New Zealand cuts funding to island nation over China ties
New Zealand has halted millions of dollars in funding to the Cook Islands, citing agreements that the small Pacific nation recently signed with China.
The Cook Islands, a nation comprising 15 islands in South Pacific Ocean, is self-governing but shares a military and passports with New Zealand.
In February, the Cook Islands signed several agreements with China, including a comprehensive strategic partnership agreement, and approved a number of investment projects ranging from transport networks to telecommunications.
While no security cooperation was discussed, at the time experts noted that the deals would deepen China's foothold in the region as it continues to make inroads in the Pacific.
The deals were not well received at home, triggering protests and a vote of no confidence against the prime minister Mark Brown, which he managed to survive.
Beijing defended the partnership, saying that the deals were not meant to antagonise New Zealand and Mr Brown also said that they 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.'
However, New Zealand appears to have been blindsided by the agreements and is now stopping NZ$18.2 million (£8.1 million) until 'the Cook Islands government takes concrete steps to repair the relationship and restore trust'.
A spokesperson for New Zealand's foreign minister Winston Peters said that the 'breadth and content' of the agreements and a lack of consultation with Wellington beforehand prompted a review of the funding.
The agreements illustrated 'a gap in understanding' between the two governments 'about what our special relationship of free association requires,' which included prior consultation on dealmaking, said the spokesperson.
Mr Brown seemed eager to quash any concern in parliament on Thursday morning, claiming the funding had 'not halted, it's paused' and downplayed the amount in question.
The Cook Islands' Foreign Affairs Ministry responded by saying it was 'determined to address [the issue] as a matter of urgency' and it 'highly values' New Zealand's development assistance.
The now-frozen funds are part of NZ$200 million, which New Zealand had directed towards the Cook Islands over a three-year period. The money was set to go towards health, education and tourism sectors on the islands.
The timing could also prove awkward as New Zealand's prime minister Christopher Luxon is in China this week and will be meeting with Chinese president Xi Jinping.
Mr Brown seemed to hint at some hypocrisy by pointing out that Mr Luxon was also looking to increase trade with China during his visit.
The Cook Islands leader said he trusted any agreements Mr Luxon made in Beijing would 'pose no security threat to the people of the Cook Islands'.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
an hour ago
- The Independent
Tariff threats, wars will slow but not collapse global luxury sales in 2025, new study shows
Global sales of personal luxury goods are 'slowing down but not collapsing,' according to a Bain & Co. consultancy study released Thursday. Personal luxury goods sales that eroded to 364 billion euros ($419 billion) in 2024 are projected to slide by another 2% to 5% this year, the study said, citing threats of U.S. tariffs and geopolitical tensions triggering economic slowdowns. 'Still, to be positive in a difficult moment — with three wars, economies slowing down, inequality at a maximum ever — it's not a market in collapse,'' said Bain partner and co-author of the study Claudia D'Arpizio. 'It is slowing down but not collapsing.' Alongside external headwinds, luxury brands have alienated consumers with an ongoing creativity crisis and sharp price increases, Bain said. Buyers have also been turned off by recent investigations in Italy that revealed that sweatshop conditions in subcontractors making luxury handbags. Sales are slipping sharply in powerhouse markets the United States and China, the study showed. In the U.S., market volatility due to tariffs has discouraged consumer confidence. China has recorded six quarters of contraction on low consumer confidence. The Middle East, Latin America and Southeast Asia are recording growth. Europe is mostly flat, the study showed. This has created a sharp divergence between brands that continue with strong creative and earnings growth, such as the Prada Group, which posted a 13% first-quarter jump in revenue to 1.34 billion euros, and brands like Gucci, where revenue was down 24% to 1.6 billion euros in the same period. Gucci owner Kering last week hired Italian automotive executive Luca De Meo, the former CEO of Renault, to mount a turnaround. The decision comes as three of its brands — Gucci, Balenciaga and Bottega Veneta — are launching new creative directors. Kering's stock surged 12% on news of the appointment. D'Arpizio underlined his track record, returning French carmaker Renault to profitability and previous roles as marketing director at Volkswagen and Fiat. 'All of these factors resonate well together in a market like luxury when you are in a phase where growth is still the name of the game, but you also need to make the company more nimble in terms of costs, and turn around some of the brands,'' she said. Brands are also making changes to minimize the impact of possible U.S. tariffs. These include shipping directly from production sites and not warehouses and reducing stock in stores. With aesthetic changes afoot 'stuffing the channels doesn't make a lot of sense,'' D'Arpizio said. Still, many of the headwinds buffering the sector are out of companies' control. 'Many of these (negative) aspects are not going to change soon. What can change is more clarity on the tariffs, but I don't think we will stop the wars or the political instability in a few months,'' she said, adding that luxury consumer confidence is tied more closely to stock market trends than geopolitics. President of Italian luxury brand association Altagamma Matteo Lunelli underlined hat the sector recorded overall growth of 28% from 2019-2024, 'placing us well above pre-pandemic levels.' While luxury spending is sensitive to global turmoil, it is historically quick to rebound, powered by new markets and pent-up demand. The 2008-2009 financial crisis plummeted sales of luxury apparel, handbags and footwear from 161 billion euros to 147 billion euros over two years. The market more than recovered the losses in 2010 as it rebounded by 14%, with an acceleration in the Chinese market. Similarly, after sales plunged by 21% during the pandemic, pent-up spending powered sales to new records.
FF News
2 hours ago
- FF News
Republic of Nauru Becomes First Pacific Country to Launch Digital Asset Regulator
The Republic of Nauru has officially launched its digital asset regulator, becoming the first Pacific island nation to do so. This move positions Nauru as a regional pioneer in crypto regulation, signaling a growing interest in digital assets across Oceania. The Bill establishes the Command Ridge Virtual Asset Authority (CRVAA), named after the highest point of land in Nauru, as an autonomous regulator overseeing virtual assets, digital banking, and Web3 innovation. It will provide a licencing scheme that will allow virtual asset service providers (VASPs) to register and offer their services using Nauru as a base. Nauru President David Adeang said the regulation would pave the way for Nauru to be a digital asset leader in the region and is another step towards strengthening financial integrity, investing in future generations, and forging new pathways for resilience. He pointed out that Nauru is one of the Pacific's most at-risk nations, acknowledged under the United Nations Multidimensional Vulnerability Index (MVI), for its heightened exposure to economic and environmental shocks, and that the Government needed to embrace innovation. 'This bold step aims to harness the potential of virtual assets to diversify revenue streams and fortify economic resilience,' he said. 'By implementing robust oversight of VASPs, Nauru aims to foster sustainable growth, channel new financial inflows into strategic instruments such as its Intergenerational Trust Fund, and reduce its reliance on climate financing, which is often challenging to secure.' The President said Nauru aspires to secure a more sustainable and self-reliant economic future. 'We want to be a government of solutions and innovation, be proactive not passive, and positively approach the future with boldness,' he said. Minister for Commerce and Foreign Investment Maverick Eoe told Parliament that more countries are recognising the potential of virtual assets from blockchain technologies to decentralised finance. 'This Bill proposes to introduce a framework that will put Nauru on par with other countries leading in the development of their digital economies and generating revenue from such developments,' he said. 'The licensing framework….ensures Nauru becomes a competitor, attracting businesses that bring investment, job creation, and financial innovation,' he said. 'By regulating VASPs, token issuance, and secure digital transactions, we can position Nauru as a hub for these types of innovation and development within this part of the world. He said the legislation is a commitment to the future prosperity of the country and a statement that Nauru does not fear the digital transformation, but embraces it and leads within the Pacific region. CRVAA will be tasked with ensuring cybersecurity standards, monitoring financial transactions and enforcing compliance with international anti-money laundering and financial transparency protocols. The Bill, which provides unmatched legal certainty for the token-issuer, introduces a groundbreaking token classification system that provides long-awaited clarity for the global crypto industry, stating that: Cryptocurrencies are presumed commodities, not securities; Utility and payment tokens are excluded from investment contract status; Governance and reward tokens are protected from misclassification The Nauru law defines the activities subject to CRA authorisation as follows: Operation of centralised or decentralised virtual asset platforms Exchange services between virtual assets and/or fiat currencies Custodial and non-custodial virtual asset wallet services Issuance of virtual tokens, including ICOs, STOs, and NFTs Lending, staking, yield farming, and decentralised finance (DeFi) services Stablecoin issuance and cross-border payment solutions Operation of digital banks and digital payment platforms Issuance and management of E-money
Reuters
3 hours ago
- Reuters
Xiaomi unit wins land tender in Beijing for EV manufacturing
BEIJING, June 19 (Reuters) - A Xiaomi unit has won a tender to buy a plot of land in Beijing close to its existing car factory for 635 million yuan ($88 million), which it plans to use for a smart connected car and components project, a city regulator said on Thursday. The win for a 50-year lease to the 485,134 square metre-large plot of land was announced by Beijing's municipal planning and natural resources commission. The land plot is close to the second phase of Xiaomi's EV factory. Xiaomi Jingxi Technology, winner of the tender on Thursday, secured the second phase that covers an area of 531,130 square metres for 842 million yuan in July 2024. The project reached its final stage in April. The tender win would make Xiaomi one of the few automakers in China approved to expand capacity while the majority of the sector is grappling with overcapacity. Xiaomi said its new YU7 sports utility vehicle is getting more attention than the SU7 sedan and on its app, buyers have to wait up to 51 weeks to pick their Xiaomi cars as the company ramps up output. Xiaomi, the world's third-largest smartphone maker, launched the SU7 sedan last year and has outsold Tesla's (TSLA.O), opens new tab Model 3 on a monthly basis since December. The SU7's success is seen expediting the company's EV bid despite intense competition in the world's largest auto market. Xiaomi raised its target for EV deliveries this year to 350,000 from 300,000 earlier this year. The company had planned an annual output of 300,000 vehicles in its EV factory to be built in two phases. It will take orders for the YU7 at the end of June, CEO Lei Jun said on Wednesday. The YU7's release was earlier set for July. ($1 = 7.1869 Chinese yuan renminbi)
