Prime Minister Christopher Luxon, who is on his first official visit to China, said the Cook Islands had not been transparent and open about its comprehensive strategic partnership with China.
"We’ve suspended some of the aid money until we can get clarity on those issues,” he said in Shanghai.
Relations between the smaller Pacific island nations and their regional backers Australia and New Zealand have stumbled in recent years as Beijing vies to increase its sway in the region. The latest move by New Zealand was striking because it reflects growing friction between two countries with strong constitutional ties over their diverging approaches to managing relations with Beijing. Cook Islands is self-governing but shares a military and passports with New Zealand.
Cook Islands Prime Minister Mark Brown told lawmakers in Parliament on Thursday that the funding was “not halted, it’s paused” and downplayed the significance of the amount frozen. New Zealand is the biggest funder for the Cook Islands.
Freeze emerges as NZ's leader visits China
News of the 18.2 million New Zealand dollar ($11 million) funding halt only emerged when a Cook Islands news outlet saw its brief mention in a government budget document. It's likely to prove difficult for Luxon, who is due to meet President Xi Jinping this week.
Beijing, which said in February that the deals were not intended to antagonize New Zealand, defended its partnership with the country of 15 islands and 15,000 people.
“Both New Zealand and the Cook Islands are important partners of China,” Chinese Foreign Ministry spokesperson Guo Jiakun said in Beijing. “China-Cook Islands cooperation targets no third party, nor should it be interfered with or constrained by any third party.”
In a report tabled in the Cook Islands Parliament this week, the Public Accounts Committee registered “concern” about a reduction of 10 million New Zealand dollars ($6 million) in the government's purse, the first known mention of the finance freeze. The money was earmarked for “core sector support”, which funds the Cook Islands' health, education and tourism sectors, with audits by Wellington on how it's spent.
The money is part of NZ $200 million directed to the Cook Islands by New Zealand over the past three years as part of an almost 60-year-old free association compact. The links demand consultation by Cook Islands leaders with Wellington on agreements with other countries that might affect New Zealand.
The pacts with China were the first serious test of those rules.
