A Chinese man has confessed in court to killing a New Zealand taxi driver in a case that breaks new legal ground for the two countries.

Xiao Zhen was put on trial Tuesday in Shanghai for the stabbing death of Hiren Mohini in Auckland in January 2010. During the hearing, the 24-year-old Xiao admitted to killing Mohini after the two men got into an argument.

Xiao left New Zealand a few days after the attack, but was apprehended in Shanghai in June of this year.

This is the first time anyone accused of murder in New Zealand has been tried in another country. Wellington and Beijing do not have an extradition treaty.

Xiao's family told reporters after Tuesday's hearing they have written a letter of apology to Mohini's family

The only New Zealanders who attended Xiao's trial were the police officer in charge of the investigation and a colleague fluent in Mandarin.

New Zealand's government has received assurances from China that Xiao will not be executed if he is found guilty.