The Government’s sensitivity over the relationship with China was  evident yesterday as Ministers retreated into no comments over allegations that China was threatening trade reprisals on New Zealand.

The threats emerged in the “Sunday Star Times” which claimed that highly-placed sources confirmed China was applying pressure in an attempt to sway regulators at the Ministry of Business, Innovation and Trade (MBIE) away from imposing anti-dumping or countervailing duties on cheap imported Chinese steel.

The paper also quoted “unscreened” comments from China’s Ambassador to New Zealand, Wang Lutong who said there was no issue with the imported steel quality but the embassy had been discussing the industry’s concerns with New Zealand authorities. 

Questions to MBIE Minister Steven Joyce on the issue were referred to Commerce Minister Paul Goldsmith, who would not confirm or deny whether a complaint from China had been received.

One of the sources for the Sunday Star-Times report, Wellington lobbyist and former trade negotiator, Charles Finny, then wrote a piece in the same newspaper saying that anti-dumping cases involving China had occurred from time to time but had not in the past resulted in threats of retaliation of the type that was being alleged.

“Our Trade Minister met the Chinese Commerce Minister on Sunday and my sources assure me that this matter was not raised,’ he said.

But the silence yesterday may also mask a growing concern in Wellington that the Chinese relationship is hitting potentially troubled waters.

There was a veiled reference to this in comments the Prime Minister is reported to have made on the eve of his visit to Indonesia.

Mr Key was warning about the dangers of becoming too reliant on the Chinese market.

“I’ve long been of the view that while China represents enormous opportunities for New Zealand, and it’s plain to see how successful we’ve been in China, the risk to New Zealand will always be to replicate the concentration threat that we had when we solely exported to the UK and reverse that by solely having all our eggs in the Chinese basket,’ he said.

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“It’s not that we should be worried about the level of trade with China – in fact, it’s something to celebrate, but you wouldn’t want to get to the point where it’s solely China.”

This echoes a concern in the Beehive that any setback in the Chinese economy could have a major effect on New Zealand.

POLITIK has spoken to two senior Beehive advisers who have both expressed concerns about the immediate future of the Chinese economy and its possible impact on New Zealand.

Overall, the political relationship between New Zealand China looks to be in good shape.

Asked on “The Nation” about New Zealand’s response to the South China Sea arbitration, the Ambassador said “the South China Sea is not an issue between China and New Zealand,

“I don’t think this relationship, this greater relationship, will be affected by this issue.

“This is not an issue between China and New Zealand, and I think it’s in the mutual interest of China and New Zealand to maintain peace and stability in this region.

“China and New Zealand can disagree and disagree on some of the issues, but it doesn’t necessarily affect our good relationship.”

Perhaps the most intriguing comment over the China relationship came from NZ First Leader Winston Peters, a former Foreign Minister, who asked whether the Chinese had learned the details of the anti-dumping case being discussed within the Ministry of Business, Innovation and Employment by “listening devices”.

There is a real fear in Wellington that China can place such devices in Government offices, and POLITIK is aware of one office which plays a key role in many trading decisions and which routinely has the GCHB sweep its offices for such devices after it has been visited by a Chinese delegation.

What all this shows is that though New Zealand has clearly developed a good relationship with China, it is not an easy relationship or one that can be taken for granted.

That may well explain the reluctance to comment on the steel dumping allegations.