NZ/China relationship: 'We have a big problem'

- David Mahon's full length interview for the Economy Hub video show will run later today online.

New Zealand has lost its favoured status with the Chinese political leadership following the Government decision to rule Huawei out of the 5G mobile build here, says Beijing based kiwi businessman David Mahon.

Mahon, who has been in China for 34 years, said he believes Beijing already has a strategy in place for retaliation.

"In the last almost 40 years New Zealand has had a brilliant relationship with China, more for its independence and the respect Beijing had for the way that New Zealand stood on its own principles," Mahon told the Herald in Auckland today.

"In the last 12 months or so that has almost reversed. So there is now a very different view, almost an opposite view of New Zealand."

Mahon said the Huawei decision was the flash point for the deteriorating relationship.

"We've got a big problem. It's viewed as breach of trust."

David Mahon, from Mahon China, says New Zeland's relationship with Beijing has deteriorated - New Zealand Herald Photograph by Greg Bowker.

This week the Herald reported that diplomatic links with China had reached a new low as Prime Minister Jacinda Ardern was given the cold shoulder by Beijing.

Ardern was scheduled to visit China early this year but the invitation has been put on hold.

The 2019 China-New Zealand Year of Tourism was meant to be launched with great fanfare at Wellington's Te Papa museum next week, but that has been postponed by China.

"With the banning of Huawei it looks like a stitch up – that we are now in cahoots with the US," Mahon said.

"It's seen as a Five Eyes stitch Up – it may not be and I have no special insight - but that is how it perceived in Beijing at the moment."

It did seem that China was beginning to "over process our fresh products passing through ports", Mahon said. "The message is we're not favoured and they are upset with us".

"I do believe that the Chinese Government has a strategy for retaliation. They won't be blunt in that way. All one does apply process."

Beijing had the power through state media and other channels to get the message to the relevant officials and the general public.

- David Mahon's full length interview for the Economy Hub video show will run tomorrow online.