China is rapidly expanding its diplomatic, economic and military footprint in the Pacific, often jostling for influence with the United States and its allies.
Nearly half of New Zealand's trade passes through the South China Sea, said Hipkins, who led a trade delegation to Beijing last month and met with President Xi Jinping.
The way China exerts its clout in the world is a "major driver" in escalating strategic competition, especially in the Asia-Pacific, Hipkins told the China Business Summit in Auckland.
Unimpeded access to shipping and air routes was "vital" to New Zealand, he added.
"New Zealand is concerned about a worsening strategic environment and rising tensions in the Indo-Pacific region in particular in places like the South China Sea and Taiwan Strait," the prime minister said.
"We have direct interests in these areas and are therefore focused on the need for tensions to be carefully managed and de-escalated in the wider interests of the Pacific," he continued.
"And we look to China to play its part in this regard."
China has in recent years ramped up military and diplomatic pressure on Taiwan, which it claims as its territory, vowing to take it one day -- by force if necessary.
Beijing also maintains sweeping, contested claims over the South China Sea.
At the same time, China is seeking to grow its influence in the South Pacific, notably making inroads in Solomon Islands, with which it signed a secretive defence pact last year.
This month, China rolled out the red carpet for pro-Beijing Solomons Prime Minister Manasseh Sogavare and inked a raft of deals, including one allowing it to extend its police presence in the island nation until 2025.
Wellington has been increasingly vocal in recent years about human rights issues in China and any potential militarisation of the Pacific.
Hipkins said New Zealand would talk "candidly, but respectfully" with China's leadership about their differences.
"Our region is becoming more contested, less predictable, and less secure," he said.
"In this increasingly complex global environment, our relationship with China will continue to require careful management."
Wellington's Western allies have long been concerned about what they regard as New Zealand's overdependence on trade with China.
But Hipkins said New Zealand's exporters now enjoyed better terms of trade in other "equally significant" markets after striking free trade agreements with Britain, the European Union and a major trans-Pacific trade bloc.
Solomons PM attacks 'unneighbourly' China questions
Honiara (AFP) July 17, 2023 - Solomon Islands' leader Manasseh Sogavare on Monday attacked foreign questions about a new police deal with China as "unneighbourly" interference.
During a July 9-15 visit to China, the prime minister signed a raft of deals including an agreement allowing Beijing to maintain a police presence in the Pacific island country until 2025.
The United States, Australia and New Zealand have expressed unease about the policing "implementation plan", urging Beijing to soothe concerns by releasing more details.
"Australia and United States should not fear China's police support to Royal Solomons Police Force," Sogavare told reporters after his arrival back in Honiara.
"The narrow, coercive diplomatic approach of targeting China-Solomon Islands relations is -- and I want to use this word -- unneighbourly," the Solomons leader said.
"This is nothing but interference by foreign states into the internal affairs of Solomon Islands," he added.
"China has not invaded -- it has not invaded or colonised any other foreign state."
China gave a warm welcome to the visiting Solomons leader, who severed diplomatic ties with self-ruling Taiwan in 2019 in favour of official relations with Beijing.
The Solomons was rewarded with large sums of aid and investment in the country by China.
Sogavare said some foreign donor countries had delayed assistance to the Solomons, leaving it "struggling" to finance the 2023 budget.
- 'Total madness' -
"I am really delighted to announce that the People's Republic of China stepped up and committed to itself to meet this shortfall by providing the budgetary support that is needed for 2023," he said.
The Chinese budgetary support will be provided in the form of projects, he said, without giving precise financial details.
The Solomons leader has come under criticism from his country's opposition for signing the China policing deal and for the cost of the China visit.
Opposition leader Matthew Wale said financial documents suggested that large sums of public money had been spent by the Solomons to send a 30-strong delegation to China, including some "only travelling as tourists".
"This is total madness," he said in a statement.
"Just last week, teachers' pay was delayed. Our hospitals need basic drugs like panadol, our roads are at its worst state, we have frequent power cuts, water problems, and most importantly we are at a crucial time to fix the economy of this country."
Sogavare insisted, however, that the "bulk of the cost" of the trip was being paid for by China and by business leaders who joined the delegation.
The cost of the trip was a "drop in the ocean" compared to the benefits it reaped, he said.
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