s first term from 2017 to 2020). The new government inherited a significantly more difficult geopolitical setting than Ardern did in 2017. China is no longer seen as a comprehensive strategic partnership but rather a troublesome partner, one on which New Zealand is too dependent for trade. Furthermore, New Zealand has become more pessimistic about the geopolitical situation developing in the Indo-Pacific and has increasingly looked to the United States for security cooperation, a trend that began during Ardern’s second term.

Yet, despite a cooling in the relationship with China since 2017, China still ranked as New Zealand’s most important trading partner, and as of late 2023, New Zealand was still firmly entrenched in an asymmetrical hedge. This is not to say that New Zealand hasn’t taken steps to address this. Trade diversification efforts to lessen New Zealand’s reliance on China as a market have ramped up noticeably over the last decade. In 2018, New Zealand signed on to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a mega-regional FTA that includes 11 Indo-Pacific partners: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, Vietnam, and New Zealand. Furthermore, in 2023 and 2024 respectively, FTAs with the United Kingdom and the European Union came into force.

Trade diversification, in general, takes time, but given the geographical distance to the UK and the EU (and in the EU’s case, the terms of the agreement), the prospects for these FTAs to help diversify trade remain a point of significant skepticism.[39] Consequently, in the first six months since the Sixth National Government took over, there has been little obvious material change in how New Zealand engages with China. However, rhetorical changes can be observed.

First, New Zealand has scrapped the “taniwha and dragon” framework that Ardern and former Foreign Minister Nanaia Mahuta regularly used.[40] This is part of a broader move away from what was labeled a “Maori foreign policy,” guided by key Māori principles (tikanga), such as kindness (manaakitanga), connectedness (whanaungatanga), shared aspirations (kotahitanga), and intergenerational stewardship (kaitiakitanga).[41] Second, China has been more overtly identified as a threat. In the 2024 New Zealand’s Security Threat Environment report released by the Security Intelligence Service (SIS), China was explicitly labeled a “complex intelligence concern.” In previous reports, the SIS was more likely to imply the threat of China than outrightly state it.[42] The current foreign minister, Winston Peters, has also not been shy in calling China out, especially over allegations of cyberattacks.[43]

New Zealand has been far more strategically proactive in its engagement with the US and Australia. The zenith of this engagement has been the serious ramping up of discussions about New Zealand participating in AUKUS, mostly around joining Pillar II. In the first eight months of 2024, New Zealand officials discussed AUKUS with both Australia and the United States. A joint US–NZ declaration stated, “We share the view that arrangements such as the Quad, AUKUS, and the Indo-Pacific Economic Framework for Prosperity contribute to peace, security, and prosperity in the Indo-Pacific and see powerful reasons for New Zealand engaging practically with them, as and when all parties deem it appropriate.”[44]

In a speech in Port Moresby, Papua New Guinea, Peters remarked that “the Pacific remains a core priority for New Zealand’s international relations” but that “we are seeing is, in effect, a collision of the Pacific and the Indo-Pacific” and “we welcome new architecture like AUKUS or the Quad” to complement “what already exists.”[45] New Zealand’s prime minister, Christopher Luxon, has also voiced support for exploring participation in AUKUS. On a bilateral visit to Sydney in August 2024, Luxon stated that “our strategic outlook is deteriorating more rapidly than at any time in our lifetimes” and “we welcome AUKUS as an initiative to enhance regional security and stability.”[46] Although he stressed that “New Zealand is not involved in Pillar I of AUKUS,” Luxon did state that “New Zealand is exploring with the AUKUS partners how we could potentially participate in Pillar II.”[47]

New Zealand’s flirtation with AUKUS has not gone unnoticed in Beijing. China’s ambassador to New Zealand, Wang Xiaolong, stated that::

Like many other peace-loving countries in the region, China has grave concerns over any attempt to enlarge and upgrade the AUKUS defence cooperation. . . . this move, driven by the Cold War mentality, might induce a new round of the arms race and lead to increased tension in the region and beyond. It will upset the strategic balance in the region and constitute a new material threat to its countries. . . . participation in Pillar II would compromise New Zealand’s ability to maintain a principled, independent voice.[48]

New Zealand joining AUKUS—even just the Pillar II aspect—would likely signal an end to its mature relationship with China and change the nature of its asymmetrical hedge. This would leave New Zealand pursuing a more conventional approach, similar to Australia. While trade with China would remain important, New Zealand would take steps to lower its dependence on China as a market, further integrating itself within the US-led Indo-Pacific security architecture.

Participating in AUKUS could open the door to New Zealand participating in the Quad or a variant of it, and even potentially resurrecting the ANZUS alliance. This would be unequivocal balancing behavior, solidifying New Zealand's relationship with the dominant power (the US) against the revisionist power (China) to preserve the status quo (the US-led security architecture). New Zealand’s recent flirtations with AUKUS have raised questions about the extent of its independent foreign policy.

The notion of New Zealand's independent foreign policy dates back to the 1930s, based on the idea that New Zealand should avoid  “loyal dissent or loyal opposition” on international issues and strive to pursue “a progressive critique of an existing pattern.”[49] Over time, this notion—conceptualized as a role identity—became embedded within New Zealand’s strategic culture. New Zealand’s decision to stand up to the United States in the 1980s is often cited as irrefutable evidence of this independence in practice.

Indeed, New Zealand has demonstrated an ability to take independent stances at times. In the recent past, its mature relationship with China and its unwillingness to join a Five Eyes-led backlash against Beijing is another example of an independent stance. However, there have been instances where New Zealand has failed to take independent stances. For instance, it supported the Global War on Terror, sending personnel to both Afghanistan (2001–2021) and Iraq (2003–2007). In 2015, then-Prime Minister John Key candidly responded to criticism of New Zealand providing military assistance to Iraq to help the United States curb the rise of the Islamic State (ISIS) as “the price of the club,” the club being the “Five Eyes intelligence alliance.”[50]

One of the loudest and most prominent voices in the debate around AUKUS and New Zealand’s so-called independent foreign policy is former Prime Minister Helen Clark and former leader of the opposition Don Brash. For Clark and Brash, New Zealand’s recent foreign policy developments signal the potential end of its independent foreign policy as the Sixth National Government seems determined to “throw in our lot with America’s attempt to slow China’s economic rise and keep it tightly hemmed in by American forces in South Korea, Japan, Guam, the Philippines, Papua New Guinea and Australia.”[51]

For Clark, Brash, and others arguing for “New Zealand as an independent power,” New Zealand has typically “made decisions based on our own values and priorities.”[52] However, this argument overlooks the geopolitical room (the independent variable in the theoretical underpinnings of this article) available at the time foreign policy decisions were made.

Therefore, based on the theoretical position of this article, the apparent recent change in course should not be seen as New Zealand moving away from its independent foreign policy. Rather, it demonstrates that New Zealand’s independent foreign policy role identity is more appropriately situated as an intervening variable to its foreign policy making. This identity acts as a cognitive framework for decision makers, a filter to make sense of the international system and how New Zealand should act within it. Moments of independence should not be conflated with a consistent independent foreign policy. At no point in New Zealand’s history has it existed independently outside of the Anglosphere security architecture. Even when New Zealand was suspended from ANZUS, it remained in Five Eyes, and its ANZUS obligations to Australia (and vice-versa) remained legally binding.

Additionally, some observers might point to the change in government in 2023 as the key driver of New Zealand’s altering foreign policy grand strategy, particularly as AUKUS has been firmly on the table only since the change of government. However, the main drivers are found in the changing geopolitical dynamics of the Indo-Pacific. After all, it was the choice of the Sixth Labour Government in 2019 to formally adopt an Indo-Pacific outlook, and it was former Minister of Defence Andrew Little who first raised the idea of joining AUKUS. The decision to adopt the Indo-Pacific concept thrust New Zealand from the relative geopolitical calm of the previous three decades into a deteriorating Indo-Pacific security constellation, one that is increasingly anarchic with growing levels of enmity. Consequently, the regional security setting that New Zealand resides in is a more convincing independent variable in its foreign policy making.

For example, New Zealand’s decision to challenge the United States in the 1980s came with relatively minimal costs. By that point in the Cold War, there were few Pacific threats, given that the Vietnam War had been over for a decade and China and the United States had embarked on a process of rapprochement. There were simply no serious threats to New Zealand’s security, allowing it to take a moral stand, even at the cost of hurting its security relationship with the United States.

However, with New Zealand choosing to adopt the Indo-Pacific concept, the regional security setting has significantly altered. This shift helps explain why New Zealand has felt it necessary to seriously consider joining AUKUS and take steps to move away from its asymmetrical hedge by lessening its dependence on China. New Zealand now views itself as existing in a regional setting where great-power competition is intense. According to its ministers of defense and foreign affairs and trade, even the threat of World War III needs to be taken seriously.[53]

Discussion: Can the Indo-Pacific Be Desecuritized in New Zealand?

The securitization of China as a threat to New Zealand’s material and ontological security significantly impacts foreign policy makers’ perceptions of regional security in New Zealand. This development is hard to reverse in the short-to-medium term. Desecuritization efforts from China are likely to fail because New Zealand is firmly embedded within the US-led security architecture and remains a core member of the Five Eyes intelligence alliance.[54] Consequently, China’s efforts to characterize the Unite States’ Indo-Pacific policies as suffering from a “Cold War mentality” are unlikely to gain traction in Wellington.[55]

However, other forms of desecuritization might have more impact in New Zealand. For instance, Pacific Island Countries (PIC) have taken a proactive role in offering their vision of how the Pacific should be ordered. Many PICs reject the Indo-Pacific concept and fear the emergence of great-power politics between China and the United States as hindering their agency and shifting focus away from what is widely considered the most pressing existential threat to the region: climate change.[56]

Under the auspices of the Pacific Islands Forum, PICs have forwarded the Blue Pacific concept, a non-Western and non-anthropocentric perspective of the Pacific that draws heavily from Polynesian, Micronesian, and Melanesian ontologies and epistemologies. As Tuvalu’s then-foreign minister, Simon Kofe, said in 2022, “if we're truly serious about world peace, and we're really serious about addressing climate change, then there really is no good guys and bad guys. . . . We need China on board. We need the US on board.”[57]

New Zealand’s relationship with the Pacific is sacrosanct in its foreign policy. The Pacific—formerly colloquially known as the “South Pacific”—has long been central to New Zealand’s foreign policy.[58] New Zealand previously controlled Western Samoa, seizing it from Germany in 1914. Niue and the Cook Islands, although no longer part of New Zealand, remain in free association with New Zealand.[59] Only Tokelau remains under New Zealand’s sovereign control.

New Zealand has been instrumental in helping set up key Pacific institutions, most notably the Pacific Islands Forum.[60] Furthermore, New Zealand has consistently been one of the largest aid donors to the Pacific, currently trailing only Australia and the United States as a “grantor.”[61] Despite adopting the Indo-Pacific concept, the Pacific—geographically the South Pacific—remains the most pressing concern in Wellington. To this end, New Zealand has sought to ensure that the PICs are not forgotten in the Indo-Pacific discourse. As then-Foreign Minister Mahuta stated in 2023:

our interests are shaped by the great blue continent—Te Moana nui a Kiwa, our connections are deep and longstanding. So the Pacific is a primary consideration for NZ as we think about our place in the world and what really matters to our sense of well-being. The centrality of Pacific regional architecture matters and need to be better understood. We cannot reference the Indo-Pacific geo-strategic challenges and the Pacific ends up being a footnote.[62]

Even under the Sixth National Government, despite moving away from its Maori foreign policy framework, the Pacific remains the most important foreign policy concern for New Zealand. In Luxon’s words, “we want to be great partners to our Pacific friends . . . that means listening to their priorities and partnering with them on real solutions.”[63]

At this vantage point, it is clear that New Zealand’s foreign policy grand strategy is experiencing a significant shift away from the asymmetrical hedging strategy that defined the 2010s toward something more akin to a conventional balancing strategy. New Zealand’s adoption of the Indo-Pacific concept has shifted its strategic calculus towards a more pessimistic view of its regional security setting while adopting a more cautious and suspicious stance towards China.

Although the Pacific remains central to New Zealand’s foreign policy and the PICs may work to desecuritize the Indo-Pacific to some extent, New Zealand’s broader foreign policy strategy is experiencing a notable shift. This makes previously unthinkable outcomes, like participating in AUKUS, appear as extraordinary but necessary steps to combat the perceived existential challenges emerging from China’s rise and assertiveness. ♦


Dr. Nicholas Ross Smith

Dr. Smith is a senior research fellow at the University of Canterbury, New Zealand. His research coalesces around the regional implications of great-power rivalry and how relatively smaller states seek to navigate changing geopolitical environments. He is the author of two books and more than two dozen peer reviewed journal articles, including articles in International Affairs, The Journal of Politics, and Cambridge Review of International Affairs. nick.smith@canterbury.ac.nz


Notes

[1] Van Jackson, “Power, Trust, and Network Complexity: Three Logics of Hedging in Asian Security,” International Relations of the Asia-Pacific 14, no. 3 (September 2014): 331–56, https://doi.org/; Cheng-Chwee Kuik, “How Do Weaker States Hedge? Unpacking ASEAN States’ Alignment Behavior towards China,” Journal of Contemporary China 25, no. 100 (2016): 500–14; and Alexander Korolev, “Shrinking Room for Hedging: System-Unit Dynamics and Behavior of Smaller Powers,” International Relations of the Asia-Pacific 19, no. 3 (September 2019): 419–52, https://doi.org/.

[2] Denny Roy, “Southeast Asia and China: Balancing or Bandwagoning?,” Contemporary Southeast Asia 27, no. 2 (August 2005): 305–22, https://www.jstor.org/; and Evelyn Goh, “Meeting the China Challenge: The US in Southeast Asian Regional Security Strategies,” Policy Studies, no. 16 (2005).

[3] Nicholas Ross Smith, “When Hedging Goes Wrong: Lessons from Ukraine’s Failed Hedge of the EU and Russia,” Global Policy 11, no. 5 (2020): 588–97, https://doi.org/.

[4] Goh, “Meeting the China Challenge,” 3.

[5] Goh, “Meeting the China Challenge,” 2.

[6] Nicholas Ross Smith, “New Zealand’s Grand Strategic Options as the Room for Hedging Continues to Shrink,” Comparative Strategy 41, no. 3 (2022): 314–27, https://doi.org/.

[7] Darren J. Lim and Zack Cooper, “Reassessing Hedging: The Logic of Alignment in East Asia,” Security Studies 24, no. 4 (2015), 698, https://doi.org/.

[8] Reuben Steff and Francesca Dodd-Parr, “Examining the Immanent Dilemma of Small States in the Asia-Pacific: The Strategic Triangle between New Zealand, the US and China,” Pacific Review 32, no. 1 (2019): 90–112, https://doi.org/; and Smith, “New Zealand’s Grand Strategic Options.”

[9] Helen Clark, “Address to Beijing Business Lunch” (speech, Office of the Prime Minister, 31 May 2005), https://www.beehive.govt.nz/.

[10] United Nations, “UN Comtrade Database,” 2024, https://comtrade.un.org/.

[11] Nicholas Ross Smith, “The Taniwha and the Dragon: New Zealand’s Relationship with China under the Ardern Government at a Time of Growing Geopolitical Uncertainty,” in New Zealand’s Foreign Policy under the Jacinda Ardern Government, ed. Robert G Patman et al. (Singapore: World Scientific, 2023), 43–62, https://doi.org/.

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[15] OEC, “Observatory for Economic Complexity,” 2024, https://oec.world/.

[16] Michael D. Cohen, “The Origins of the ANZUS Alliance,” Australian Journal of International Affairs, 29 August 2024, 1–6, https://doi.org/.

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[19] Malcolm McKinnon, Independence and Foreign Policy: New Zealand in the World Since 1935 (Auckland: Auckland University Press, 1993).

[20] László Szöllősi-Cira, New Zealand’s Global Responsibility (Singapore: Palgrave Macmillan, 2022), https://doi.org/.

[21] David A. Lake, “Regional Hierarchy: Authority and Local International Order,” Review of International Studies 35, no. S1 (February 2009), 35, https://www.jstor.org/.

[22] Marcel de Haas, “Relations of Central Asia with the Shanghai Cooperation Organization and the Collective Security Treaty Organization,” Journal of Slavic Military Studies 30, no. 1 (2017): 1–16, https://doi.org/.

[23] Mariya Y. Omelicheva and Ruoxi Du, “Kazakhstan’s Multi-Vectorism and Sino-Russian Relations,” Insight Turkey 20, no. 4 (2018): 95–110, https://www.insightturkey.com/.

[24] Finn Hogan, “NZ could be a ‘bridge’ between US and China—David Parker,” Newshub, 17 November 2018, https://www.newshub.co.nz/.

[25] Steve Mollman, “New Zealand Risks Becoming a ‘Strategic Nincompoop’ as China Woos Tiny Pacific Islands,” Quartz, 2 March 2018, https://qz.com/.

[26] Strategic Defence Policy Statement (Wellington: Ministry of Defence, 6 April 2018), https://www.defence.govt.nz/.

[27] National Security Strategy of the United States of America (Washington: The White House, 18 December 2017), https://trumpwhitehouse.archives.gov/.

[28] Joseph R. Biden, Jr., “Why America Must Lead Again: Recusing US Foreign Policy after Trump,” Foreign Affairs 99, no. 1 (March/April 2020): 64–76, https://www.foreignaffairs.com/.

[29] Paul Bacon and Nicholas Ross Smith, “The Indo-Pacific: Not a Region nor Super-Region but a Macro-Securitization Construct” (working paper, ResearchGate, October 2024), https://www.researchgate.net/.

[30] Stephen Jacobi, “Singapore Points the Way for NZ to Avoid Geopolitical Conflict,” Newsroom, 22 June 2023, https://newsroom.co.nz/.

[31] Winston Peters, “Next Steps” (speech, Ministry of Foreign Affairs, 29 June 2018), https://www.beehive.govt.nz/.

[32] David Scott, “New Zealand Picks up on the Indo-Pacific,” Asia Pacific Bulletin, 18 Maarch 2020, https://www.eastwestcenter.org/.

[33] Joseph Biden and Jacinda Ardern, “United States – Aotearoa New Zealand Joint Statement” (joint statement, The White House, 31 May 2022), https://www.whitehouse.gov/.

[34] Bacon and Smith, “The Indo-Pacific.”

[35] Nicholas Ross Smith and Bonnie Holster, “New Zealand’s ‘Māori Foreign Policy’ and China: A Case of Instrumental Relationality?,” International Affairs 99, no. 4 (July 2023): 1575–93, https://doi.org/.

[36] Jason Young, “Seeking Ontological Security through the Rise of China: New Zealand as a Small Trading Nation,” Pacific Review 30, no. 4 (2017): 513–30, https://doi.org/.

[37] Nicholas Ross Smith and Tracey Fallon, “From Positive to Negative Historical Statecraft: The Shifting Use of History in China’s Diplomacy,” Hague Journal of Diplomacy 19, no. 2 (2024), 333, https://doi.org/.

[38] Bacon and Smith, “The Indo-Pacific.”

[39] Jenée Tibshraeny, “NZ All Talk, No Action on Diversifying Exports beyond China,” New Zealand Herald, 16 June 2022, https://www.nzherald.co.nz/.

[40] Smith and Holster, “New Zealand’s ‘Māori Foreign Policy’ and China”; and Nina Hall and Rhieve Grey, “New Zealand Abandons Indigenous Rights and Pacific Priorities in Foreign Policy,” The Diplomat, 21 December 2023, https://thediplomat.com/.

[41] Nicholas Ross Smith and Bonnie Holster, “New Zealand: Can an Indigenous Foreign Policy Deliver?,” CSDS Policy Brief, no. 21 (2022), https://csds.vub.be/.

[42] New Zealand’s Security Threat Environment (Wellington: New Zealand Security Intelligence Service, 2024), https://www.nzsis.govt.nz/.

[43] Molly Swift, “Winston Peters Calls out China’s Cyber-Attacks during Speech,” Newshub, 5 March 2024, https://www.newshub.co.nz/.

[44] Antony J. Blinken and Winston Peters, “Joint Declaration by United States Secretary of State the Honorable Antony J. Blinken and New Zealand Minister of Foreign Affairs the Right Honourable Winston Peters” (joint statement, US Department of State, 11 April 2024, https://www.state.gov/.

[45] Winston Peters, “The Pacific Family of Nations—the Changing Security Outlook” (speech, Ministry of Foreign Affairs, 13 May 2024), https://www.beehive.govt.nz/.

[46] Christopher Luxon, “Foreign Policy Speech to the Lowy Institute” (speech, Office of the Prime Minister, 15 August 2024), https://www.beehive.govt.nz/.

[47] Luxon, “Foreign Policy Speech to the Lowy Institute.”

[48] Wang Xiaolong, “Why China Has a Grave Concern over AUKUS, Even Pillar II,” Newsroom, 14 April 2024, https://newsroom.co.nz/.

[49] McKinnon, Independence and Foreign Policy.

[50] Audrey Young, “Prime Minister John Key: Isis Fight ‘Price of the Club,’” New Zealand Herald, 20 January 2015, https://www.nzherald.co.nz/.

[51] Helen Clark and Don Brash, “Helen Clark and Don Brash: Aukus—NZ Must Not Abandon Our Independent Foreign Policy,” New Zealand Herald, 12 February 2024, https://www.nzherald.co.nz/.

[52] Helen Clark and Marco de Jong, “NZ’s Independent Foreign Policy Hugely Compromised,” Newsroom, 10 July 2024, https://newsroom.co.nz/.

[53] Thomas Manch, “Judith Collins, Winston Peters Are Concerned about World War III,” The Post, 25 June 2024, https://www.thepost.co.nz/.

[54] Nicholas Ross Smith and Lauren Bland, “The AUKUS Debate in New Zealand Misses the Big Picture,” Australian Journal of International Affairs 78, no. 5 (August 2024), https://doi.org/.

[55] Smith and Fallon, “From Positive to Negative Historical Statecraft.”

[56] Joanne Wallis et al., “Security Cooperation in the Pacific Islands: Architecture, Complex, Community, or Something Else?,” International Relations of the Asia-Pacific 23, no. 2 (May 2023): 263–96, https://doi.org/.

[57] Lucy Craymer, “Tuvalu Minister Says Both China, U.S. Needed for Climate Change Action,” Reuters, 24 August 2022, https://www.reuters.com/.  

[58] Anna Powles and Michael Powles, “New Zealand’s Pacific Policies-Time for a Reset?,” New Zealand International Review 42, no. 2 (March/April 2017): 16–21, https://www.jstor.org/.

[59] Zbigniew Dumieński, “Shared Citizenship and Sovereignty: The Case of the Cook Islands’ and Niue’s Relationship with New Zealand,” in The Palgrave Handbook of Ethnicity, ed. Steven Ratuva (Singapore: Springer, 2019), 221–46, https://doi.org/.

[60] Stephanie Lawson, “Australia, New Zealand and the Pacific Islands Forum: A Critical Review,” Commonwealth & Comparative Politics 55, no. 2 (2017): 214–35, https://doi.org/.

[61] “Pacific Aid Map,” Lowy Institute, 2023, https://pacificaidmap.lowyinstitute.org/.

[62] Nanaia Mahuta, “Why the Pacific way matters for regional security” (speech, Ministry of Foreign Affairs, 3 May 2023), https://www.beehive.govt.nz/.

[63] Luxon, “Foreign Policy Speech to the Lowy Institute.”

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