NZ walks fine line between powers

Warmer relationship with US won't disrupt links with China, says Defence Minister

Defence Minister Jonathan Coleman is confident that deepening military co-operation with the US will not endanger New Zealand's relationship with China, saying we can be friends with both major powers.

United States Defence Secretary Leon Panetta arrived last night, the first time a Defence Secretary has visited since Caspar Weinberger in 1982 - before New Zealand's anti-nuclear legislation ended the Anzus Treaty for New Zealand.

While Mr Weinberger's Cold War-era visit focused on the Soviet presence in the Pacific, Mr Panetta's will focus on China - which he has just visited as part of the US push to reassert its influence in Asia Pacific.

New Zealand's free trade agreement with China gave it some influence, and a reservoir of trust, but also meant New Zealand had to tread carefully with the United States.

Dr Coleman said topics during Mr Panetta's visit would include ways to maintain momentum on the Washington Declaration - an agreement signed between the two countries in July for greater military co-operation in the region. However, there was nothing to stop New Zealand having a good relationship with both major powers.

"The US have indicated that they completely understand that we have a very good relationship with China, that it is economically very important to us, but at the same time we are engaged in a range of things with the US. So it's not one or the other. It's not a matter of having to make a choice and we feel we can manage our relationship with both of those countries in a way that doesn't offend either of them."

Centre of Strategic Studies director Robert Ayson said New Zealand would have to consider how far and how fast it wanted to move on that agreement, which had the potential to "get up China's nose".

"It's a point for New Zealand to be a little bit careful of, simply because one of the things that does concern China is the notion that countries are ganging up against it."

Mr Panetta will meet Dr Coleman and Foreign Affairs Minister Murray McCully today and Prime Minister John Key for a barbecue lunch tomorrow.

The visit is being seen as a further sign that the US and New Zealand have accepted each other's stance on the nuclear issue, but Mr Key said speculation it would result in an visit by a US vessel was wrong. The visit was significant for symbolic reasons, but it would not signal any shifts in position.

Mr Key said he still hoped the US would allow a coastguard vessel to visit, but "I don't think that's going to happen any time soon".

He rejected speculation in an American newspaper that either the US or New Zealand would soften the stance on ship visits.

Secretary of State Hillary Clinton's visit to the Pacific Islands Forum last month was seen as an attempt to shore up the US against China's growing influence in the region and Mr Panetta's trip also included time in Japan.

China and Japan are in a territorial dispute which has concerned the US, although it has said it will not intervene. Mr Key distanced New Zealand from getting involved, saying US relationships with other countries were its own affair.