The Belt and Road Initiative (BRI) was announced in 20131 by Chinese President Xi Jinping who subsequently described it as the “project of the century”. BRI promotes closer ties between countries through development-led trade growth. This requires a massive infrastructure construction programme complemented by bilateral commitments covering trade and investment. BRI is also regarded as a significant geostrategic initiative, which reflects China’s changing status as an economic and military power.
At the 19th National Congress of the Communist Party of China held in Beijing in October 2017 the BRI was embedded within the Chinese Constitution. This demonstrates the importance and permanence of BRI within the Chinese system.
The growth in New Zealand’s trade and investment with China has been critical to our relative economic prosperity since the Global Financial Crisis. China is New Zealand’s largest trading partner in goods and second largest trading partner when trade in services are included. The New Zealand - China Free Trade Agreement (FTA) signed in 2008 was China’s first FTA with a developed country. China is one of the world’s fastest-growing economies and its vast population and growing middle class present huge potential for New Zealand.
Engaging with BRI gives us an opportunity to protect our hard won and valuable relationship with China, a relationship that may otherwise be at risk of “preference erosion” as China is likely to focus its resource and attention on countries that are fully engaged with the Belt and Road. We also need to be alert to the implications of a fundamentally bilateral initiative, with China at the centre, for the region’s trade and economic architecture.
The New Zealand China Council (NZCC) has commissioned this report to set out a range of options to expand New Zealand’s “connectivity” with China and other countries along the Belt and Road. The options are not intended to be exhaustive but an illustrative indication of what could be developed between New Zealand and China working together under BRI.
Engaging in such an ambitious and wideranging initiative is not without risk. Potential risks are identified in the report. These need to be closely evaluated and taken into account as New Zealand develops its engagement with BRI.