A business leader believes now is not the time to pick a fight with China after the Government's backing of Taiwan's inclusion in the World Health Organisation.

NZ International Business Forum executive director Stephen Jacobi says Taiwan is a sensitive topic for China and we do not want to risk upsetting our trade partner.

He says the NZ Government needs to be clear whether it supports Taiwan being a WHO observer or a member.

"The Chinese won't be any happier if NZ supports observer status and there will be many hoops to jump over, but it's a better proposition than membership."

Foreign Minister Winston Peters's backing this week of Taiwan being included in the WHO is seemingly at odds with China's one-China principle.

Jacobi says Taiwan is not a sovereign state and cannot be a WHO member.

"There is good reason for it to be an observer again because of its handling of Covid 19, although this would also raise the ire of China."

Jacobi says Taiwan is a sensitive subject for China and now is not the time to pick a fight with a trading partner critical for our economic survival.

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