New Zealand halts millions of funds to Cook Islands over its China ties

New Zealand freezes funding to Cook Islands over China agreements, demanding relationship repair and trust restoration.

New Zealand has halted millions of dollars in funding to the Cook Islands over the “breadth and content” of agreements the smaller Pacific nation made with China, officials from the New Zealand Foreign Minister's office said on Thursday (June 19, 2025).

New Zealand, which is the smaller Pacific nation's biggest funder, won't consider any new money for the Cook Islands until the relationship improves, a spokesperson for Foreign Minister Winston Peters told The Associated Press. Cook Islands Prime Minister Mark Brown told lawmakers in Parliament on Thursday that the funding was “not halted, it's paused," and downplayed the significance of the amount frozen.

Relations between other Pacific islands and their larger regional backers Australia and New Zealand have stumbled over ties with China in recent years as Beijing has vied to increase its Pacific sway. But the latest move by New Zealand's government was striking because it reflected growing friction between two countries with strong constitutional ties — Cook Islands is self-governing but shares a military and passports with New Zealand — over their diverging approaches to managing relations with Beijing.

News of the 18.2 million New Zealand dollar ($11 million) funding halt Thursday only emerged when a Cook Islands news outlet saw its brief mention in a government budget document. It's likely to prove difficult for New Zealand's Prime Minister Christopher Luxon, who is in China for his first official visit and due to meet President Xi Jinping this week.

Beijing has defended its Cook Islands strategic partnership before, saying in February that the deals were not intended to antagonize New Zealand.

In a report tabled in the Cook Islands Parliament this week, the Public Accounts Committee registered “concern” about a reduction of 10 million New Zealand dollars ($6 million) in the government's purse, the first known mention of the finance freeze. The money was earmarked for “core sector support”, which funds the Cook Islands' health, education and tourism sectors, with audits by Wellington on how it's spent.

The money is part of NZ $200 million directed to the Cook Islands by New Zealand over the past three years as part of an almost 60-year-old free association compact. The links demand consultation by Cook Islands leaders with Wellington on agreements with other countries that might affect New Zealand.