Jacinda Ardern maintained the Government’s cautious approach on China at an annual summit, but her two predecessors were less equivocal.

The theme of this year’s China Business Summit, ‘The New China Paradigm’, was a reflection of the dramatic events of the last year both in the country and the wider world as a result of the Covid-19 pandemic.

But while many things have changed, particularly for Kiwi exporters contending with closed borders and restricted freight networks, others remain the same – including Jacinda Ardern’s delicate approach to the issue of US-China tensions and their ramifications for New Zealand.

In her speech to the annual event, Ardern (unsurprisingly) hewed closely to the tone taken by Foreign Affairs Minister Nanaia Mahuta in her own China speech last month.

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While there were issues “on which China and New Zealand do not, cannot, and will not agree”, those differences “need not derail our relationship – it is simply a reality”.

But Ardern’s admission that those differences were “becoming harder to reconcile” seemed telling, as did a subsequent line: “Managing the relationship is not always going to be easy and there can be no guarantees.”

No guarantees of what? That was not entirely clear, although it could conceivably be read as an allusion to the fact New Zealand could yet be forced to weather a trade and diplomatic backlash similar to that which has befallen Australia.

While Ardern walked the predictable tightrope between promoting the relationship and acknowledging Western partners’ concerns about some of China’s actions, two of her predecessors were less equivocal.

Jacinda Ardern stuck to the cautious approach on China taken by her government so far this term. Photo: Sam Sachdeva.

John Key and Helen Clark joined forces earlier this year in a kiwi conservation drive, and the pair likewise seem of a similar mind when it comes to engagement with China.

Key said strong ties with China had been a critical part of his administration’s foreign policy, arguing strong trade had helped New Zealand to see off the worst of the global financial crisis.

He blamed a hardening of global attitudes towards China on former US president Donald Trump, saying: “He wanted to have a particular bogeyman he could hold up as things that were wrong and why his voters in the flyover states’ life wasn’t as good.”

Human rights issues were “around in my day, they’ll continue to be around in the future” – but that did not mean they had to overtake the economic benefits of the relationship, Key said. 

John Key appeared to take a mercantilist worldview in promoting continued engagement with China. Photo: Sam Sachdeva.

“The bottom line is there’s still 600 million people living in China with very low incomes, and they’re urbanising, industrialising and getting wealthier and they want to buy what New Zealand produces…

“There are literally tens of thousands of New Zealanders, whose jobs, businesses, and livelihoods, rely on the fact that China is our number one trading partner. I for one would not throw that away simply because some people around the world are taking a slightly different perspective.”

It is a mercantilist view that was shared by a number of other countries during Key’s time in power, but one that has become less popular as China has moved away from ‘hiding and biding’ to a more aggressive stance on the world stage.

Clark’s position may be informed by different beliefs than Key’s, but she nonetheless echoed him in saying that New Zealand had to engage with China despite differences in political systems and values, “both in its own interests and in the interests of encouraging global dialogue and interaction”.

“We have a lot of things to discuss with China, a lot of things to engage on – we need to be able to raise the other [human rights] issues, but we don’t need that to be the roadblock that stops us even talking about anything else.”

“We share one planet, many challenges, and it will take the widest possible range of countries working together to find solutions, whether that is to end the pandemic, or to fight climate change.”

During her time leading the country, Clark crossed swords with the US over the invasion of Iraq, and a similar sense of independence emanated from her argument that “our country isn’t anybody’s footstool”.

“Uninformed and highly slanted commentary aired in sections of the United Kingdom and Australian press” that New Zealand was turning its back on its allies was “a slur and should be denounced as such”, she said, echoing Nanaia Mahuta’s criticism of the expanding reach of Five Eyes.

“When I was prime minister, its existence was actually never openly admitted: it was an under-the-radar intelligence-sharing cooperative, frankly, that is where it should have stayed.

“It is a huge leap to go from that to an expectation of coordination of policy positions across the five countries – that would amount to a significant infringement of New Zealand’s sovereignty and therefore limitation on our independence.”

New Zealand needed the self-confidence to stand its ground and not get pulled into the Great Power jousting, with Clark harking back to the anti-nuclear tensions with the US as an example of how a middle ground could be found.

“Eventually after I’d been in government for six years we had approaches that said, ‘Maybe there’s different ways of dealing with it’ and the metaphor we came up with was, yes it’s a significant and ongoing difference of opinion, but every time you get the car on the road to travel in the direction of dialogue with the United States, that doesn’t need to be the road bump that you run into first…

“I take the same view of China: we have a lot of things to discuss with China, a lot of things to engage on – we need to be able to raise the other issues, but we don’t need that to be the roadblock that stops us even talking about anything else.”

‘Yawning chasm’ between China and the West

A reminder of the less rosy view of China held by some of New Zealand’s allies came from Richard Maude, the executive director of policy for Asia Society Australia and a former senior Australian foreign affairs official.

“There’s now a very big gap, a yawning chasm in fact, between the Chinese Communist Party’s brand of Leninism and Western liberalism,” Maude told the audience.

“And if it ever was, it’s no longer possible for democratic countries to isolate concerns about China’s hardening authoritarianism and human rights abuses from other aspects of their engagement with China.”

The post-Cold War order of near-unrivalled American dominance and a rules-based system reflective of US power – a “pretty good era” for countries like Australia and New Zealand – had not disappeared entirely but was fading fast.

“Whether we like it or not, our region in the future will be shaped more by Chinese power and interests…

“This contest of power, this clash of interests and values can be and should be managed as best we can, but it won’t go away any time soon. This is an era, not a passing moment.” 

While some in the Biden administration appeared hopeful of a competitive US-China relationship which still allowed for cooperation on global issues of mutual concern such as climate change, Maude said that was far from a certainty – not least because of a sense in Beijing that Washington was in inexorable decline.

“Trade could come to a shuddering halt without warning, political relationships could be frozen, visits cancelled, phone calls not returned.”

There was likely to be further economic decoupling for critical technologies and materials like semiconductors and rare earths, with China convinced by four years of Trump that it could not rely on the US for access to key technologies and the Americans in turn seeing the sector as the key to their ability to compete in the long term.

While China remained “a market of great potential” and opportunity for New Zealand and Australia, Maude said businesses would need to plan for higher degrees of risk and complexity if they were not already doing so.

“Trade could come to a shuddering halt without warning, political relationships could be frozen, visits cancelled, phone calls not returned.”

That is the fear driving some of the Government’s push for greater economic diversification, with overexposure to a single country meaning potentially catastrophic consequences in the event of a major falling out.

But much of the talk from businesses at the summit was about China’s stronger than expected economic recovery from the pandemic, and the possible flow-on benefits for Kiwi businesses (although several presenters did talk about guarding against putting all their eggs in one basket).

The potential financial benefits of stronger ties with China are very real – but so too are the concerns about Xinjiang, Hong Kong and other human rights issues.

That tension between economic and political considerations was on full display at the summit, and balancing those tensions will preoccupy Ardern and her Government for some time to come.

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

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