The MSD does not subject Chinese state pensions to Section 70, it denies pre 1997 that China had a state pension.
China has had a state pension system since 1951 and what's more it is social insurance contributory based and pre 1991 the enterprises, companies, paid these contributions at about 3% of its income, it covered the workers for all social security benefits.
After 1991 workers paid social insurance contributions as well.

Unlike the Chinese state pension, UK, American, Canadian and European state pensions do not any govt funding involved.
The Chinese govt will fund its state pension layout if there are not enough funds in the state pooling system, such as in some declining areas to fund the state pension payouts.

For Chinese pensions to be exempt from Section 70 is racist treatment of immigrants and Kiwis who have also paid into overseas govt social insurance superannuation schemes and who yet loose these pensions to Section 70.

By X. Y. Zhang, Institute for Fiscal Research, Ministry of Finance, Beijing

The indisputable proof in PDF form here: In Word form here.

In 2004 in the Auckland High Court before Judge Dooge, a Mr. Sant Raj Rai a Fijian immigrant to New Zealand and defended by the Social Security Appeal Authority was challenged by the MSD in order the MSD could snatch his Fijian govt pension granted for being a civil servant.
The MSD lost but also a land mark ruling was made by the judge that the Fijian National Provident Fund pension, a fund similar to the UK National Insurance Fund was deemed not subject to Section 70 because although administered by the Fijian govt the pension was not on behalf, funded, by the govt but on behalf of employer/employee social insurance contributors.
The MSD in a panic that this redefinition of similar funded overseas govt pensions could set a precedent.

In an addendum to the case, the MSD tried to get the three clauses in the judgment struck out, the judge refused and even went further to deny the MSD an appeal.

It just goes to show how the MSD's own reviews concluded that the legislation is ad hoc, outdated and out of step with other countries social security systems.