In a dramatic development highlighting growing geopolitical tensions in the Pacific, New Zealand has frozen millions of dollars in funding to the Cook Islands, following revelations that the small island nation had signed a series of strategic agreements with China without prior consultation with Wellington. The move, announced on June 19, 2025, marks the most significant fallout yet in the Pacific over China's expanding influence.

Officials from New Zealand Foreign Minister Winston Peters' office said the decision to pause funding was triggered by the “breadth and content” of the agreements signed between Cook Islands Prime Minister Mark Brown and Chinese officials earlier this year.

The halted amount totals 18.2 million New Zealand dollars (approx. $11 million USD), part of a broader multi-year aid framework.

Free Association Under Strain

The decision is particularly significant because the Cook Islands and New Zealand share a special constitutional relationship under a free association compact dating back nearly six decades. Under this arrangement:

• The Cook Islands is self-governing,

• But it shares defence and foreign affairs responsibilities with New Zealand,

• Cook Islanders hold New Zealand citizenship, and

• The countries consult on international agreements, especially those with implications for national security.

This makes New Zealand the largest foreign aid contributor to the Cook Islands, especially in the sectors of health, education, and tourism.

According to the New Zealand government, this special relationship was undermined when Mark Brown’s administration signed multiple cooperation agreements with China in February 2025, without sufficient prior consultation.

“The agreements illustrate a gap in understanding about what our special relationship of free association requires,” a spokesperson for Winston Peters stated.

The Agreements with China

The agreements signed with China reportedly include:

• Commitments for infrastructure development funding,

• Educational scholarships for Cook Islands citizens, and

• Broader developmental cooperation.

Importantly, while no direct security or defence pacts were part of the agreements, the scale and opaque nature of the deals raised red flags in Wellington.

Several of the signed documents were not made public, fuelling speculation about strategic intentions, especially as the Cook Islands possesses a large exclusive economic zone and is exploring deep-sea mining, a sector of growing strategic and environmental interest.

Funding Suspension Revealed via Budget

The suspension of funds was only made public after a Cook Islands news outlet discovered a brief mention of it in a government budget document. Further scrutiny by the Public Accounts Committee in Parliament revealed a shortfall of NZ $10 million (~$6 million USD) in “core sector support.”

This is funding which typically goes toward essential sectors like:

• Health services

• Education programmes

• Tourism promotion

These are all monitored by audits conducted in Wellington to ensure proper utilisation.

The full freeze appears to have blindsided Cook Islands officials, even as PM Brown attempted to downplay it by describing the move as a “pause” and not a full halt in Parliament.

Cook Islands PM Pushes Back

In his parliamentary address, PM Mark Brown sought to defend his government’s China deals, saying they were not intended to replace traditional partners like New Zealand and Australia, but rather to “complement them.”

Brown added:

“Our partnerships with China do not undermine our ties with New Zealand. They diversify our options for development.”

He also made a pointed jab at New Zealand PM Christopher Luxon, who is currently on an official visit to China and is expected to meet President Xi Jinping. Brown suggested that any agreements Luxon signs in Beijing should “pose no security threat to the people of the Cook Islands,” noting that Avarua has not been consulted on the nature of these deals either.

This comment underscores a growing sense of diplomatic imbalance and resentment over perceived double standards.

Pacific Region Sees Shifting Alliances

The move by New Zealand comes in the context of a rapid shift in Pacific geopolitics, with China aggressively pursuing new partnerships across the region, including:

• Solomon Islands

• Vanuatu

• Kiribati

• And now, the Cook Islands

Beijing’s influence is most visible in infrastructure investment, port development, education exchange, and even security dialogues. These moves have unsettled traditional powers like Australia, New Zealand, and the United States, who view them as strategic encroachments.

Beijing, in response, has repeatedly denied that its outreach is aimed at antagonising anyone. In fact, in February 2025, it defended its Cook Islands partnership by stating the agreements were development-oriented, not strategic.

Strategic Concerns over Deep-Sea Mining

The Cook Islands’ Exclusive Economic Zone (EEZ) spans over 1.9 million square kilometres, and contains significant potential for deep-sea mining, including polymetallic nodules rich in cobalt, nickel, and rare earth minerals.

This has piqued China's interest, as it continues to lock up resource supply chains around the globe.

Though the February agreements did not mention resource extraction directly, New Zealand security analysts have warned that Beijing’s long-term interest could involve strategic control over undersea mining rights.

“It’s a bit cute to sign up to a comprehensive strategic partnership with China in 2025 and pretend there is no strategic angle for Beijing,” said Mihai Sora of the Lowy Institute, an Australia-based think tank.

Protests and Political Fallout

The agreements have also sparked domestic opposition within the Cook Islands. Protests broke out in Avarua, the capital, led by opposition MPs and civil society groups who demanded greater transparency over deals with China.

Activists warned that non-public MOUs with China could compromise the island nation’s sovereignty and environmental integrity, especially if Beijing-linked companies gain rights to extract resources from the seabed.

NZ-China Relations in Focus

The aid freeze comes at an awkward time for New Zealand’s PM Christopher Luxon, who is currently in Beijing on his first official visit. The timing of the funding halt complicates his efforts to strengthen bilateral trade with China and promote tourism through eased visa norms.

Analysts say Luxon will have to walk a tightrope, balancing economic engagement with China while reassuring Pacific partners of New Zealand’s security commitments.

What Happens Next?

According to Wellington’s statement:

“New Zealand will not consider significant new funding until the Cook Islands Government takes concrete steps to repair the relationship and restore trust.”

This includes:

• Full disclosure of the February agreements,

• Renewed commitment to consult Wellington in future international arrangements, and

• Confidence-building steps that reaffirm the Cook Islands’ position within the free association framework.

The next few weeks will be critical in determining whether Mark Brown’s government moves to mend ties with its largest benefactor or continues to deepen cooperation with Beijing.

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