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In 2004 it began discussing free trade with China, one of the first countries to do so.

The conservative National Party and the left-leaning Labour Party have dominated New Zealand political life since a Labour government came to power in 1935. During 14 years in office (1935 - 1949), the Labour Party implemented a broad array of social and economic legislation, including comprehensive social security, a large scale public works programme, a 40-hour working week, a minimum basic wage, and compulsory unionism. The National Party won control of the government in 1949 and adopted many welfare measures instituted by the Labour Party. Except for two brief periods of Labour governments in 1957 - 1960 and 1972 - 1975, National held power until 1984.

New Zealand's head of state is the Queen of New Zealand, currently Elizabeth II. The New Zealand monarchy has been distinct from the British monarchy since the New Zealand Royal Titles Act of 1953, and all Elizabeth II's official business in New Zealand is conducted in the name of the Queen of New Zealand, not the Queen of the United Kingdom. In practice, the functions of the monarchy are conducted by a Governor-General, appointed on the recommendation of the Prime Minister.

In recent years the government has sought to address long-standing Maori grievances. Parliament established a Waitangi Tribunal in 1975 to hear claims of official violations of the Treaty of Waitangi, and in 1985 the Tribunal gained the right to consider Crown actions dating back to 1840. A programme of widespread economic de-regulation and privatisation of public enterprises undertaken by the Labour government of 1984 - 1990 continued under its National Party successors. In 1986 the Constitution Act came into force, and in 1993 the majority of New Zealanders decided to change the electoral system from the British system of single member constituencies elected by 'first past the post', to a form of proportional representation called Mixed Member Proportional (MMP).

New Zealand became a British colony in 1840 following the signing of the Treaty of Waitangi between the Crown and Maori chiefs. The Crown was represented by William Hobson, who was Lieutenant-Governor of New Zealand. At that time New Zealand was a dependent colony of New South Wales.

Christianity is the predominant religion in New Zealand, although over a quarter of the population has no religious affiliation. The main Christian denominations are Anglicanism, Presbyterianism, Roman Catholicism and Methodism. There are also significant numbers who identify themselves with Pentecostal and Baptist churches and with the Mormon church. The New Zealand-based Ratana church has many adherents among Maori. According to census figures, other significant minority religions include Hinduism, Buddhism and Islam.

Since 1876, local government has administered the various regions of New Zealand. Due to its colonial heritage, New Zealand local government was modelled fairly closely on British local government structures, with elected city, borough, and county councils. Over the years some of these councils merged or had boundary adjustments by mutual agreement, and a few new ones were created. In 1989, the government completely reorganised local government, implementing the current two-tier structure of regional councils and territorial authorities.

Although less obvious today, in the past team sports, particularly Rugby football, gambling on horse races, and sharing a beer after a hard day's work with some good friends or work mates have been significant images of New Zealand life. This predominantly working-class male cultural image has previously been so strong that it has overshadowed other, perhaps higher, cultural aspects of New Zealand society.

Since 1984 successive governments have engaged in major economic restructuring, transforming New Zealand from a highly protectionist and regulated economy to a liberalised, free-trade economy. Despite periods of dynamic growth in the mid 1980s and early '90s, average yearly economic growth has been poorer than expected and is highly reliant on massive levels of immigration to boost GDP. However, since 1999 New Zealand has enjoyed a period of relatively strong and sustained growth.

In October 1990, the National Party again formed the government, for the first of three, three-year terms. In 1996 New Zealand elected its first MMP Parliament. The system was designed to increase representation of smaller parties in Parliament and appears to have done so. Since 1996, neither the National nor the Labour Party has had an absolute majority in Parliament, and for all but one of those years, the government has been a minority one. The current Labour government followed its November 1999 election success by outpolling National 41 per cent to 21 per cent in the July 2002 general election. Labour formed a coalition, minority government with Jim Anderton's Progressive Coalition, a left-wing party (subsequently named "Progressive Party") which holds two seats in Parliament.

For a variety of reasons many Maori and Pacific people have been socially disadvantaged, forming an underclass in some areas. Cultural considerations for both Maori and Pacific people now have a significant influence on educational, medical and social organisations, particularly in areas with high concentrations of these population groups.

After the Second World War, significant immigration from the Pacific Islands began, so much so that there are now more nationals from some Pacific island nations living in New Zealand than on their home islands. The wide variety of Pacific Island cultures has combined in New Zealand, mostly in South Auckland, to form a distinctive subculture that is separate from the Maori culture.

The first Europeans known to reach New Zealand were the crew of Dutch explorer Abel Tasman's ships Heemskerck and Zeehaen, which anchored at the northern end of the South Island in December 1642 but sailed northward to Tonga following a clash with local Maori. Tasman sketched sections of the two main islands' west coasts. Tasman called them "Nova Zeelanda." The name Nieuw Zeeland appeared on charts of the area shortly afterward, having earlier been applied to an island near New Guinea. Lieutenant James Cook of His Majesty's Barque Endeavour made a fuller reconnaissance, surveying the shores of both islands in 1769 - 1770. Cook returned to New Zealand in both his subsequent Pacific voyages.