Politics

A southern mayor’s love affair with China

Encouraged by current and former National Party figures, Southland District Mayor Gary Tong has formed a friendship with a controversial Chinese businessman. David Williams reports.

On October 15 last year, the day rogue MP Jami-Lee Ross was publicly blamed for leaking National Party leader Simon Bridges’ travel expenses, Southland Mayor Gary Tong was in China for a signing ceremony.

That made Tong national news - not because of his province’s supposedly closer ties to Shantou City but because of his travel companion, Chinese multi-millionaire Zhang Yikun. As the media scrambled to know more about Zhang – the wealthy and well-connected businessman linked by Ross to a $100,000 donation – Tong’s phone ran hot.

The mayor told Newstalk ZB from China that Zhang was “very disappointed” by the scandal. He told Stuff that the Chinese businessman declared he didn’t make the $100,000 donation, adding to Newshub: “I have 100 percent confidence Mr Zhang is not involved in this matter.”

While outspoken in October, Tong has been less forthcoming to Newsroom about his dealings with the Chinese businessman. After an initial, truncated conversation of less than 10 minutes, he hasn’t returned our calls or text messages.

We would have liked to ask the mayor about the National Party’s introduction to Zhang, and to clear up apparent contradictions between what’s been said at his council table and news reports in Chinese-language media.

Perhaps the most interesting unanswered question is this: why would Zhang, who has direct links to the Chinese Communist Party and has been pictured with some of New Zealand’s most high-profile politicians, be courting a provincial mayor?

Much of the story can be told by Tong’s correspondence, released to Newsroom under the Local Government Official Information and Meetings Act.

(Newsroom emailed Zhang’s representatives for comment but they did not respond.)

A soulful start

Tong met Zhang at Soul Bar & Bistro, an award-winning eatery at Auckland’s Viaduct area, on February 18, 2017.

The next day, Tong wrote to Auckland lawyer Chen Ping, a Zhang associate who arranged the meeting, thanking Zhang and all Chao Shan General Association members for a “memorable evening”. Zhang set up the association in 2015 to help Chinese migrants and foster relations between the two countries.

They’d clearly been in touch before, and Tong had high hopes. A few weeks before the Auckland catch-up, Tong emailed Paul Casson, the boss of the council’s economic development arm, Venture Southland, regarding the recruitment of international students from China. Tong said he “might have more news on other matters” after his meeting with Zhang.

It’s not clear what those other matters were. But the lunch meeting was followed later that year by the offer of an an all-expenses trip to China for Tong and partner Sharon Ayto, which seemed to cement the mayor’s friendship with Zhang. It is also when Zhang’s links with the National Party emerged.

All-expenses paid trip

“I feel overwhelmed at this invitation and that of including Sharon,” Tong wrote to Auckland lawyer Chen in September 2017, of the trip to Beijing and Guangzhou arranged by the China Zhi Gong Party Central Committee.

The mayor said he wanted to pay for some of the trip but told Chen he didn’t want to offend anyone. He told council chief executive Steve Ruru: “I don’t want council to be seen as being committed to anything with the organisers.”

There was an agreement that Tong would pay for his return air tickets to Auckland, with all costs in China covered by the country's government.

Tong told Ruru that the invitation came through the relationship between the National Party’s Invercargill MP Sarah Dowie, Zhang, and himself.

That National Party theme continued in the trip’s initial list of participants: Shijia “Colin” Zheng (who was discussed as a potential National candidate during a conversation with Bridges recorded by Ross), former National MP Eric Roy, and former National party president Michelle Boag.

(Confusingly, when Newsroom asks Tong about his first meeting with Zhang, he mentions October/November 2017 in Southland, “with Eric and Sarah Dowie”. When reminded of the January 2017 meeting in Auckland he explains it was a “very unofficial atmosphere”, suggesting it was more of a personal meeting.)

Gary Tong wearing mayoral chains: Photo: Facebook

Zheng, a business partner of Zhang, has taken part in the National Party’s candidate college and was made a justice of the peace last year.

Former Invercargill MP Roy retired from Parliament in 2014, with Dowie occupying the seat since.

Roy, now an Environment Southland councillor, says he had been an unpaid adviser to the Chao Shan association since leaving Parliament and formed a friendship with Zhang, who has visited his Te Anau farm. He says of the National Party, “I don’t have anything to do with them”, adding: “There’s certainly no connection to any elected body like Environment Southland or anything else, as far as I’m concerned.”

Asked about her links to Zhang, Dowie says in an emailed statement: “National is always working to improve links between business and investors and local communities.” Asked if her link to Zhang had anything to do with his donations, she says all National Party donations are declared properly. “You’re welcome to look at those declarations. I won’t be going through each individually.”

Boag, a PR and communications consultant, tells Newsroom she didn’t go on the trip. “I haven’t been in China since about 2002,” she says. “I think someone might have been keen to get me to go to China but I couldn’t figure out what the hell the reason was.”

(It's worth noting that the Labour Party has also been subject to questions about its ties to Zhang and his association, having accepted donations from him in the past.)

A travelling companion not noted on the initial itinerary was Tūhoe activist Tame Iti.

Tong during his 2017 trip to China. His Facebook post from November 2017 says: “Trooping the SDC colours in China.” He thanked the Chao Shan General Association of New Zealand for sponsoring the trip. Photo: Facebook

In December 2017, days after arriving back from China, Tong was approached for an interview by a journalist from the Auckland-based Skykiwi website, which promotes itself as “the most influential Chinese media in New Zealand”.

According to a Google translation, Tong – hailed as “equivalent to a provincial governor” – said Southland had a wealth of opportunities to attract more Chinese tourists, international students and investors in the tourism, education and farming industries.

Tong picked up “a couple of little mistakes” in the article, he told Chen five days before Christmas. That morning, December 20, he’d spoken to ex-MP Roy about a trip south for “the Chairman” Zhang – after a Chinese New Year function in Parliament.

By late January, an itinerary was circulated. Zhang, Zheng and Chen would arrive in Queenstown on February 24 and, over the following three days visit Te Anau, Milford Sound and Invercargill. Tong’s notes included “discuss potential investment or opportunities” at Te Anau and Manapouri. A night on the tourist boat Milford Mariner, a $3600 trip arranged personally by Tong and paid for by Southland ratepayers, was followed by “looking at opportunities” on the road to Invercargill. In Invercargill it was noted that “Sarah Dowie [was] invited to dinner”.

(Tong tells Newsroom Dowie attended a dinner, but couldn’t remember when. A National Party spokeswoman says: “She doesn’t recall it and definitely didn’t go.” But why would she have been invited? “It wouldn’t be unusual for the local mayor to invite an MP for dinner,” the spokeswoman says.)

It’s unclear what the business opportunities might have been, although last October – a day after Tong’s return from his 2018 China trip – the council approved a $22 million scheme to build a kilometres-long sewerage pipeline between Te Anau and Manapouri.

Some part of the discussions became clearer in April. Tong asked Chen to “send me some words for the letter I need to send to the Chairman for the business relationship between the Association and this Council”.

The lawyer sent back a “draft for your approval”, which said Zhang and Chen would be appointed as a business adviser and legal consultant, respectively. “Together, they will form business attraction and investment team for Southland District Council [Chen's emphasis]. They will help overseas companies and investors come to invest in Southland.”

Certificates of appointment were mocked up but went unsigned. “They never went anywhere,” Tong tells Newsroom. But Tong did sign a letter, dated June 1, in which the mayor welcomed Zhang’s “contribution” as a business adviser, “which at this time is an informal arrangement”.

That is not how it was reported on Skykiwi.

‘Honoured with official appointment’

“President Zhang Yikun was honoured again” , shouts a translated headline. The Skykiwi story – sourced from the International Tide Group, headed by Zhang – says he had “received an official letter of appointment” from the Southland Mayor as a commercial consultant to the Southland council. Chen was also “appointed” as a legal adviser.

(The “again” in the headline refers to December 2017, when Zhang was announced an Auckland winner in the 2018 Kiwibank New Zealander of the Year awards – something Skykiwi reported as the “New Zealand National Hero Medal”, the “highest honour of the nation”. That was followed last June by Zhang being made a member of the New Zealand Order of Merit in the Queen’s Birthday honours list.)

A copy of Tong’s letter is embedded into the Skykiwi page. The website reports that Zhang was “hired as a business consultant” and Chen appointed as a legal adviser. In the story, Zhang says Southland is sparsely populated and is a “fresh market” for future growth. Using language the Chinese Communist Party would understand and appreciate, Zhang also said, “We must grasp the ‘One Belt and One Road’ to build a national strategic opportunity”. Southland and Shantou – the latter a thriving port city on China’s south-east coast – should be pushed to establish a sister city relationship and promote economic development, he said.

Southland council boss Ruru tells Newsroom that Tong’s letter was only an acknowledgement of assistance. “This letter did not purport to ‘appoint’ them as such.” (It’s unclear if the council has sought a correction from Skykiwi.) Was he consulted by the mayor? Ruru says: “As far as I can recall, the mayor did not discuss the letter that he sent with me.”

Zhang treasured in China

China watchers suggest Zhang is the most important New Zealand figure for activities from the “United Front”, the Chinese government’s department set up to keep unity and promote the Chinese Communist Party’s (CCP) values at home and abroad. Part of its work overseas is foreign influence activities, something Chinese leader Xi Jinping has called “magic weapons”.

Chen Weijian, the Auckland-based chief editor of pro-democracy magazine Beijing Spring, has written that Zhang’s Chinese political titles – as vice chairman of Hainan Provincial Federation of Industry and Commerce, and a standing committee member of the Hainan Provincial Chinese People’s Political Consultative Conference – “distinguish him from all the other community leaders of the CCP’s United Front organisations in New Zealand”.

Zhang is well-connected politically, having links to top politicians on both sides of the aisle – including National Party leader Simon Bridges, former prime minister Sir John Key, and two former Labour leaders, the now Justice Minister Andrew Little and Auckland Mayor Phil Goff.

“Undoubtedly, Zhang Yikun is treasured by the senior Chinese politicians,” Chen says.

In June of this year, Zhang held an Auckland reception for former party secretary of Hainan province, Luo Baoming, the vice chairman of the Overseas Chinese Affairs Office. In front of two Chinese-New Zealand MPs, Jian Yang (National) and Raymond Huo (Labour), the vice chairman said: “The fulfilment of China’s dream needs the overseas Chinese community leaders like president Zhang Yikun who has the strength and passion for the state patriotism.”

Freeman Yu, a pro-democracy member of Auckland’s Chinese community, who started a Parliamentary petition calling for an inquiry into foreign influence.

The goal of the United Front is to help safeguard the interests of the Chinese government.

“It is a super-large political public relations company with almost unlimited budget. United Front is not a traditional spy. It is not illegal, extremely opaque, but it can manipulate Chinese media, manipulate the voting tendencies of the Chinese community, influence the elites of New Zealand, and crowd out people and policies that the CCP does not like.”

Same game, different people

Security consultant Paul Buchanan, of 36th Parallel Assessments, says it “seems untoward” for Tong to have an entourage of National Party figures around him encouraging the relationship.

As a small, liberal democracy with a sophisticated electorate, New Zealand is used as a testing field for large powers, including influence operations, Buchanan says. The Chinese want to reorient people’s perception of the country and influence decision-makers. “If it trials well here, then it can be carried on elsewhere.”

But he adds that the Chinese-New Zealand figures involved appear to be playing by the rules and within the letter of the law. “[This is] no different than many other types of lobbying and influence-peddling, be it from religious organisations to other foreign governments.

“I always think to myself, if these people were not Chinese, if they were French or German or Americans, and they were doing the same thing, would we be as upset as we are about the Chinese presence in politics and the like? And I would reckon that we probably wouldn’t be.”

New Zealand has been described overseas as a “soft underbelly” for Chinese interference, with Buchanan pointing to the country's “very permissive campaign finance laws, corporate laws, banking laws".

But he sees nothing inherently wrong with politicians, including local or regional ones, wanting to make friends with the Chinese and encourage investment – “so long as there’s nothing ‘black’ about the relationship and it’s relatively transparent”.

“A large political divide has been created between the central and local governments.” – Freeman Yu

Yu, however, is sure Tong is being used to advance the aims of the CCP.

“If the central government's resistance to CCP infiltration is becoming stronger and the national security awareness is being awakened, they will target weaker and more vulnerable local officials.”

He points to similar tactics in places like Taiwan and Australia , where local officials have embraced different policies to central government. Back in New Zealand, Northland’s regional council agreed to work with China Railway Group on infrastructure proposals.

With some commentators suggesting the New Zealand-China relationship has deteriorated under the Labour-led Government, targeting local councils may appear a more fruitful approach.

“A large political divide has been created between the central and local governments," Yu says.

Sister city ‘some way off’

In August last year, Tong wrote to Ruru and two councillors about his upcoming trip to China. “While the invitation indicates a sister city relationship with Shantou, that is some way off BUT a major focus of the Chao Shan Association. Shantou has indicated a preference to partner with Southland on two occasions in the last three years.”

That’s a huge opportunity for Southland, considering Shantou is home to more than five million people.

The following month, the Chao Shan Association – which paid for Tong’s trip – again played secretary for the mayor. A proposed memorandum to sign in Shantou was drafted and emailed to Tong by Zhang’s associate Zheng, who, by August at least, was Chao Shan’s chairman.

Tong sent it to Ruru and council community general manager Rex Capil. “I can’t see, other than the variance in grammar, any issues with this,” Tong wrote. “It is not cementing a sister city type arrangement at this point. I believe it is a good start and more should come from the visit this year.”

Ruru and Capil’s replies aren’t included in the material released to Newsroom. But later that month, Tong told Zheng: “Yes, very good, and happy to be a signatory to this.”

The email about the memorandum was “just a discussion and at a very early stage”, Ruru tells Newsroom. “Nothing further was discussed with me or the councillors and nothing further has happened.” If the process goes further, Ruru says, “then it will be discussed before any signing at council”.

Gary Tong signing the memorandum of understanding with Shantou City, in this screenshot from a Shantou Foreign Affairs and Overseas Chinese Affairs Bureau press statement.

But Tong signed the agreement on the council’s behalf in China. In a statement by the Shantou Foreign Affairs and Overseas Chinese Affairs Bureau, trumpeting the signing, the ceremony was attended by various municipal party officials – and, of course, Zhang.

A focus of the “Memorandum of Understanding on Strengthening Friendly Exchanges and Cooperation”, according to a translation of the press statement, is “marine life and seafood development” as well as “marine tourism”. Tong was quoted as saying the two regions could broadly cooperate in “marine fisheries, agriculture, forestry, animal husbandry and tourism”.

Given the earlier comment “nothing further has happened”, Newsroom asked Ruru to clarify. Louise Pagan, the council’s communications manager, replied: “Chief executive Steve Ruru does not want to make any further comment.”

Councillors back Tong

So is Tong going off on a limb, signing agreements and making appointments without the input of his councillors? Newsroom asked three of them.

“To the best of my knowledge everybody’s aware of what Gary’s doing,” Stewart Island councillor Bruce Ford says. However, he couldn’t recall details of the Shantou memorandum or the links to Zhang and Chen and couldn’t remember being briefed by Tong. Ford’s adamant, however, that the chances of the mayor making formal moves without the council’s knowledge is “totally unlikely”, he says.

Ford says officialdom has to meet officialdom when it comes to trade. “That’s the mayor’s job,” he says, adding: “We’re quite pleased with Gary.”

Darren Frazer, of the Winton Wallacetown ward, says: “I’m not fully aware of all that he did on the trips. But I think relationships are key and establishing good relationships with our key trading partners is pretty vital for Southland.”

Waihopai Toetoes representative Julie Keast, the only female councillor, says she has no opinion about Tong’s letter of appointment or the Shantou agreement. Of Tong she says: “He’s doing a good job. I’m a supporter, yeah.”

“I just don’t want any, to use a term, any crap with this because he’s actually quite a genuine guy.” – Gary Tong

When Newsroom spoke to Tong in mid-December, he bemoaned the fact we’d already spoken to his councillors. “You’ve left me to the last. I’ve just left this meeting and my councillors have been telling me you’ve been ringing them.”

Despite assurances by his councillors – and Pagan’s statement that “Mayor Tong has verbally briefed his councillors about his visits” – Tong says he hasn’t had a chance to speak to them about his latest trip. “I’ve been attending to OIA requests from about seven different media outlets and my business as usual.”

Who is Zhang Yikun to him? The initial discussions, he says, were about visitors the Chao Shan Association could bring to Southland. “It’s progressed to a friendship. Yeah, definitely is a friendship.”

Despite the references to viewing business opportunities between Te Anau and Invercargill, Tong says there’s been no indications of any business association with his council to date – “that’s not what our discussions have been about”. “It’s been about promoting Southland as a place to visit, as a place to possibly purchase the likes of primary industry products.”

Roy, the former Southland MP, says the Chao Shan group has not yet made any concrete achievements but is "always looking for investment", while he is unaware of any broader political strategy at play.

“Look, from my point of view China is a very big trading partner of New Zealand and if you look to the future it’s going to have a part in a whole range of things. Their interest in protein is an ongoing one.”

Zhang ‘a genuine guy’

Tong says he has no problem answering questions about his links with a high-profile person, like Zhang. “I just don’t want any, to use a term, any crap with this because he’s actually quite a genuine guy.”

Through the Jami-Lee Ross “bullshit”, Tong has made comments about the type of man Zhang is but it hasn’t been widely reported, he says. “I’m not doing this to protect the chairman. I hold him in high esteem, to tell you the truth. So does the Government. That’s why we gave him this [Queen’s Birthday honours list] award.”

He adds: “I’m more than happy to talk to you about Mr Zhang. I’ve got the greatest respect for him as a friend. To date we have done no business stuff.”

Newsroom hasn’t been able to reach Tong for an interview since that day, suggesting the topic is more sensitive than he initially let on.

No matter, Tong’s links with China are set to continue this year.

On the back of attending the opening ceremony of the Xiyangyang Lifestyle and Travel Expo in Auckland last October, the Southland mayor has been invited to attend an event in Xi’an in September to celebrate the China New Zealand Year of Tourism. Lisa Li, China Travel Service’s managing director and the secretary general of the China Chamber of Commerce in New Zealand, sent the invite last October.

In it, Li says: “Please save the date if this coincides with a visit to China because this grand ceremony is usually reserved for heads of state.”