Professor Anne-Marie Brady
Supplementary Submission to the New Zealand Parliament Justice Select Committee Inquiry into Foreign Interference Activities, 2019

Former politicians with access to government are a valuable commodity. China’s foreign affairs work has always aimed to coopt foreigners with access to political power to support China’s foreign policy agenda. But now the focus is on using foreign political leaders to progress both economic and political relations. China’s united front approach has always used civil actors to promote political ends. CCP united front officials and their agents are tasked with developing relationships with foreign and overseas Chinese personages to influence, subvert, and if necessary, bypass the policies of their governments and promote the interests of the CCP globally.

A 1997 report by Canada RCMP-SIS identified a pattern of foreigners with high-level political contacts being placed in high profile roles in Chinese companies or Chinese-funded entities in Canada.

Examples of this can also be found in New Zealand. Concerns have repeatedly been raised about these relationships in the New Zealand media and in parliament. Below I will list some of these connections.

Former National Party leader, Dr Don Brash, chairs the Industrial Bank of China in New Zealand; former National MPs Ruth Richardson and Chris Tremain are on the board of the Bank of China in New Zealand; while former Prime Minister Dame Jenny Shipley chairs the China Construction Bank (New Zealand) and was on the board of the China Construction Bank for six years. She is also chair of the Oravida board. Former National MP and Minister of Finance, Ruth Richardson was a director of Synlait Farms and is now a director of Synlait Milk. Shanghai Pengxin– noted for its interest in New Zealand’s farms as well as near space- owns 74% of Synlait Farm. National MP Judith Collins‘ husband David Wong-Tung was on the Oravida board for five years. Sammy Wong, husband of former National MP Pansy Wong, assisted Pacific Power Development to get a contract for the Chinese company China North Rail (CNR) to supply 20 locomotives to KiwiRail. CNR also won a $29 million contract to supply 300 flat-deck wagons to KiwiRail.

More recently, former New Zealand PM John Key is now acting on behalf of US media and entertainment company Comcast, to assist Comcast’s business projects in China. In July 2017, Key met with Chinese premier Li Keqiang, the acting mayor of Beijing, and head of China’s Department of Tourism; with the New Zealand Ambassador to China in attendance. In September 2017 the New Zealand media raised pointed questions about the price and purchaser of a two-thirds portion of Key’s Parnell property. The property was sold for NZ$20 million, well above market rates for the area, to an undisclosed Chinese buyer. John Key refused to answer any questions about the transaction.

The BFD.

Sir Bob Harvey, former mayor of Waitakere, heads the New Zealand OBOR Promotional Council which is acting as a matchmaker in infrastructure projects in Auckland. The former mayor of Christchurch, Sir Bob Parker is chairman of Xindu Group, a partnership with Huadu Construction for projects in Christchurch.
Parker negotiated investment deals with Huadu in 2013, while he was mayor of Christchurch. Huadu Construction is a Hebei-based former SOE. Eugene Feng, former Head of International Partnerships with the Christchurch City Council’s Christchurch Development Corporation is CEO of Huadu. Huadu’s New Zealand subsidiary, Xindu is involved in multiple projects in Christchurch, including apartment blocks, the Christchurch health precinct, and the Port Hills Adventure Park.

The involvement of the two former mayors of Waitakere and Christchurch in politically-connected Chinese investment projects fits the pattern of Xi-era united front activities. Local governments are important because they are able to make planning decisions on the kinds of infrastructure project China wants to establish in the Belt Road Initiative.

The Chinese People’s Association for Friendship with Foreign Countries (CPAFFC, Youxie)—a united front organization—is in charge of sister city relations. Since 2015, CPAFFC have run an annual China-New Zealand mayoral forum. During the first meeting the mayors discussed exchanges and cooperation in the fields of tourism, education and primary industry and issued a public statement, the Xiamen Declaration.

CPAFFC had an important role in people’s diplomacy when China was diplomatically isolated during the Cold War. However, they were increasingly marginalized from the 1980s on, as the PRC had developed diplomatic relations with most of the countries of the world. The Xi administration’s strategy of working more with local governments for economic projects has now revitalized the CPAFFC, as well as the local equivalents they work with such as in New Zealand, the New Zealand-China Friendship Society (NZCFS). NZCFS, like their parent organization, went into decline from the 1980s on, and struggled to attract membership. Now thanks to significant support from both the PRC and the New Zealand government, a re-invigorated NZCFA is again promoting China’s interests, but this time it is an economic agenda—One Belt, One Road.

In 2012, a wealthy Chinese property developer with close connections to the Chinese government, Simon Deng Li, donated 1 million yuan to the New Zealand China Friendship Society to enable it to expand its activities. In the same year CPAFFC donated a further 1 million yuan. These two donations have now been “localized” by being linked in to the New Zealand government’s Winston Churchill Trust, which provides research funding. Only those who are members of NZCFS may apply for the Winston Churchill Trust fund for projects on China.

The society has also used the two donations to subsidize New Zealand journalist and youth visits to China, as well as art exhibitions, book publications and other activities that promote a non-critical view of China in New Zealand.

According to a leaked 1997 RCMP-CSIS report “Chinese Intelligence Services and Triads Financial Links in Canada”, Chinese investors linked to political and criminal interests may conceal their foreign identity by purchasing a foreign company in order to buy a local identity, and then using it to invest in other companies, as a local, rather than a foreign investor. This can be useful for influence activities, and in some cases, it could be a means to potentially access strategic information and technology.

The following New Zealand examples may be worthy of further investigation.

In 2015 Kuangchi Science signed an agreement with Airways New Zealand and Shanghai Pengxin International to launch a near-space balloon on one of their dairy farms in New Zealand for data transmission. In 2016, Kuangchi Science became the main shareholder of innovative New Zealand near-space company Martin Jackpacks.

In 2017 Huawei Technologies Co Ltd signed a partnership with Victoria University of Wellington and Lincoln University. Huawei have received subsidies from the PRC Ministry of State Security, and the USA and Australia have banned the company from their telecom markets. Huawei have promised to spend NZ$400 million to build a cloud data centre and innovation labs in Christchurch and Wellington and are building data capacity well in excess of their needs for the project.

In 2013 Huawei were contracted by New Zealand’s Telecom to build the country’s 4G network. Telecom dismissed security concerns raised about Huawei, which had already acquired a major stake in the New Zealand telco market by becoming the main financial backer of start-up telco 2degrees in 2011, who are majority owned by a Maori consortium.

In 2014 New Zealand aeronautics company Pacific Aerospace signed a partnership with Beijing Automotive Group for the sale of planes into the Chinese market. However, in 2017 Pacific Aerospace were charged by the New Zealand Customs for illegal exports to the Democratic People’s Republic of Korea (DPRK) via its Chinese partner. A UN report documented that, contravening UN sanctions on the sale of such goods to the DPRK, Pacific Aerospace knew about the sale and had offered parts and maintenance training.

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