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Threatening China

New Zealand again needs to escape the grasp of a great power.

Threatening China

Jul 1, 2021 Society

New Zealanders love to be loved. Or even just noticed. Like small-town puritans, we think we set some kind of example to the big, wide, decadent world. At best, this creates charming national myths, like New Zealand inspiring the world to grant universal franchise, the United States and the Soviet Union to end their nuclear arms race, and rugby-loving Afrikaners to negotiate with Nelson Mandela.

Some on the right think New Zealand “leadership” on trade liberalisation and free-market reform prompts the world to follow. Many on the left are emotionally attached to the same myth for climate change. It’s all nonsense, of course. No one cares much about what we do. More damagingly, this national thirst for relevance helps to explain how, over the past 30 years, we’ve got ourselves in too deep with China.

New Zealand was an enthusiastic supporter of China’s economic reforms under Deng Xiaoping and Jiang Zemin, as if either of them knew. We were a passionate foundation member of the Asia-Pacific Economic Co-operation (Apec) network, which bound all its members, including China and the US, to free trade and open investment across the Asia-Pacific by 2020 — now come and gone. We thought China’s economic liberalisation process was irreversible and would inevitably be followed by political reform. We were wrong on both.

Most flatteringly, in the late 1990s, China started to pay us special attention as its best little friend in the West. It chose us to be the first country with which to conclude bilateral negotiations on its accession to the World Trade Organisation (WTO), the first to formally recognise it as a market economy, the fi rst developed country with which to begin negotiations for a free-trade agreement, and the first developed country with which to complete such a deal. These developments even got a cute Maoist moniker: “the Four Firsts”.

Jenny Shipley and Helen Clark weren’t wrong to do the Four Firsts. They judged correctly that if a small country like New Zealand wasn’t at the front of the queue, we’d be at the back. China could practise doing trade deals with a developed economy while we wrote in provisions that we’d get whatever Beijing later agreed with anyone else. But we’ve still been naive.

New Zealand’s longest-standing foreign policy goal is to keep great powers out of our region, or at least align with the least dangerous. It’s why the United Tribes of New Zealand chose the British over the French or Americans in the 1830s. We opposed Japan’s ambitions for our region in the 1940s, although we left most of that fighting to the Americans and Australians while we were busy in North Africa and Europe. We and Australia then aligned with the US. We pushed for the British and French to offer their Pacific colonies independence and for everyone to stop testing nuclear weapons in our neighbourhood. We decided we didn’t want nuclear-armed or nuclear-powered warships in our waters.

On trade policy, New Zealand’s number-one goal since the Second World War has been to avoid dependence by diversifying our markets. It became even more urgent when the UK joined the forerunner to the European Union in 1973. From 1880 to 1950, 80% of our exports went to the UK. By 1964, it was still over 50%, with Australia still taking just 4%, Japan 5%, the rest of Asia 0.7% and even the US less than 15%. Over the following 30 years, New Zealand exporters did a magnificent job, including with the help of marketing campaigns in Japan and elsewhere and aft er the Closer Economic Relations deal with Australia in 1983. By 1994, our trade profile was looking beautifully balanced, with Australia taking 21% of exports, Europe and the former Soviet bloc nations 17%, Japan 15%, the rest of Asia 20% and the US and Canada 13%.

Since then, we’ve put ourselves on a path to become as dependent on China as we ever were on the UK. Already, China takes 30% of our exports, more than double Australia in second place. On current trends, it will soon pass 50%. With the exception of Australians, who tend to visit family and don’t spend much on average, China is already New Zealand’s biggest source of tourists. It dominates the international education market.

That might be tolerable, except for China massively expanding its military capability and geo-political footprint, including in the South Pacific, from which we have not quite finished getting rid of the French and British.

There are fears China has infiltrated our political parties and Parliament. Some of our business groups appear compromised. Meanwhile, New Zealanders strongly disapprove of China’s conduct in its Tibet and Xinjiang “autonomous regions” and its Hong Kong “special administrative region”. We worry it thinks Taiwan wants to be forcibly reunited with the motherland. We think our leaders should be able to say so.

Yet when Prime Minister Jacinda Ardern, Foreign Minister Nanaia Mahuta or Parliament have expressed New Zealand’s views, China has issued threats. Its official spokesman has warned us to “be careful not to get poked in the eye”. He says New Zealand should “carry forward the spirit of ‘striving to be the first’, … rise above external distractions, and jointly advance the China-New Zealand comprehensive strategic partnership”. New Zealand’s commenting on Xinjiang, he says, “grossly interferes in China’s internal affairs and runs counter to international law and basic norms governing international relations”.

These are very strong words in international diplomacy, but certainly deliberate. The message is unmistakable that, if we don’t toe the line, fewer Chinese tourists will be allowed to visit here when our border reopens, and our dairy products, meat, wood, fruit and fi sh will start having trouble getting into China.

It has been a financially rewarding quarter-century as China’s best little friend, but our businesspeople and too many of our diplomats have forgotten that all great powers seek global hegemony. To Beijing, no less than Washington and London before it, we’re just a tiny pawn in a much bigger game. The path we’re on won’t end well for us. We need to carefully back up the truck.

Just as their predecessors had to do when the geopolitical landscape changed, Ardern and Mahuta have already asked exporters and tourism operators to redouble their efforts to diversify. It won’t be easy. But we have no choice, lest New Zealand becomes something akin to a colony once again.

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