RAROTONGA, Cook Islands, Feb. 20 -- New Zealand and China are leading the world with a new method of development and cooperation which could continue well into the future, New Zealand Foreign Minister Murray McCully said Thursday.

In an exclusive interview with Xinhua after a ground-breaking ceremony for the Te Mato Vai water supply project on Cook Islands' main island of Rarotonga, McCully said New Zealand welcomed China' s generous support for New Zealand's Pacific island neighbors.

The largest ever infrastructure project in Cook Islands, Te Mato Vai is a "triangular" partnership between New Zealand, China and Cook Islands to replace the aging water network with an investment of 65 million NZ dollars (53.96 million U.S. dollars).

"I was a strong promoter of this project from the beginning, not just because fresh water, properly treated, is the lifeblood of the tourism industry, which is so important in the Cook Islands, but because it was a unique leadership opportunity for New Zealand and the People's Republic of China to lead the way in development and cooperation," said McCully.

"The development needs in the region are significant and China' s generosity is greatly appreciated."

Cooperation on a triangular basis was a new feature of development anywhere in the world, he said.

"The fact that New Zealand and China are able to cooperate in partnership with a Pacific island in a world leadership first is very important to us."

New Zealand's relationship with China was "outstanding," said McCully.

"It is one that is built on despite our different sizes and different backgrounds a high degree of mutual trust and respect, and the fact that we are able to grow our two-way trade in the way that we've seen over the last few years shows that there is a basis for even greater cooperation in the future," he said.

McCully, who is also chairman of the Pacific Islands Forum Ministerial Contact Group (MCG), the primary vehicle for Pacific nations to engage with Fiji on elections progress, said he was optimistic for the prospect of elections in that country in September.

The MCG met in Fiji earlier this month to review progress and produced a report "that presents an optimistic picture of progress in Fiji."

"It notes the very strong progress that has been made in delivering the machinery for elections, but also in the improvement in the ability for political debate to occur between the political parties," McCully said.

"We've underlined the need for these good trends to continue, but with that condition, we are very optimistic for the elections in September and that we'll be able to see a full normalization of relations with the rest of the region."

New Zealand along with a group of Pacific nations imposed sanctions on Fiji after the military takeover in 2006.