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New Zealand and Australia and China (PCR)

Updated: Mar 2, 2021

By Terence O'Brien

China is number one trade partner for both New Zealand and Australia. The extent of dependence differs - for Australia 32% of exports are to China (19% imports); for New Zealand comparable figures are 23% of exports (16% imports). For key trades the degree of New Zealand export dependence on China is appreciable - forestry (60%), meat (40%) and dairy (30%). Good prices for those exports, alongside competitive prices for Chinese consumer goods imports, materially boost New Zealand terms of trade.

Australia’s political approach to China derives from its ‘middle level power’ ambition and the absolute primacy attached to its US military alliance. As an important supplier of key industrial raw materials to China (iron ore, coal etc.), Australia considers it can nevertheless remain in lockstep with the US, which brands China as a geopolitical threat. The Trump Administration is explicitly committed to halting PRC’s advance - politically, economically, commercially and technologically in order to preserve American global supremacy in an age of ‘catch up’, by China. Australian-PRC relations are presently strained by PM Morrison’s expressions of hostility.

New Zealand’s political approach is conditioned by total absence of ‘hard power’. It operates internationally, to an appreciable degree, beneath the radar screens of the powerful and is not a formal US military ally. New Zealand’s ‘soft power' - what the country is and seeks to be - represents its asset in international affairs, even as the domestic challenge involved is rigorous. That ‘soft power’ is embellished by New Zealand response to COVID 19, and to the Christchurch mosque killings.

The logic behind New Zealand’s ‘soft power’ is evenhandedness in international dealings. New Zealand discounts megaphone diplomacy and the Prime Minister has herself, thus far, avoided joining the US orchestrated drumbeat of China threat, that bears many hallmarks of psychological warfare. The Foreign Minister is less reticent. But the essential distinction between the predispositions of the two trans-Tasman leaders will have not have been unnoticed in China.

A traditionally delicate choice for New Zealand (and democracies everywhere) lies between interests driven and values driven foreign policy. It is incontrovertible that Chinese authoritarianism under Xi Ping grows more oppressive (Uighers, Hongkong etc.), but does not extend to war mongering. Its South China Sea policy involves an essentially defensive reaction to rebut US forward military activity but is coloured too by sovereignty disputes with neighbours.

New Zealand cannot view China through rose tinted glasses, but US actions are also forbidding; both domestically ( enduring racism, toxic politics bankrolled by special interests, deluded gun laws etc. ) and, externally, (trade war, wilful financial sanctions, covert drone and special forces combat). American disregard for international rules based order that does not privilege US interests predates Trump. Many charges now levelled by the US against China and indeed vice versa ( over intellectual property theft, intrusive spying in cyber space, employing aid money to win friends) seem to amount to ‘pots calling kettles black’. Moral equivalence is always a tricky call given the realities of international relations, but New Zealand evenhandedness requires equitable judgement.

COVID 19 has capsized everybody’s assumptions. Recovery from unsurpassed levels of unemployment, of indebtedness, plus correcting the failure of democratic capitalism to close the gaps of inequality, provide immense tasks going forward. A rational reaction to COVID should have sparked concerted international response from the outset, while demonisation of WHO, or of China, serves no overall interest whatsoever.

Ideas for ‘bubbles’ between ‘like minded’ countries on the long road to post pandemic recovery, carry connotations for broader foreign political relationships at a time when great power leadership is confounded by geopolitical hostility and domestic convulsion. A reshuffle of cards in the deck of political /economic relationships more generally is not to be discounted. But it is quite likely that Australia and New Zealand will differ still over respective responses to China. New Zealand would presumably resist any notion that an evermore consequential Australia (or anyone else) gets to decide New Zealand policy on China.

Terence O'Brien is a former New Zealand Ambassador to the United Nation (Geneva, New York), and Senior Fellow at the Centre for strategic Studies at Victoria University of Wellington.

The views expressed in this article are the author's own and do not necessarily reflect Diplosphere's stance.

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