New Zealand may have the carrot, but the stick will come

The past two years have seen the tide turn on global attitudes towards China. First, China began a period of rapid de-democratisation in Hong Kong, brutally suppressing protests and flagrantly ignoring the Sino-British declaration that guaranteed Hong Kong’s freedoms until 2049. Then in 2020, China failed to contain the Covid-19 outbreak or take responsibility for it. Even before these two major flashpoints, it was becoming increasingly clear China had little intention of following the prevailing rules of the international order.

In response to many of these incidents, free and open countries have robustly stood up for their values and condemned Chinese actions. When Hong Kong introduced its draconian security law allowing Chinese authorities to extradite Hong Kongers for a wide range of dubious offences, such as secession and subversion, Britain, Canada, Australia and others were quick to act, offering asylum to fleeing Hong Kongers. There was, however, one notable exception from the pack: New Zealand.

Unlike its friends and allies, New Zealand has been conspicuously reluctant to involve itself in multilateral actions aimed at China. In the first instance last May, it did not join the rest of the CANZUK group in responding to the then-proposed law. Even more recently, it dropped out of a strongly-worded joint statement from its ‘Five Eyes’ partners to instead issue its own, much weaker, statement. And as James Forsyth points out, New Zealand was also absent from another statement noting concern over obstructions to the World Health Organisation’s Covid-19 fact-finding mission in China.

The most obvious conclusion to come to is that given New Zealand’s significant trade dependency on China (24% of New Zealand’s exports go to China) Wellington is reluctant to risk a backlash. Australia became subject to a cascade of tariffs from China after it pushed for an independent investigation into Covid-19’s origins. Beijing imposed tariffs on wine of 200%, on barley of 80% and cotton of 40%. Several other exports were more or less blocked entirely, such as meat, lobsters, coal and timber.

Simply put, in recent years New Zealand has accepted the bounty of the Chinese carrot, and now fears the whack of the Chinese stick, which could indeed cause serious harm to the New Zealand economy. This is precisely the approach Charles Parton identified in his recent paper.

According to the organs of the Chinese state, that carrot is worth an impressive $38 billion in tariff reductions over 12 years. But so too, by implication, is the looming stick. Potentially compounding this, Beijing attempts to position Australia as little more than a racist lapdog of the United States wherein ‘the white mainly determines [sic] their foreign policy’. In contrast, New Zealand is more pragmatic by virtue of the Maoris’ presence in politics and its record of proudly maintaining an independent foreign policy irrespective of its allies’ wishes.

Despite Kiwi hesitancy to take on China, and Beijing’s attempts to cast New Zealand’s traditional allies as being but self-interested actors, Wellington needs to wake up to the perilous situation it finds itself in and work to wean itself off of dependency on China. Traditional partners – such as the United Kingdom – should convince New Zealand that the time has come to diversify its export partners, while helping to insulate the country against possible Chinese repercussions in the future.

Jeremy Hutton is Communications Manager at the Council on Geostrategy.

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