NZ Suspends Nearly $30m in Aid to Cook Islands After China Deals

New Zealand has paused close to $30 million in aid to the Cook Islands, marking a sharp cooling in the relationship between the two governments.

The suspension involves two years’ worth of Core Sector Support funding, money that normally goes directly to the Cook Islands Government and helps fund services like education, tourism and health. The move comes after the Cook Islands signed several agreements with China earlier this year without consulting New Zealand.

Because the Cook Islands is in free association with New Zealand, Wellington expects to be consulted on foreign affairs, defence and security matters. Foreign Minister Winston Peters wrote to Cook Islands Prime Minister Mark Brown calling the situation a “breach of trust” and saying the Cook Islands’ approach had raised “serious concerns” about how the constitutional relationship was being interpreted.

The initial $18.2 million was paused in June. Peters’ letter confirms this will remain suspended and that a second scheduled payment will also not be made, bringing the total withheld amount to $29.8 million.

However, New Zealand has not cut ties or stopped all support. Funding for specific projects and services delivered through NZ agencies and regional programmes will continue, totalling around another $30 million.

A spokesperson for the Foreign Minister said the decision was made reluctantly, adding that trust must be restored before direct budget funding can resume.

China at the centre of tensions

The latest flashpoint is the arrival of the Chinese research vessel Da Yang Hao in Rarotonga this week. The ship is conducting seabed mapping work with the Cook Islands Seabed Minerals Authority. The vessel has previously raised international concerns because its technology can also track submarines and missiles.

The Cook Islands government has welcomed the collaboration, saying the data will stay under their control and that it is part of learning how to manage marine resources. But environmental groups argue it opens the door to deep-sea mining and undermines relationships with traditional partners like Aotearoa.

The bigger picture

New Zealand says it remains committed to the Cook Islands and acknowledges the close people-to-people relationship. But it also expects the Cook Islands to respect the shared constitutional framework, particularly when working with major powers.

For now, restoring trust will decide when the suspended funding flows again.