New Zealand opposition party rejects criticism its road plan will lead to Chinese debt trap

The National Party has pledged to spend some US$14.6 billion on public infrastructure, including welcoming Chinese cash to build new roads
Some New Zealanders accused leader Christopher Luxon of ‘selling’ the country to foreign investors at a time of concerns over Chinese investments in the Pacific

New Zealand

SCMP’s Asia desk

Published: 6:45pm, 2 Aug 2023

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New Zealand’s opposition leader Christopher Luxon has brushed off criticism that his National Party’s plan for a multibillion-dollar road network funded with Chinese money could push the country into a debt trap.

The conservative party this week pledged in its election manifesto to invest NZ$24 billion (US$14.6 billion) in public infrastructure, including building massive expressways and transport systems, if voted to power in October’s general election.

Luxon, who touted the initiative as a solution to reduce congestion and boost incomes, said a “lot of sovereign wealth funds” had expressed interest in the projects, and he was “absolutely” open to pouring Chinese cash into them to ensure New Zealand has a modern and reliable infrastructure.

“New Zealand is the same size as Britain and Japan, we have 5 million people in it, a strong and resilient road network will be absolutely critical to our future,” he said.

Late afternoon traffic in Auckland City. The conservative party this week pledged in its election manifesto to invest NZ$24 billion (US$14.6 billion) in public infrastructure. Photo: Shutterstock

Luxon added the party’s National Infrastructure Agency would take a call on letting Chinese workers in to build the roads. “They will really work with partners to develop the right sort of financing and the right sort of partner for the right sort of project,” he said.

The former Air New Zealand chief executive, who took the party’s helm in 2021, also played down concerns over attracting Chinese investment in the Pacific, where previous infrastructure programmes have seen Chinese workers migrating and island nations reportedly being saddled with debt.

“That’s not going to happen,” he said. “That’s quite a xenophobic sort of response and a pretty simplistic response.”

Luxon said he was in touch with potential investors, including Canadian and Australian pension funds, broadcaster 1News reported.

Prime Minister and Labour leader Chris Hipkins cast Luxon’s road-building spree as a “la-la land dreaming”, claiming the projected budget was billions of dollars short.

Social media users in New Zealand accused Luxon’s party of “selling” the country to foreign investors and forcing it to be in “perpetual debt” to China.

“This is huge money, and it deserves to be questioned minutely. Also reports of belt and road projects failing around the world is a major concern,” wrote a user on X, formerly known as Twitter, referring to Beijing’s flagship infrastructure project linking Asia and Europe.

New Zealand backs ‘tough conversations’ with China to manage ‘complex’ ties

New Zealand, long seen as a moderate voice on China’s growing presence in the South Pacific, has also signed a memorandum of understanding with Beijing on the Belt and Road Initiative.

Hipkins in June met Chinese President Xi Jinping and backed the economic giant’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and agreed to strengthen bilateral economic relationship.

A survey last month found New Zealand was heading towards a hung parliament after the October election, with support for both the National Party and the ruling Labour slipping to the benefit of several smaller rivals.