Chinese businessman courted mayors across New Zealand
Sunday, 16 June 2024
A Stuff Circuit investigation reveals decades of foreign interference by China in New Zealand. Video credit: Stuff Circuit
Zhang Yikun’s interest in befriending politicians went beyond large donations to National and Labour. He was also courting mayors at both ends of the country, cultivating relationships on behalf of officials in China. Stuff Circuit’s Louisa Cleave and Paula Penfold look at the connections, and who benefited from that.
When called upon, they stepped up for Zhang Yikun.
Phil Goff, a former Labour leader, Minister, and Auckland Mayor who was about to become New Zealand’s High Commissioner to the UK proffered a character reference.
So did ex-National MP Eric Roy, who with Goff co-signed Zhang’s nomination for a Royal Honour, and former Southland Mayor, Gary Tong, who went on two trips to China with the businessman.
Artist and veteran activist Tame Iti, on the trip with Tong, and Māori Party president John Tamihere rounded out the high profile supporters when Zhang was sentenced on a charge of obtaining by deception, in relation to a $100,000 donation to the National Party made in June 2018.
The conviction was quashed by the Court of Appeal in November 2023, with the judges saying there was ‘’no doubt“ that the National Party and Electoral Commission were ”deceived by [Zhang and his co-accused]“.
However, no evidence was put forward that they personally benefited, directly or indirectly, from the donation and that meant “no conviction was possible”.
The references for sentencing were sought by Stuff Circuit to understand the relationships Zhang cultivated with influential New Zealanders during a period in which he also held prominent roles with organisations tasked with carrying out united front work, a decades-long strategy of the Chinese Communist Party to build influence and promote its ambitions.
Zhang opposed Stuff Circuit’s application for the references and ultimately it was declined by the trial judge. Zhang himself did not respond to requests for an interview.
But while the references remain secret, Zhang’s influential relationships can still be examined: through evidence brought to trial, interviews, emails and reports released by councils. And with the help of researchers who have spent years compiling evidence of united front work to promote the Chinese Communist Party’s goals and agenda.
A Saturday lunch at Auckland’s Soul Bar can feel like the centre of the city’s social scene. You might spot an international celebrity. The champagne and oysters flow at the terrace tables overlooking the Viaduct.
It’s where, on a summer’s day in 2017, Zhang and the mayor of Southland, Gary Tong, sat down for lunch. Their socialising continued into the evening with Tong’s wife joining the festivities.
An email from Tong the next morning thanked Zhang for a very wonderful and memorable evening.
“Our meal together was exceptional and the conversations very focused and the array and flavours of the food delicious.
“The discussions we had during the day will be followed up as I am very sure we will make the connections in business for the future.”
Former National MP Jami-Lee Ross says Zhang asked him for contacts in Southland ahead of a private business trip, around 2016, and Tong was among the connections made through Ross’ introductions.
“Why would an Auckland-based non-English-speaking businessman want to form a relationship with someone in Southland? What does he gain out of it? When you front up in China and you've got the mayor of some city there, that stands for a lot,” muses Ross in an interview with Stuff Circuit.
Tong and Zhang first visited China together at the end of 2017. Emails organising details of the trip show Zhang arranged for Tong’s invitation to come from the Central Committee of the China Zhi Gong Party.
Analyst and author Alex Joske, who has written at length about the Chinese Communist Party and united front influence efforts in Australia, says the Zhi Gong Party usually presides over “overseas Chinese affairs” events, and party leadership is essentially senior united front officials.
Zhang welcomed Zhi Gong leaders to New Zealand in 2017 and attended the party’s 90th anniversary in Beijing in 2015.
“I think building up connections to politicians is really a no-brainer if you're in the business of political influence,” said Joske, commenting on Zhang’s relationships with the high profile New Zealanders who would later speak up for him.
The intended schedule for Tong in China included a visit to the Chinese Central Government and the National People's Foreign Affairs Committee.
“We will meet party and state leaders in Beijing,” the Mayor was told in an email a month before the visit. “They have also arranged a tourist tour to the Great Wall and The Forbidden City for us. We will also visit Guangzhou to meet Provincial leaders and successful entrepreneurs there.”
Tong suggested paying for some of the trip, which was put to Zhang.
“He agrees that you can pay for your returning tickets. The rest will be fully funded.”
Tong detailed the visit at length, writing in The Southland Times in December 2017 that he toured a museum dedicated to China’s influence around the world and met with officials who “travelled more than two hours on a bullet train to meet us”.
“Some argue against the increasing influence China is having on the international stage, but I saw nothing to suggest anything more than a genuine interest in being model international citizens,’’ Tong wrote.
He was enthusiastic about the business and education opportunities a relationship between Southland and China could bring. The following year, in June 2018, he offered Zhang a role as business advisor to Southland.
Tong called it an “informal arrangement” but believed there was “an opportunity to develop this further”.
Zhang Yikun began his adult life in the People’s Liberation Army and, in an online profile, has spoken about being invited by the Overseas Chinese Affairs Office to participate in a military parade in Tiananmen Square, on September 3, 2015.
“As a veteran I felt immense pride when I saw how strong the country had become,” a translated copy of the article says.
“As overseas Chinese, we should not only contribute to the economic development of the host country, but also unite the vast number of overseas Chinese and contribute our humble efforts to establishing friendship between the host country and the motherland.”
Following his time in the military, he worked in the transport department of a provincial government and was put through post-graduate studies at the Academy of Social Sciences.
Zhang told an interviewer he was on a modest wage of 800 RMB (around $200) per month when he moved to New Zealand in 2000, joining his wife who was studying at Massey University.
Zhang said he worked hard to establish restaurants in Auckland, and he thanked his partners for helping him navigate business conditions in New Zealand.
(Zhang does not speak English and often relied on business partner and co-accused Colin Zheng to act as a translator during their High Court trial.)
The article doesn’t mention his position on the Hainan committee of the People’s Political Consultative Conference, or CPPCC, between 2013 and 2016.
The CPPCC, explains Joske, is an organisation through which political consultation takes place within China’s political system.
It is chaired by the Politburo Standing Committee member responsible for the united front system and attended by more than 2000 party-approved representatives from different sectors of China’s society.
Professor of China politics at the University of Canterbury, Anne-Marie Brady, says Zhang’s links to the CPPCC demonstrate how well he is connected to the political system.
“When I looked at the extent of his interests and connections in China, it's really extraordinary. There really isn't anybody like that, anyone else like that in New Zealand, but also internationally,” says Brady.
“The CCP wants to shape and control and utilise the overseas Chinese diaspora around the whole of the world, not just the People’s Republic of China. People who've got ancestral links back to Chao Shan are a very, very important interest group for the CCP and Zhang Yikun is a prominent figure.”
Zhang established the New Zealand Chao Shan Association in 2015 and remains its honorary president, connecting to local and national politicians through the organisation.
Brady has a view on his interest in local government, saying it centres around promoting China’s Belt and Road Initiative through the development of sister-city relationships.
“Zhang Yikun was encouraging those mayors — that he was on good terms with — to get involved in Belt and Road activities.”
By 2018, Zhang held the prominent position as head of the international Teochew Federation and travelled to Hong Kong for a gathering which included municipal government leaders and government ministers.
He was quoted in the media as promoting stronger overseas ties and the Belt and Road Initiative. He specifically noted the sister-city relationship he was trying to establish with Southland Mayor Gary Tong.
The Shantou government secretary thanked Zhang “and spoke highly of his broad thinking and broad vision”, according to a media report. “He will pay attention to the implementation of the three suggestions put forward by Chairman Zhang Yikun.”
Tong was on his second Chao Shan Association-funded trip to sign an MOU with Shantou in October 2018 when news broke that Jami-Lee Ross was alleging wrongdoing over a $100,000 donation to the National Party.
The Mayor leapt to Zhang’s defence, stating emphatically that Zhang was “not the alleged donor of the funds’’.
(The sentencing judge would later say the donation came from Zhang and he ‘’must have known the donation was being concealed’’ and he wanted to avoid public disclosure.)
In answer to questions arising from his relationship with Zhang, Tong told the Southland District Council that the purpose of their two overseas trips was to discuss the sister-city relationship.
“To date these have not progressed,” he said.
With the spotlight on his relationship with Tong — but the proposed sister-city relationship between Southland and Shantou stalled — Zhang shifted his attention to the Far North District Council and Mayor John Carter.
Zhang and his Chao Shan General Association had won a bid to host the Convention of the Teochew International Federation in New Zealand, and they were looking for relationships to promote at the event.
According to internal emails, a representative of the Chao Shan Association approached Carter in March 2019, stating that its president Zhang “would like to seek opportunities to establish a sister-city relationship”.
Carter had just attended a Chao Shan Association event in Auckland and the approach came immediately after: “They would like to see if a MOU is possible before you go back to Northland.”
Subsequent email exchanges show an urgency to get a memorandum of understanding in place between Far North District and its proposed sister-city, Chaozhou, by September 2019.
Carter was told that the Chao Shan Association needed to present the sister-city plan to China’s Ministry of Foreign Affairs ahead of its convention.
“Chao Shan General Association is expecting a mutually beneficial relationship to be established in the near future, I am confident that Chao Shan people in NZ would like to explore more investment opportunities in your region, and reciprocal visits could be held in the future.”
By mid-June Carter was urging his chief executive to respond to requests for information to pass on to the Chaozhou Municipal Government, emailing him one line: “Can I please have this addressed.”
The relationship appeared set to proceed, with the council provided with an MOU from Chaozhou and a meeting arranged to sign it on August 2, 2019. But within a day of the invitation being issued, the meeting was called off.
In a brief email to staff, Mayor Carter said he advised the Chao Shan Association “we are unable to make any commitment to any sort of agreement whatsoever” because they were in an election cycle.
Despite this, at the following month’s council meeting councillors were asked to support the MOU with Chaozhou.
Contacted by Stuff Circuit, Carter said he alone never approved any requests for a sister-city relationship.
“At the time delegations from China throughout New Zealand were many, including requests for Sister City relationship(s).
“It went to the CEO to process in accordance with Council policy.”
The relationship was never approved.
When Carter was re-elected in October 2019, a letter of congratulations was sent on behalf of Zhang Yikun and Colin Zheng.
‘’As usual, Chao Shan General Association of New Zealand is here to support you. Just let us know what helps. We are grateful to have this long standing, mutual support and trustworthy relationship with you’’.
Carter told Stuff Circuit he could not recall the relationship with Zhang in any detail.
Asked if he ever questioned Zhang’s connections to government officials in China, Carter replied by email: “This is not my responsibility.”
Zhang continued to hold prominence in China while building relationships with the New Zealand mayors.
In 2018, he featured on an official list of overseas members of the 10th committee All-China Federation of Returned Overseas Chinese, an agency used to influence overseas Chinese, says Joske.
In his position as chairman of the International Teochew Federation, Zhang delivered a speech at a 2019 One Belt One Road summit in Hong Kong attended by senior government officials, including the Vice Chairman of the Chinese Federation of Overseas Chinese and the Minister of the United Front Work Department.
Asked if he knew Zhang held positions with government committees while they travelled together, Tong said: “Does he?” and did not respond to further questions.
“[Tong] thought he'd formed a friendship,” says Ross.
“Gary Tong probably was just naively thinking, these people want to invest in my town. I'm doing well for Southland by getting investment for my town. Was there any ever any investment? I don't know.”
Asked by Stuff Circuit what benefit Southland received from the relationship with Zhang, Tong listed the contacts he made and the places he visited in China.
“I … met with local government officials, attended banquets where I met industry leads, met with family in their homes, shown parts of China not seen in tourists brochures, etc.”
Tong never provided any evidence of a benefit to Southland.
He provided a reference for Zhang because: “I have the utmost respect for him. There is nothing I have heard or seen that causes me to stray from that opinion. I told the SFO the same.”
Asked if he was still in contact with Zhang, Tong replied: “If I need to contact him, I can.”
Former Auckland Mayor Phil Goff provided the character reference he gave the court for Zhang’s sentencing but we’re unable to publish the details because the court did not release it.
Goff put his name forward to assist Yikun Zhang at various times in his political career: nominating him for a royal honour, supporting the Chao Shan bid to host the Teochew international convention and writing the character reference for sentencing.
Now New Zealand’s High Commissioner to the United Kingdom, Goff stressed that our questions about his reference for Zhang were not relevant to his present role.
“The reference was based on my knowledge of Mr Zhang and was factual in basis.”
Subsequent inquiries by Stuff Circuit, along with evidence presented at trial, show Zhang was seated at the VIP table for Goff’s 2016 mayoral campaign fundraising auction, which raised more than $366,000.
In 2017, Zhang was among a 96-strong business delegation led by Goff to an economic summit in China. In response to an official request for information, Auckland Council said the delegation was managed through Auckland Council’s International Relations department and the (then) mayor’s office.
“The delegation lists (of invitees and potential delegates) were based on invites from the previous event in 2016, and additional names provided from the Mayor’s office.”
Goff said he was not involved in the selection of delegates on the trip.
He also wouldn’t know if Zhang was a donor to his campaign, he said, because details of individuals were not passed on as a matter of policy.
“Regarding support for Mr Zhang’s nomination for an honour, over my time in politics I signed many such nominations for people where a case could be made out for recognition of those who had benefited New Zealand through their work or philanthropy. Mr Zhang met that criteria for his philanthropy and work on behalf of his ethnic community.”
Asked whether he may have been the target of united front activity during his time in politics, Goff replied: “I am not conscious of ever being the target of what you describe as united front activity. During my political career, I sought to make decisions in accordance with my values and stated beliefs and not in response to the advocacy of any lobby or interest group, and certainly not in support of the interests of other countries.”
There’s a phrase in Chinese which is useful in helping understand the rationale of courting small-town mayors in a small country. It’s shentou — 渗透 — which, when applied to united front work, means “saturation” or “penetration”. Brady, herself a fluent speaker of Mandarin, observes it’s not a negative term, but a strategy. “It’s not just one activity. It’s so many activities, and they might not all work, but added up together they’re going to have an impact.
“So China targets local-level organisations … as a way to get around central government because central government has intelligence agencies and others to advise them about united front work. But our Mayor of Invercargill, he’s not going to have someone on hand to explain to him what united front work is.”
A statement released during Zhang’s 2022 court case said he was not a member of the Chinese Communist Party and had renounced his Chinese citizenship.
What do you think? Email sundayletters@stuff.co.nz. Please include your full name and address.