(Bloomberg) -- New Zealand Prime Minister Jacinda Ardern said China’s increasingly assertive stance in the Pacific must be addressed through dialogue and diplomacy.

“In the wake of the tensions we see rising, including in our Indo-Pacific region, diplomacy must become the strongest tool and de-escalation the loudest call,” Ardern said in a speech to the Lowy Institute Thursday in Sydney. “We won’t succeed, however, if those parties we seek to engage with are increasingly isolated and the region we inhabit becomes increasingly divided and polarized.”

As New Zealand looks to the wider Indo Pacific, “we seek to ensure that the intensity of our engagement is increasing, and we call for others to do the same,” she said.

Australia and New Zealand were shocked by the signing of a security agreement between the Solomon Islands and China in April, a major diplomatic victory for Beijing and its first such deal in the Pacific. Ardern told a NATO summit last week that China was becoming more assertive and more willing to challenge international rules and norms.

China, which is New Zealand’s largest trading partner, hit back, saying Ardern’s comments were “wrong” and “regrettable.”

Ardern said on Thursday that trade is no longer exclusively a vehicle for economic growth, but also a means of upholding shared values.

“Even as China becomes more assertive in the pursuit of its interests, there are still shared interests on which we can and should cooperate,” she said. “The post-war order and the rules that underpin it have supported China’s rise, and as a permanent member of the Security Council, China has a crucial role to play in upholding that order.”

Ardern said the world is “bloody messy” at the moment but “amongst all the complexity, we still often see issues portrayed in a black and white way.”

“This is one of the challenges to an independent foreign policy,” she said. “It is also a challenge for all those who seek peace and stability through dialogue and diplomacy -- at a time when there is so little room for error and misunderstanding.”

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