New Zealand has paused millions of dollars in development funding to the Cook Islands after previously saying it was blindsided by the island nation’s deals with China earlier this year.
The deals with China, including agreements on infrastructure, tourism, technology, and deep-sea mining, have caused concern in Wellington and among Western allies who see them as part of Beijing’s growing influence in the Pacific.
According to a spokesperson for foreign minister Winston Peters, New Zealand will not resume the funding until the Pacific country “takes concrete steps to repair the relationship and restore trust”. New Zealand is the island nation’s largest funder.
Wellington decided earlier this month to suspend some $11m in core sector support funding for 2025-26 to the Cook Islands, saying such assistance “relies on a high-trust bilateral relationship”.
“New Zealand hopes that steps will be taken swiftly to address New Zealand’s concerns so that this support can be resumed as soon as possible,” the spokesperson said.
The decision underscores rising tensions in the Pacific region where Beijing’s increasing influence frequently causes friction between small island nations and their traditional regional partners, Australia and New Zealand.
The Cook Islands has promised urgent action to address Wellington’s concerns and keep dialogue going. Its foreign ministry said it was “determined to address the issue as a matter of urgency”, adding that it “highly values” New Zealand’s assistance.
“Constructive dialogue is ongoing,” the ministry said, “and the Cook Islands remain committed to engaging closely with New Zealand to understand where their concerns lie and how they can be addressed.”
The controversy coincides with New Zealand’s prime minister Christopher Luxon’s visit to China where he is meeting president Xi Jinping and premier Li Qiang on Friday.
Mr Luxon is expected to voice New Zealand’s concerns about Beijing’s actions in the Pacific region during the meeting, according to Reuters.
“It is an issue between the Cook Islands and New Zealand,” Mr Luxon told a press conference in Shanghai on Thursday when asked whether Beijing could be unhappy with the decision. “Our issue is actually with the Cook Islands not being transparent about what it’s negotiating on.”
Chinese foreign ministry spokesperson Guo Jiakun said Beijing regarded both New Zealand and the Cook Islands as important partners.
China’s efforts to support the island nation’s economic development were not directed at a third party and should not be subject to interference, Mr Guo added.
New Zealand and the Cook Islands are obligated by a constitutional agreement to cooperate and consult on defence and security matters and inform each other of any potential risks to either nation.
New Zealand maintains a “free association” relationship with the Cook Islands. Cook Islanders enjoy the right to live and work freely in New Zealand.
Wellington has provided about $117m to the Cook Islands through its development programme over the last three years. A report presented in the Cook Islands parliament this week expressed “concern” over a $6m shortfall in government funding, marking the first known reference to the financial freeze.
The funds were allocated for “core sector support” to finance key areas like health, education and tourism, and were subject to audits by Wellington to ensure proper use.
The Cook Islands, home to just 15,000 people, boasts a vast and resource-rich exclusive economic zone and the government is actively exploring opportunities in deep-sea mining.
There was dismay in Wellington when it learned of a raft of agreements the island nation had signed with China in February.
The agreements didn’t promise security cooperation between China and the Cook Islands, but they did pledge more funding from Beijing for infrastructure projects and educational scholarships.
Not all of the documents Cook Islands prime minister Mark Brown signed were released publicly.
The spokesperson for New Zealand’s foreign minister said on Thursday the agreements illustrated “a gap in understanding” between Wellington and the Cook Islands “about what our special relationship of free association requires” which included consultation to ensure the preservation of shared interests.
The “breadth and content” of the deals and lack of consultation with Wellington about them in advance prompted a review of funding to the Cook Islands, the spokesperson said. “New Zealand has therefore paused these payments and will not consider significant new funding until the Cook Islands government takes concrete steps to repair the relationship and restore trust.”
Mr Brown said in February that the deals with China did not “replace our longstanding relationships with New Zealand, Australia and others, but rather complements them, ensuring that we have a diversified portfolio of partnerships”.
News of the agreements prompted protests in Avarua led by opposition lawmakers.
New Zealand’s latest action was an “entirely avoidable consequence of Cook Islands’ strategic flirtations with China”, Mihai Sora, an analyst at Australian think tank Lowy Institute, told the Associated Press.
“It’s a bit cute to sign up to a comprehensive strategic partnership with China in 2025 and pretend there is no strategic angle for Beijing, given all the mounting evidence of China’s malign strategic intent in the Pacific,” he said.
