Why a strong China-New Zealand partnership is important

By: Azhar Azam

On June 13, Chinese Premier Li Qiang met New Zealand Prime Minister Christopher Luxon and the two leaders acknowledged the positive development in the bilateral relationship. They also agreed to build greater understanding through regular dialogue on foreign affairs, trade and economy, agriculture and other areas, reaffirming the importance of consultation to address regional and global challenges.

A joint statement of the outcomes of the two leaders' meeting was released later Thursday. China announced it will include New Zealand in the list of unilateral visa-free countries. Ahead of Li's visit, Luxon had said the trip was a "valuable opportunity" for exchanges, describing New Zealand ties with China as "significant" and "resilient."

Beijing is Wellington's largest export destination and New Zealand has been one of China's closest partners in the region. Economy is Luxon's top priority and he's confident that trade with China will support his government's goal of increasing exports twofold over the next decade.

The progress in the development of bilateral relations was applauded by New Zealand Trade Minister Todd McClay, who during Chinese Foreign Minister Wang Yi's visit this March described the upgraded bilateral free trade agreement as an "important example" of expanding Beijing-Wellington partnership in economy, trade and personnel exchanges amid rising trade barriers and uncertainties.

Wellington is also a member of the Regional Comprehensive Economic Partnership. The agreement, seen as a commitment to peace, stability and prosperity, is strengthening trade and economic integration in the Asia-Pacific and is projected to add $186 billion to the world economy and $2 billion to New Zealand's GDP in future.

The prospects are breathtaking, yet in order to tap the real potential of the landmark treaty, regional peace and stability must be safeguarded against U.S.-led efforts to push the member states at each other's throat as it urges countries across the region to join hands in "maintaining peace" in the Asia-Pacific.

Li's visit coincides with 10 years of the China-New Zealand comprehensive strategic partnership. This high-level engagement shows both sides' willingness to set aside differences and that they are committed to deepening relations, which would help to better understand each other's viewpoints on regional security and other issues.

For instance, Wellington is mulling to join the AUKUS, a trilateral nuclear alliance of Australia, UK and the U.S. designed to imperil regional peace by stoking tensions and triggering a nuclear arms race in the Asia-Pacific. A recent comment by U.S. Deputy Secretary of State Kurt Campbell signals the pact seeks to wheedle regional nations into doing something that will have serious repercussions for regional peace, stability and prosperity.

Former New Zealand Prime Minister Helen Clark has warned that joining the AUKUS would undermine New Zealand's independent foreign policy. Others have questioned the military alliance's aim of containing China and its impact on New Zealand's nuclear-free policy, regarding it as an effort to establish a new regional security grouping.

Any threat to China will inevitably weaken the regional economy and peace as China, a significant international player, is deeply integrated into the regional and global economy. Any attempt to inhibit its growth will negatively affect the economies of other countries, including New Zealand.

Li's visit is an opportunity for New Zealand to explore "massive areas of cooperation;" it could help promote regional peace through discussion on multiple regional and global challenges such as the growing number of security alliances in the region, climate change, pandemics and U.S. exceptionalism.

Beijing-Wellington bilateral trade, according to New Zealand, has leapfrogged to over $23 billion for the year ending March 2024. China's growing emphasis on a healthy lifestyle, outdoor activities and high-quality dairy, meat and innovative products can also manifest in many positive outcomes for Wellington. It can push demands for New Zealand products and it can also promote ecotourism.

As described by Luxon, the "significant economic relationship" between China and New Zealand, benefiting the people and economies of the two countries, seeks a cohesive approach to regional stability and prosperity that will reinforce the bilateral comprehensive strategic partnership and contribute to regional peace and growth.

*My article that first appeared at CGTN:

Sharif's resolve to follow China's model sets trajectory of robust Sino-Pak ties

By: Azhar Azam

Pakistan's Prime Minister Shehbaz Sharif has wrapped up his official visit to China. During this visit, Sharif stressed enhancing business-to-business (B2B) cooperation, assuring Chinese investors of all-out facilitation and foolproof security in Pakistan and highlighting bilateral trade and investment potential in areas such as technology, industry, agriculture, mining, steel, textiles and renewable energy.

Lauding the Chinese model of development and vowing to replicate it in Pakistan, Sharif said, "I will go back to Pakistan with this resolve…we will follow this model of great economic transformation in Pakistan." His pledge was accompanied by the signing of 32 memorandums of understanding, billed as a "historic moment" of private-sector cooperation.

Regardless of rivalries, leaders of all political parties in Pakistan have described the relationship with China as the cornerstone of the country's foreign policy, and wanted to deepen the strategic ties with its closest partner, showing willingness to learn from China's experience to alleviate poverty and foster socioeconomic development, and expressed support to the one-China principle.

Pakistan's economy has been in the doldrums for some time. Sharif's visit to Shenzhen and Xi'an – featuring meetings with leading Chinese companies engaged in oil and gas, energy, information and communication, and emerging technologies – provides an opportunity for Pakistan to attract investment from China and bolster its gloomy economic outlook.

Upgrading the China-Pakistan Economic Corridor (CPEC) is Sharif's key focus. The flagship project of the Belt and Road Initiative has been contributing to infrastructure development, energy generation, and job creation in the country.

The CPEC is estimated to have brought $25.4 billion in direct investments to Pakistan. These investments have been translated into 236,000 jobs, 510 kilometers of roads, over 8,000 megawatts of electricity and 886 kilometers of core transmission network, strengthening Pakistan's socio-economic development and the China-Pakistan all-weather comprehensive strategic cooperative partnership.

Admitting the CPEC had certainly improved Pakistan's transportation and energy sectors, and drastically reduced power outages, some argue it didn't make any impact on Islamabad's productivity and growth and rather burdened the country with debt. Such analysis overlooks several factors that have exacerbated Pakistan's economic and debt crisis.

For instance, a recent World Bank report noted that Pakistan faced an imminent economic crisis due to the impacts of "inadequate macroeconomic management," surging commodity prices, global monetary tightening, catastrophic flooding in 2022, and political uncertainty. Amid inflation of as high as 40 percent in 2023 with foreign reserves falling to a dangerously low levels, China yet again rescued Pakistan's economy from plunging into an economic crisis by rolling over its debt of an estimated of about $8 billion.

China isn't responsible for the Pakistan debt crisis either since it accounts for just 13 percent or less than $17 billion of Pakistan's $130.4 billion total external debt as of March 2024. Independent estimates too quote the same figure (13 percent), emphasizing Islamabad's problem is primarily domestic debt, which comprises much of debt stock and interest burden. Beijing clearly has no role in ballooning Islamabad's foreign debt.

The World Bank predicts Pakistan's growth at 1.8 percent in 2023-24, which it says is insufficient to reduce poverty with 40 percent of Pakistanis living below the poverty line. While it urges Islamabad to implement an articulated and credible structural reform program to improve the economic outlook, Sharif's focus on upgrading the CPEC, advancing trade and investment and deepening cooperation on areas such as energy, space, IT and defense and security as well as strengthening B2B cooperation could be critical to push the economic growth.

After reducing energy and infrastructure gaps, the CPEC is now adopting new concepts such as technology and green development. Agreements on space cooperation, digital economy, mining and industry and five new corridors – Growth Corridor, Economic Development Projects Corridor, Innovation Corridor, Green Corridor, and Regional Connectivity Corridor – containing new growth drivers such as industrialization, innovation, green energy and agriculture, mines and minerals and advancing regional integration, indicate that Pakistan is keen to upgrade the CPEC to stimulate the economy with China's support.

With Pakistan's maiden moon satellite last month riding China's rocket and entering the moon's orbit, leaving it only the sixth country to launch the first-ever moon satellite, the China-Pakistan friendship has reached outer space. This will further Pakistan's ambitions to transform itself into a digital and technology-advanced country, uplifting socioeconomic development.

Over the recent years, several Chinese nationals have been killed in Pakistan. Just this March, five of them deployed to the Dasu Hydropower Project in Pakistan lost their lives in a terrorist attack. As thousands of Chinese are working on CPEC projects, it is important to strengthen the security cooperation that will both contribute to the project's development and enhance Pakistan's capability to eradicate terrorism. Regional forums such as the Shanghai Cooperation Organization could also play an important role in forging a common response to counter terror threats and safeguard regional security.

As Sharif continues to emulate Beijing's successful model of a "virtuous cycle of development and prosperity" in his country, his China visit will reinforce his determination, setting the future trajectory of a much stronger China-Pakistan friendship.

*My article that first appeared at CGTN:

Malaysia is smartly using its non-aligned policy

Azhar Azam

Like many regional states, Malaysia’s “prosper thy neighbor” foreign policy centers on peace and non-alignment and promotes South-South cooperation among the developing world. This neutral approach in the last 50 years has leveraged Kuala Lumpur to forge “rich and fruitful partnership” with Beijing and extract benefits for its people and economy.

Over the last decade, this policy has helped Malaysia to beef up its relations with China to comprehensive strategic partnership, considered as one of the “most cordial and productive” relationships in Asia-Pacific. An agreement to exercise self-restraint and settle differences in South China Sea peacefully further reflected its approach to prevent territorial issues from thwarting bilateral ties and aggrandize its economic prowess by taking advantage of the world’s second largest economy.

Anwar is a staunch opponent of western efforts to contain China for its potential to aggravate the crisis and sow discord in the region. "The obstacles being placed against China's economic and technological advancement will only further accentuate such grievances,” he said in March, seeing this as an attempt to deny Beijing of its “legitimate place in history.”

Rejecting the “fatalistic view” that great-power rivalry has become a structural feature of regional affairs, he has been and continues to make efforts to temper this deadly phenomenon over its likelihood of jeopardizing regional economy and peace by advocating and pursuing a dovish and independent policy to the western world.

In Australia, Malaysian prime minister defended his country’s relations with China stating Beijing was Kuala Lumpur’s leading investment and trading partner and his country hadn’t had the Sinophobia; Anwar in Japan recently emphasized that Beijing was “too close, too important and too strategic to ignore” for regional states, urging America to abandon protectionism and respect competitiveness.

Bilateral trade between China and Malaysia in the first four months of 2024 rose 5.9% to over $32 billion with the country's exports to China surging by 40.5%. This strong economic relationship is evolving into greater people-to-people exchanges as tourist arrivals from China for the same period jumped 217%, making Malaysia one of the top three preferred destinations for Chinese leisure seekers.

China is also a major source of foreign direct investment in Malaysia. In 2023, Beijing was among the five largest sources of investment for Kuala Lumpur with over $3 billion of investments. Chinese investments in 2024 are likely to rush given Anwar during his two visits to Beijing last year witnessed the signing of several MOUs worth billions of dollars.

Through investments including the Belt and Road Initiative, China is helping build Malaysian infrastructure too. For instance, the $10.6 billion East Coast Rail Link would connect east and west coasts of Peninsular Malaysia and open up new areas of growth and development in addition to providing freight and passenger services and reducing the travel time by almost a half.

Kuala Lumpur’s ambitious New Industrial Master Plan (NIMP) 2030, which seeks to capitalize the China-US trade tensions and make Malaysia a high-tech nation and manufacturing hub, is Anwar’s priority to put his country on the path of economic and industrial rejuvenation. During his China visit, the Malaysian prime minister gained the Chinese support for the initiative and the proposed Asian Monetary Fund that will serve as a lender of last resort in the event of a regional financial crisis and, alongside other mechanisms, aspires to promote local currency in regional trade.

The NIMP envisions to nurturing high-value and innovations-driven sectors such as integrated circuit design and wafer fabrication activities and adding electrical vehicles (EVs) and renewable energy as new growth engines. It’s to fruition with Malaysia emerging as the world’s sixth largest exporter of semiconductors and a favorable destination for EV manufacturers. The European countries, wanting to export their products to China, are also moving their production to Malaysia, which gives a boost to Malaysian economic and industrial transformation.

Amid US and western efforts to hamper China’s tech growth and cooperation with Global South, Malaysia has been committed to have a dual 5G network in the country. While this decision would dismantle monopoly in the sector, Huawei’s participation in Malaysia's next-generation rollout will allow it to acquire cutting-edge technology at cost-efficient price.

Western feathers ruffled further as Telekom Malaysia and China’s ZTE Corporation last year inked an MOU to collaborate on research and development to propel innovation and digital transformation and with Malaysia’s Digital Nasional Berhad made a groundbreaking advancement in delivering unmatched speed and superior service quality to Malaysians, accelerating digitalization in the country.

Budding trade, increased inflows of Chinese investments, implementation of visa-free policies and steady progress on infrastructure and development projects in Malaysia as well as technology cooperation, people-to-people exchanges and common approach to safeguard regional economy and stability demonstrate that this partnership would play a vital role in Malaysia’s economic transformation and regional geopolitics.

Anticipating China’s rise as an economic power, Malaysia in 1974 demonstrated pragmatism by pitching itself as a non-aligned country; half a century later, Kuala Lumpur continue to hold the banner of neutrality high so that it doesn’t miss out on economic opportunities presented either by the western trade war against China or the world’s largest economy itself.

*My article (unedited) that first appeared in the Express Tribune and New Straits Times with the title "
Great-power rivalry: Malaysia stays neutral in order to seize economic opportunities"