New Zealand’s position in the South Pacific is increasingly threatened by an assertive China, and defence officials fear the construction of a military base in the region could “fundamentally alter the strategic balance”.

The dire warning about worsening regional security and global competition was contained in the latest Defence Assessment, published by the Ministry of Defence on Wednesday.

“The trajectory is negative. There's nothing that we see in the environment at the moment that would say that it's going to get any more positive,” said Secretary of Defence Andrew Bridgman, at a press conference at Defence House in Wellington.

The assessment, a policy document last produced in 2014, catalogued a series of concerns about the growing presence of China, its increasingly strong nationalist narrative and its ongoing military build up.

"China’s rise is the major driver of geopolitical change ... Ultimately, Beijing is seeking to reshape the international system to make it more compatible with China’s governance model and national values, and with China recognised as a global leader,” the assessment read.

“China has increasingly integrated the activities of its military with those of civilian (including paramilitary) entities as part of its ‘military-civilian fusion’ approach to prosecuting its strategic interests.

“China views an increased presence in the Pacific as part of its natural progression towards its global goals.”

The assessment said the “most threatening” developments in the Pacific could include the construction of military or dual-use bases by countries not aligned with New Zealand, military supported resource exploitation, and military confrontation.

READ MORE

• New Zealand’s defense minister: Industry is still weathering the COVID-19 storm
• NZ Army sees spike in troops leaving force over MIQ burnout
• NZDF confirms Chinese spy ship entered NZ ‘economic zone’
• More on Threats, Less about Risks: New Zealand's Changing National Security Calculus

The construction of a base could “fundamentally alter the strategic balance of the region”, the assessment said, “supporting grey zone and other activities counter to New Zealand’s interests”.

Bridgman said militarisation in the Pacific, and the building of bases, by “countries that don't have the same values as us” would be a problem.

"Another problem would be countries using their military to exploit resources in the Pacific. Another problem would be countries competing without perhaps the same values competing with us in security crises,” Bridgman said.

“Those are the type of things that we're just saying in the Pacific would be a concern, because we haven't had them before historically.”

The assessment also said there was increasing “grey zone" activity, such as “such as propaganda, sabotage, clandestine military actions and foreign interference”.

Bridgman said such activity was being conducted by certain state and non-state actors that were “below the threshold for conflict”.

“We need to do things to pre-empt it ... NZDF is developing cyber capabilities, that’s really, really important.”

Alongside the assessment, Defence Minister Peeni Henare published his defence priorities for both the ministry and the Defence Force, the first policy move he has taken since he assumed the defence portfolio after the 2020 election.

He directed New Zealand’s defence agencies to look closer to home and prioritise culture, diversity, and the rebuilding of its substandard housing, while focusing on supporting Pacific nations.

The three priorities were people, infrastructure, and the Pacific.

Among the “activities” listed under these priorities were lifting a focus on culture and diversity, rebuilding the Defence Force’s readiness after its work guarding managed isolation facilities during the pandemic, prioritising improvements to housing, and assisting Pacific partners.

“We need to make sure that we're deliberate about how we regenerate our force and capability ... We are putting a line in the ground today, to be able to say right now, infrastructure must be a focus,” Henare said.

“I've spoken to my counterparts in Australia and other places around the world, including the Pacific. They look to New Zealand for leadership here. And I'm confident that with these priorities, and what we have in store for the New Zealand Defence Force, will continue to support them.”

Chief of Defence Air Marshal Kevin Short said it would take “a couple of years” to rebuild the capability of the defence forces, after the pandemic and deployment to guard managed isolation facilities around the country set back its ability to train and prepare.

"It will be quite a few years and the clock hasn't started for that regeneration yet. We hope that occurs mid next year, but that's up to the Government and the tasking priorities they have for us.”

Henare also released a list of high-level principles for the Defence Force.