Despite increasingly strong warnings from Chinese officials, New Zealand’s National Party-led coalition government is continuing to actively explore the prospect of joining Pillar II of AUKUS.

In September 2021, the governments of Australia, the United States and the United Kingdom announced the formation of AUKUS, an enhanced security partnership intended to bolster the international rules-based order in the Indo-Pacific. While the threat to this order was not spelt out initially, it was clear AUKUS was formed to counterbalance the perceived growth of China’s influence in this region.

New Zealand’s non-nuclear security policy rules out any participation in Pillar I of AUKUS, which involves the delivery of nuclear-powered submarines to Australia. But Pillar II envisages the sharing of state-of-the-art defence technologies in areas such as artificial intelligence, hypersonic missiles and cyber warfare. In March 2023, the administration of US President Joe Biden indicated the door was open for discussions about New Zealand joining Pillar II.

Since then, the previous and current New Zealand governments have been engaged in discussions with members of AUKUS to ‘weigh up the economic and security benefits and costs of any decision’ about whether joining Pillar II is in the national interest. Wellington’s focus on the pros and cons of Pillar II membership seems to be based on the assumption that the technology-sharing component is somehow detached from the overarching AUKUS goal of deterring China, New Zealand’s biggest trade partner.

While the previous Labour government in New Zealand was willing to explore this option, the current National-led coalition has enthusiastically linked participation in Pillar II to a broader goal of aligning more closely with ‘traditional partners’. Foreign Minister Winston Peters has said there are ‘powerful reasons’ for New Zealand to engage with security arrangements like AUKUS ‘when all parties deem it appropriate’.

A New Zealand government briefing paper, released under the Official Information Act, said that AUKUS Pillar II ‘presents both significant capability opportunities as well as wider interoperability implications’ for New Zealand.

Discussions seem to have centred on new technologies like artificial intelligence and space technology, a field in which New Zealand has emerged as a potentially significant actor. Underpinning this apparent tilt towards Pillar II membership is Peters’ assessment that the international security situation is now ‘the worst that anyone today working in politics or foreign affairs can remember’ and the implication that New Zealand now needs to seek more shelter from its traditional allies.

The Chinese Ambassador to New Zealand, Wang Xiaolong, concedes that the bilateral relationship is at a ‘critical juncture’, but insists that ‘China is not a threat to New Zealand, rather, as has been pointed out by both the Prime Minister [Christopher Luxon] and [Trade] Minister [Todd] McClay, China represents for New Zealand an opportunity and a mutually beneficial partner’.

China has ‘strong concerns’ about the possibility that New Zealand might join AUKUS Pillar II. These include the conviction that AUKUS is a nuclear-based military alliance ‘unabashedly’ designed to maintain US hegemony and that the ‘sole purpose of its second pillar is to serve and support nuclear-related military cooperation under the first pillar’.

While previous Labour-led governments since 2017 engaged with China in a way that was distinguishable from New Zealand’s allies, they had few illusions about China’s authoritarian system and its increasing assertiveness internationally. Jacinda Ardern’s government issued a strategic defence policy statement in 2018 explicitly identifying China as a threat to the international rules-based order, passed legislation in late 2019 banning all foreign donations over NZ$50 to New Zealand political actors in an apparent move to limit Chinese influence and condemned the 2022 Solomon Islands–China security pact.

During Chris Hipkins’ brief tenure as prime minister, a raft of national security and defence policy documents were released confirming New Zealand’s threat perception of China had hardened. Peters said that ‘China is a vital economic partner for New Zealand’ but added that their ‘political systems diverge in significant ways and it is no surprise that this leads to differences of opinion’.

Prime Minister Christopher Luxon and Trade Minister Todd McClay have publicly indicated that they would not expect a hostile backlash from Beijing if the National-led coalition government eventually joined Pillar II of AUKUS. It remains to be seen whether this confidence is justified, but New Zealand’s decision-making on Pillar II will depend in part on whether it comes to share the view of AUKUS members that China constitutes the principal threat to the existing international order — though Australia may now be witnessing some pushback against this perspective.

Many New Zealanders accept that the world has become a more complex and challenging place, but the current government may face the prospect of a hard sell, in domestic political terms, in attributing this largely to China. Apart from the possible economic fallout from such a move, critics point out that China’s assertiveness is only one of many threats facing the multilateral system on which New Zealand and many other small and middle powers rely.

These threats include the dysfunctionality of the UN Security Council, Russia’s illegal invasion of Ukraine and US exceptionalism, as well as a growing array of problems that include climate change, pandemics and transnational terrorism, which do not respect borders and cannot fixed by security pacts like AUKUS.

There are alternatives to Pillar II for strengthening New Zealand’s national security. The National-led coalition government could end decades of under-investment in defence by raising defence expenditure to at least 1.7 per cent of GDP and instead focus on bolstering defence ties with its closest ally, Australia.

Robert G Patman is Inaugural Sesquicentennial Distinguished Chair and a specialist in international relations at the University of Otago, New Zealand.