New Zealand Prime Minister Christopher Luxon's recent visit to China highlighted his government's desire to deepen trade ties with Beijing, but New Zealand's hardening regional defense posture and reassertion of control over Pacific partnerships risk scuttling rapprochement and exposing the country to various forms of Chinese coercion in the future. Luxon embarked on his first official visit to China from June 17-20. He first traveled to Shanghai to meet with business and academic leaders, where he facilitated business agreements worth around $522 million in sectors including agriculture, education services, science and technology and climate-related industries for New Zealand, as well as deeper education and research links, respectively. Luxon then paid a state visit to Beijing for meetings with Premier Li Qiang and President Xi Jinping, where the leaders signed agreements on customs cooperation, food safety, organic certification, climate policy and scientific collaboration. However, during his meeting with Xi, Luxon also raised concerns about the allegedly destabilizing impact of China's regional military posture, including its naval exercises in the Tasman Sea and new strategic partnership with the Cook Islands.

• Luxon came to office in November 2023. Until now, he had prioritized visits to other countries in the wider region, such as India and Vietnam.
• In February, China held unannounced live fire naval exercises in the Tasman Sea, which is located about halfway between New Zealand and Australia.
• The Cook Islands lie approximately 1,860 miles northeast of New Zealand in the South Pacific. Wellington and the island territory share a free association agreement under which the Cook Islands handles its own domestic affairs while New Zealand retains responsibility for defense and external affairs, in consultation. However, in February, the Cook Islands signed a strategic partnership deal with China that encompassed economic, infrastructure, education and seabed mining cooperation but excluded defense. Luxon deliberately referenced the deal during his closed-door discussions with Chinese leadership to underscore New Zealand's concerns about Beijing's expanding Pacific footprint.

Luxon's visit marked a high-stakes diplomatic mission aimed at deepening economic ties with China. During his meetings in Shanghai, Luxon highlighted New Zealand's appeal as both a tourism destination and significant supplier of dairy, meat and wood products, for which China remains the largest market. During his meetings in Beijing, Luxon then signed a 12-month visa-waiver trial for Chinese tourists who visit New Zealand starting in November, and a deal expanding commercial air routes between China and New Zealand to boost connectivity. This points to New Zealand's sustained economic dependence on China, as well as the two countries' deepening tourism ties, with Chinese visitors making up 15% of international arrivals in New Zealand in 2024 (though these arrivals are still only 57% of pre-pandemic levels). Additionally, Chinese students significantly contribute to New Zealand's economic resilience, making up 35% of all international students and providing substantial tuition revenue. But despite this strong economic relationship, China's expanding Pacific influence and naval buildup have heightened New Zealand's threat perception vis-a-vis Beijing in recent years, driving Wellington to reexamine its national security posture.

• China-New Zealand relations are anchored in commercial ties, largely by a free trade agreement signed in 2008. Relations have been pragmatic and friendly, though the two countries have periodically sparred over human rights issues.
• China purchased approximately 20% of New Zealand's total exports in 2024. 
• Memorandums signed during Luxon's trip to China also covered customs processing, food safety, organic certification, research partnerships and cultural heritage exchanges. 

During his trip to China, Luxon also sought to signal New Zealand's more assertive regional posture in the face of growing Chinese threats. The trip came amid Wellington's large strategic pivot to focus more on regional security issues. Central to this shift is New Zealand's $7.2 billion Defence Capability Plan announced in April, which aims to nearly double military spending to 2% of GDP by 2033, marking the country's most ambitious military investment in decades. This allocation will fund maritime patrol and surveillance aircraft (e.g., P‑8 Poseidons), amphibious and strike assets, drones, helicopters and the modernization of Wellington's frigate fleet, all to plug perceived security gaps in an increasingly contested western Pacific region. Further reflecting this new posture, New Zealand will deploy surveillance platforms to the South China Sea in the coming months and has scheduled regular maritime patrols with regional partners such as Australia, the United States, France and Pacific Islands Forum partners, which will begin taking place once New Zealand's surveillance fleet starts deploying to the disputed waterway. In February, Luxon noted New Zealand must "pull its weight" in the region and work closely with allies, including Australia, to monitor Chinese naval activity in light of China's unannounced live fire naval exercises in the Tasman Sea. These moves align with New Zealand's growing engagement in AUKUS discussions between Australia, the United Kingdom and the United States, as well as New Zealand's support for Taiwan's presence in international forums, symbolizing Wellington's deepening alignment with Washington and the strategic priorities of the other Five Eyes intelligence alliance partners (which includes all three AUKUS countries as well as New Zealand and Canada). 

• The February signing of the Cook Islands' strategic partnership with China triggered alarm in Wellington and underscored New Zealand's growing sensitivity to Chinese influence among its Pacific partners. According to Wellington, the agreement violated the Cook Islands' free association obligation to consult with New Zealand before entering external partnerships, prompting Wellington to freeze approximately $11 million in aid and propose tighter oversight ahead of Luxon's China visit. This intervention reflects New Zealand's readiness to reassert influence over Pacific neighbors by enforcing its free association expectations. While the aid freeze risks pushing the Cook Islands closer to China, it also sets a precedent for firmer diplomatic protocols (i.e., challenging China on its regional aspirations). 
• New Zealand's alignment with the Five Eyes is further evidenced by its increased defense spending, expanded intelligence-sharing posture, joint maritime surveillance with Australia and the United States, and new security agreements with other regional countries like the Philippines.

 
However, New Zealand's increasingly assertive stance on regional security risks inviting future Chinese retaliation that could undermine its simultaneous efforts to expand economic and other ties with Beijing. New Zealand's ramped-up military spending and enhanced Pacific deployments underscore a proactive strategy designed to check China's growing influence and align with the U.S.-led regional security architecture and the Five Eyes grouping more broadly. However, this recalibration carries risks. For one, New Zealand's South China Sea deployments and more assertive posture broadly risk leading to maritime incidents to which China could respond with selective economic coercion — such as by imposing economic restrictions targeting New Zealand's highly exposed sectors, including dairy, meat or education. China could also pursue additional military coercion akin to February Tasman Sea drills. Moreover, Wellington's influence over Pacific states is constrained by these island nations' growing economic dependence on Chinese financing and development aid, which New Zealand cannot realistically match. Finally, sustaining domestic support for expanded defense spending will prove difficult for Wellington, especially if economic headwinds worsen.

• On Feb. 11, a Chinese J‑16 fighter released flares within approximately 30 meters of an Australian P‑8A Poseidon during a routine surveillance patrol over the South China Sea, an interaction that Canberra described as "unsafe and unprofessional" and formally protested. This incident likely directly led to Chinese retaliation via its live fire drills in the Tasman Sea in February, also showcasing Beijing's growing naval reach.
• New Zealand and the Philippines signed a status of visiting forces agreement in April, enabling their militaries to conduct joint exercises and deploy personnel within each other's territories. The move is aimed at bolstering interoperability amid shared security concerns in the contested South China Sea. Under this deal, New Zealand will deploy the same surveillance aircraft — P‑8 Poseidons — as Australia to the South China Sea. It will thus also risk inviting Chinese retaliation, just as Australia experienced.