Helen Clark thinks the Government should review commitment to AUKUS

Written By: - Date published: 8:23 am, August 7th, 2023 - 44 comments
Categories: chris hipkins, helen clark, International, military, war - Tags:

Last week the Government released a document titled the Defence Policy Strategy Statement.

According to Prime Minister Chris Hipkins:

In recent years our country has experienced terrorist attacks, growing disinformation, and cyber-attacks on critical national infrastructure.

The domestic and international security environment has changed and our preparedness needs to change too – to be clear-eyed on risks and to put in place the right capabilities to be effective.

The earlier we act, the more secure New Zealand will be for our children and grandchildren.

As we scan the international horizon, we need to keep our eyes wide open to the emerging issues and threats to New Zealand and our interests.

These emerging threats do not require an entirely new foreign policy response. Our independent position, coupled with targeted investments and strengthened ties with partners and allies puts us in a strong position to face the future.

These plans represent an important step in how we are protecting our national security and advancing our national interests in a more contested and more difficult world”.

Former Prime Minster Helen Clark, someone I have the utmost respect for, does not see it this way:

Stuff reports her comments in these terms:

Former Prime Minister Helen Clark fears defence and security strategy documents released by the Government on Friday suggest New Zealand is “abandoning its capacity to think for itself”.

In a thread on X – formerly Twitter – Clark said that rather than thinking for itself, this country was instead “cutting & pasting” from its partners in the Five Eyes intelligence alliance – US, UK, Australia, Canada.

“Drumbeat from officials has been consistent on this for some time,” Clark said in the post.

”Now there appears to be an orchestrated campaign on joining the so-called “Pillar 2” of #AUKUS, which is a new defence grouping in the Anglosphere with hard power based on nuclear weapons.”

I am with Aunty Helen on this.

This is not a new debate.  Back in the 1980s David Lange and the fourth Labour Government decided that Aotearoa New Zealand would not countenance the reliance on nuclear weapons and declared Aotearoa New Zealand nuclear weapons free.  In the Oxford debate on the issue, possibly the highlight of his career, he not only commented on smelling uranium on the breath of his opponent but he said this:

New Zealanders are being told they cannot decide how to defend New Zealand. … To compel an ally to accept nuclear weapons, against the wishes of that ally, is to take the moral position of totalitarianism, which allows for no self-determination. And it is exactly the end we are supposed to be fighting against.

The strategy itself is full of words, so many words, but some of them are significant.  Like these:

This defence policy reinforces New Zealand’s long-standing commitment to collective security, with Australia and
our other Five Eyes partners”.

And these:

To be effective in achieving these outcomes, our contributions must be operationally credible, valued by partners, and demonstrate New Zealand’s willingness to work and share risks alongside others.

And these:

New Zealand’s relationships with Australia, the United States, United Kingdom, and Canada are part of the overall Five Eyes partnership, a critical grouping of countries that share fundamental values and interests. Defence derives enormous benefit from this partnership, including access to intelligence and defence capabilities, information technologies and military developments that would otherwise be unachievable. It is in New Zealand’s interest to contribute to the effectiveness of this partnership.

Not to forget these:

AUKUS Pillar Two may present an opportunity for New Zealand to cooperate with close security partners on emerging technologies.

The footnote to this comment says:

AUKUS Pillar Two encompasses developing advanced technologies to support defence and security capabilities.

I presume they are referring at least in part to Australia’s planned purchase of three US nuclear submarines over the next few decades.

It is not clear however.  The only time the word “nuclear” is mentioned in the report is to refer to North Korea’s potential nuclear arsenal.

Professor Robert Patman, who researches into international relations and global security, has this comment to make about the strategy:

On the one hand, advocates argue that New Zealand risks being strategically marginalised if it does not join Pillar 2. They claim a new Cold War is underway between the US and China, and in this context New Zealand must choose a side to align with.

Given longstanding political and security ties with Australia, the UK and the US, it is claimed it makes sense for New Zealand to align itself with them, and that joining Pillar 2 would ensure access to the advanced defence technologies used by Aukus without jeopardising New Zealand’s non-nuclear security policy.

On the other hand, the sceptics reject the Cold War analogy as fundamentally inaccurate and, in particular, take issue with the binary assumption that US-China rivalry will determine the Indo-Pacific region’s future.

China’s global ambitions are real, but they should not be over-hyped.

China remains economically dependent on key Western markets such as the US and EU, and its one-party state is a deeply unattractive political model for many other states to follow.

Moreover, New Zealand’s participation in Pillar 2 would raise very real uncertainties amongst Asean and Pacific Island states about its independent foreign policy and the credibility of Wellington’s non-nuclear security commitment in a region where Aukus has already been criticised for fuelling nuclear proliferation.

Besides, Aukus does not have a monopoly over new defence technologies, and New Zealand has other options here, bilaterally with Australia or the US, or multilaterally with Nato.

Given the importance of our anti nuclear legislation and the overwhelming support that it enjoys I would hope that the report would address what effects it would have on our anti nuclear legislation.  Does the strategy mean that we continue it or do we have to forgo it?

And why do we need to sign up to this agreement which essentially appears to require us to get ready for war with China?

My preference is that we retain our independence.  We should be very careful before signing pacts with states armed with nuclear weapons or nuclear capable submarines getting ready for war with our major trading partner.

David Lange was correct when he talked about the absurdity of the status quo and the ANZUS treaty and the importance of deciding things for ourselves.  Pillar 2 feels like the latest version of a cold war arrangement that had preparation for combat as its primary driver.

Watch this if you want to feel the force of his argument and maybe shed a tear.

44 comments on “Helen Clark thinks the Government should review commitment to AUKUS ”

  • Comments are now closed

  1. SPC 1
    7 August 2023 at 9:35 am

    We were lucky Clark preserved our reputation by keeping us out of Iraq – we could do this and maintain relationships because of our Afghanistan work.

    I do not have a problem with AUKUS Pillar 2 – it will help us with our own tech development and also enable access to it from others. It is entirely separate from AUKUS 1 (nuclear powered sub tech to Oz). And so is not inconsistent with our own non nuclear policy and aspiration to keep the South Pacific out of super power rivalry.

    The same nuance she showed is here in supporting the QUAD in defence of sea lanes (but not in defence of Taiwan remaining outside of China).

    We adhere to a multi-lateral, international law based position – thus have reasonable concerns about South China Sea atolls becoming militarised island bases (in breach of China's earlier word). This is an important matter, if there is to be the trust the Belt and Road programme requires.

    In this case, it is not in remaining at arms length from our security partners that we do any good but in instead it is in looking for a diplomatic path out of conflict (imagine if we had managed to prevent the Americans going into Iraq, rather than just being apart from the error).

    Failing preventing a military conflict over Taiwan, our focus should be on keeping as much of the South Pacific out of this as we can (and otherwise noting to China we would be neutral until China attacked Australian territory and would co-operate with them in their defence, but without any participation in an offensive action on Chinese territory).

    Note – Oz nuke subs are not likely to get nuclear weapons, their purpose is to enable a capacity to sustain periods at sea to the north.

    • Anne 1.1
      7 August 2023 at 10:24 am

      I have huge respect and admiration for Helen Clark but I don't think her comparisons with our past relationship problems during the Cold War era and the current situation are any longer appropriate. Two different scenarions at two different times.

      Having listened closely to Andrew Little in recent days, it seems to me his views align very much with yours SPC. For instance, he has made it abundantly clear that our anti nuclear stance is not up for renegotiation including nuclear propelled vessels.

      Must go now……

      • Patricia Bremner 1.1.1
        7 August 2023 at 11:25 am

        Andrew Little has been a stalwart of negotiation. He is solid. I agree Anne and SPC.

  2. newsense 2
    7 August 2023 at 11:18 am

    Keating was enormously critical of the deal that got Aussie in, saying that it didn’t make anyone safer, but transferred a lot of money from Australia to Britain and the US for technology that didn’t do the job they claimed it would.

    Paul Keating ABC interview at length on YouTube.
  3. Blazer 3
    7 August 2023 at 11:47 am

    Clark is right.Unfortunately when it comes to the U.S geopolitics ,NZ will be a loyal ally ,sometimes needing a little arm twisting.

    I recall John Kerry ,former U.S Sec of State saying…'when it comes to Noo Zealand,we don't even have to…ask.

    Neutrality is the right position imo,but the main parties will not entertain it.

    A war with China is an alarming prospect.

    Recent ,frank Phillipines President Duterte….'

    If Washington wants the Philippines to fight China, the US military should come and fire the first shot, President Rodrigo Duterte argued, accusing the US of using its allies as “bait” for Beijing.

    “There is always America pushing us, egging us … making me the bait. What do you think Filipinos are, earthworms?”

    ‘Want trouble? You first!’ Philippines’ Duterte dares US to bring its fleet & declare war on China — RT World News

    The U.S is currently building new bases in the Phillipines.

    • LawfulN 3.1
      7 August 2023 at 12:56 pm

      One of the reasons they don't have to ask is that the United States did the bulk of the work to prevent Australia and New Zealand being overrun by the Japanese Empire. Ask any Korean what that's like.

      We don't do stupid **** like Iraq, but if they really need help, we should give it.

  4. Ad 4
    7 August 2023 at 11:51 am

    Helen Clark is the leader that led us to our exceptionally high reliance on China. That was back in the day that a rising Chinese middle class would inevitably demand greater rights and head towards a more liberal state if not a liberal democracy.

    Well that view of China is dead.

    But our view of ourselves is constant:

    We are one of the most sea-export reliant countries in the world and this will never change. That is how we have operated for the last 200 years now, and it is how we will stay.

    Our defence arrangements should simply reflect our underlying reliance on multilateral alliances in trade.

    Alignment of our trade interests with our defence interests is the seamless logic that requires constant security of international sea lanes. We will never have a military that achieves that without massive help from Australia, India and Japan, together with the US. They are better known as AUKUS.

    I'm hoping that China will never attack Taiwan and destroy our maritime export security. Unfortunately hope will not advance an export-led economic recovery from the mess we are in. So we need a military prepared to join and fight others to defend sea lanes that enable export markets, hence, from Minister Little:

    “Where possible, defence will seek to act to constrain hostile actions, will be prepared to employ military force, and engage in combat if required,”

    https://www.rnz.co.nz/news/political/495115/changing-global-tensions-prompt-new-zealand-to-ramp-up-security-and-defence-resources

    Prepared to fight is what NZDF should define itself on the tin.

    Little recently told his audience that "we do not live in a benign strategic environment" and that we are not protected by our remoteness.

    We've seen what laziness and complacency in domestic security leads to. We need allies to help us improve. Our digital defences in particular are never going to be supplied from domestic vendors, and always need to be interoparable with our allies.

    AUKUS Pillar 2 is an appropriate alliance for our scale and needs.

    Thank God we have countries that want to be our allies.

    • Blazer 4.1
      7 August 2023 at 12:05 pm

      'Thank God we have countries that want to be our allies.'

      We have countries that want us to align with their interests.That is a big pool.

      Maintaining a status quo of economic imperialism is the aim of Western alliances.

    • DS 4.2
      8 August 2023 at 1:20 am

      Our economic interests are now so heavily integrated with China, appealing to us being a trade-based economy doesn't imply what you think it implies – in fact, it means the opposite.

      Neither India nor the USA are inclined to give us a Free Trade Agreement on Dairy. China has. Ergo, we shouldn't take part in Washington's little games, and we shouldn't upset any diplomatic apple-carts with Beijing, regardless of what we think of their domestic policies.

      • Ad 4.2.1
        8 August 2023 at 9:03 am

        We trade with countries whether we have a free trade agreement with them or not. It's just slightly more complex.

        FTA's are a red herring.

        • DS 4.2.1.1
          8 August 2023 at 11:07 am

          We have substantially more trade with China than the USA. Our trade interests are "we export to them and import from them", without interference from the USA.

          (In fact, as of 2022, we export more to China than the USA and Australia combined. If you can't see how AUKUS is a threat to our trading interests, you are not paying attention).

          • Ad 4.2.1.1.1
            8 August 2023 at 11:59 am

            In a circumstance where China invades Taiwan, only AUKUS will protect international trade interests including our own. There are already multiple military incursions into Taiwanese airspace during PLA war practices.

            China has consistently reaffirmed the will to use military force to regain Taiwan.

            In circumstances where conflict breaks out between China, and Vietnam or Malaysia or the Philippines, the same AUKUS will be called upon to protect those international trade interests including our own. Vietnam and Malaysia have had the most aggressive tussles with China to date in the last 2 years.

            Everyone prefers diplomacy, and everyone prefers keeping the business of trade alive, but you also have to plan for when diplomacy fails and armed conflict starts. And it's reasonable to plan for that now.

            • DS 4.2.1.1.1.1
              8 August 2023 at 3:14 pm

              AUKUS doesn't protect international trade interests. It protects American interests, and American interests only.

              And those aren't New Zealand's interests. New Zealand's interests are sending milk powder to China, importing consumer goods in return, and keeping our mouths shut. We gain absolutely nothing from piling onto the AUKUS idiocy, and given Washington's refusal to give us Free Trade, that's Washington's own damned fault.

    • KJT 4.3
      8 August 2023 at 7:28 am

      So. You think we should "defend the sea lanes" against China, to protect trade with China?

      Can't anyone see the stupidity?

      • Ad 4.3.1
        8 August 2023 at 9:02 am

        The same sea lanes are required for our trade with Japan, Korea, Vietnam, Taiwan, Indonesia, Malaysia, Singapore, and Melanesia.

        So, no, it's not stupid to defend sea lanes.

        • DS 4.3.1.1
          8 August 2023 at 11:14 am

          New Zealand exports more to China than all your listed countries combined.

          It is profoundly stupid to alienate our major trading partner because Washington says so.

          • Ad 4.3.1.1.1
            8 August 2023 at 11:53 am

            In a circumstance where China invades Taiwan which China has been announcing clearly it will do for many years, we would want to be able to export to those other countries.

            So we would need to be part of a defence capability to ensure shipping lanes in t hat circumstance because it would be even more an economic pipeline than it already is.

            • DS 4.3.1.1.1.1
              8 August 2023 at 3:17 pm

              We'd want to be able to export to China too. You know, seeing as they earn us more cash than all your other little countries combined.

        • KJT 4.3.1.2
          9 August 2023 at 8:15 am

          Who is a threat to the "rules based order" again?

          The USA, as usual, ignores the rules whenever it suits them, especially those about "freedom of Navigation".

          https://theconversation.com/why-pushing-for-an-economic-alliance-with-the-us-to-counter-chinese-coercion-would-be-a-mistake-167629 Lacking the sheer power of the US or China, Australia relies on global adherence to WTO rules to protect its trade interests. But the US actions mean the rules can no longer be enforced.

          Far from "enforcing the rules based order" the USA is the chief culprit in ignoring them.

          It is profoundly stupid to alienate our major trading partner because Washington says so. DS. 4.3.1.1.

          Yes.

          I deplore our dependence on importing manufactured junk from China, as well as associating ourselves with the USA's unprincipled militarism. Neither are moral or principled actors on the world stage. But, here we are.

          As someone else said "when elephants dance, best to just keep out from underfoot".

          • SPC 4.3.1.2.1
            12 August 2023 at 1:23 pm

            The WTO Appellate Body is still not operating in 2023 (not since late 2020 has it been able to operate).

            Because the USA is able to veto new appointments, it wants to use that to determine the way the Appellate Body functions before it is allowed to resume.

            Perhaps other nations should determine on there being an alternative, two appellate bodies, one for trade between other nations and another for trade between the USA and the rest of the world.

            The idea that the USA can use world organisations to control how the rest of the world operates is absurd, surely the idea of a separate regime just for them should be enough. After all most of the world abides by the ICC, only those nations who cannot avoid being an international criminal separate out from its orbit.

      • Sanctuary 4.3.2
        8 August 2023 at 10:07 am

        China – and Russia for that matter – directly challenge the convention of freedom of navigation beyond territorial waters. If nations are allowed to claim sovereign rights over the high seas we are screwed.

        • KJT 4.3.2.1
          12 August 2023 at 12:16 pm

          Bit behind the times there.

          Nations already claim "Sovereign rights" over the oceans. NZ's 200 mile zone for one.

          The "right of innocent passage" for shipping, has been abrogated many times. Since 1945, most often by the USA.

          • SPC 4.3.2.1.1
            12 August 2023 at 1:26 pm

            There is a difference between a territorial limit (only 12 nautical miles) for innocent passage and economic zones.

    • Sanctuary 4.4
      8 August 2023 at 10:04 am

      "…Prepared to fight is what NZDF should define itself on the tin…"

      The Navy fired it's first missile in ten years the other day. Let that sink in. At a time when the war in the Ukraine is demonstrating the need to sling dozens of missiles and fire thousands of automatic cannon rounds a day to defend their cities, we can test fire one missile every decade. They probably haven't even fired the gun for a while either.

      https://www.navalnews.com/naval-news/2023/07/new-zealand-frigate-arrives-in-australia-for-rare-missile-firing/

      The run down state of our military to do anything at all in relation to their primary mission is beyond a farce. Our army is supported by 24 105mm guns, feeble short ranged pop guns that in any modern war would be annihilated by 155mm guns and/or drones. We have no anti-aircraft missiles and a handful of anti-tank missiles.

      Helken Clark has that boomer reluctance, born from formative anti-Americanism rooted in their generational cause célèbre of opposition to the Vietnam war and (as it turned out) performative student Marxism of the 1968 protests, to embrace the idea of collective security. But without it we are sunk. The world is changing. The "frontline" is no longer in far off, remote West Germany. It is in the Pacific, and a lot closer to us.

      • newsense 4.4.1
        8 August 2023 at 3:54 pm

        Very, very good friends is still a position with a small amount of leverage.
        They say jump and we say how high isn’t…

    • newsense 4.5
      8 August 2023 at 3:50 pm

      India and Japan are in AUKUS?

      News to me.

      Despite (or perhaps because of) our commonwealth relationship we apparently have poor trade and diplomacy with India. When did we become so close that they’re signed up to guarantee our security?

      Japan has very belatedly become interested in further South, but not much. Not much apart from being cute that NZ realistically offers in return.

      • SPC 4.5.1
        8 August 2023 at 5:43 pm

        The 4 (India Japan Oz and USA) are in the QUAD-bike that Kurt Campbell built. It's a China containment exercise (freedom of the seas aspect).

        AUKUS refers to the UK and US assistance to Oz, so that they can have nuclear powered subs that operate for a long time at sea to their north.

        AUKUS Pillar 2 refers to tech co-operation.

  5. Corey 5
    7 August 2023 at 12:09 pm

    I'm in two minds about it.

    If the UK, USA and Australia want to increase their influence and decrease China's influence over the Pacific, instead of blowing shit up, they could start buying shit up, ie trade deals.

    Why would any sensible country obliterate their economy by shunning their largest trading partner just to be seen as one of the cool kids by the UK/USA/AU who won't offer us anything to ease the economic pain?

    If USA and the UK want to combat China, the best way to do it is economically! If the USA is willing to take all the goods China currently does off of us, then we can talk till then na fam.

    Annnd you can add the UK and EU to this, those mofos colonised this part of the world and just f'd off, come clean up your messes and start trade negotiations with Pacific nations or stfu.

    If USA/UK/au and Japan aren't prepared to fill the gaps a fallout with China will create then, then there's no discussion to be had.

    On the other hand, I'm ok with increased USA and UK naval and military spending in the Pacific

    Because NZ will never spend enough to adequately patrol and protect its gargantuan marine/sea territory.

    If an increased military presence from any country even remotely deters poaching,human trafficking, dumping, polluting and illegal fishing I'm all for it cos NZ will never ever take protection of its waters seriously.

  6. aj 6
    7 August 2023 at 1:17 pm

    Given the importance of our anti nuclear legislation and the overwhelming support that it enjoys I would hope that the report would address what effects it would have on our anti nuclear legislation. Does the strategy mean that we continue it or do we have to forgo it?

    And why do we need to sign up to this agreement which essentially appears to require us to get ready for war with China?

    My preference is that we retain our independence. We should be very careful before signing pacts with states armed with nuclear weapons or nuclear capable submarines getting ready for war with our major trading partner.

    What nuclear war looks like from space.

  7. Chris 7
    7 August 2023 at 1:47 pm

    Funny how right-wing politicians mellow in retirement.

  8. GarethNZ 8
    7 August 2023 at 9:35 pm

    China is a zombie. The main problem is deterring it from doing anything stupid as it decays.

    Their Total Fertility Rate is officially 1.28. Because accurate info out of China is difficult, it's estimated to be as low as 1.1 (2.1 is births = deaths), the lowest in the world.

    They announced at the beginning of the year that ~200,000,000 of their population didn't actually exist because of provinces inflating the numbers to secure additional funding. This is also estimated to be a lowball of the actual problem. India didn't overtake China as the most populous country this year… that happened about 10 years ago, they've just admitted it this year.

    If you look at their published numbers as a demographic pyramid, it's a disaster, worse than Japan just before their Lost Decade. Again, the real picture is probably worse. In addition to the majority of their population being 50+, they have an excess of males over females of around 10 million for every age category under 30.

    Their labour costs are increasing at the fastest pace of any country EVER, and they are not going down again because they don't have anywhere near enough young people coming into the labour force.

    In addition, net migration is negative, showing the the richer, more well educated Chinese can see the writing on the wall and are leaving.

    That's not a recipe for a superpower throwing it's weight around. That's a recipe for economic stagnation and a declining military power without enough young troops to keep everything going. At this point, the only thing that could save China is a massive immigration boom where they entice lots of young Asian neighbours, particularly women, to migrate to China. I don't see that happening.

    • Ad 8.1
      8 August 2023 at 1:08 pm

      Russia has an even greater demographic collapse than China, but felt quite happy to invade Ukraine twice: 2014 and 2022.

      You don't have a useful argument.

      • GarethNZ 8.1.1
        13 August 2023 at 9:56 pm

        Russia's demographic collapse is similar to China. Not quite as bad, but close. Their TFR is 1.5 which is slightly better than the probable estimate of 1.1 for China.

        The reason they felt happy to invade Ukraine is because
        a) if they're ever going to do it, they have to do it now. If they wait 10-15 years, they won't be able to because the armed forces will start to run short of young recruits.
        b) Putin and his cronies who run the place all want to strengthen their borders by pushing them out to the old border on the other side of Ukraine which has a nice defensible mountain range (Yes, they'd have to take Moldova as well)

        It was a case of "We should be able to roll over Ukraine because we've got a massive population and tons more equipment than they have. The west will sit and watch and wring their hands because they can't get organised and Ukraine's not part of NATO"

        As it is, that all hit the fan and now they have a slog, but they're still in a winning position, just a lot more costly. Ukraine currently has 1/3 of it's population in refugee camps, mostly women and children. Russia is kidnapping every child they can lay hands on and shipping them into the depths of Russia as well as bombing every power generation facility (except the nuclear ones) and now every grain storage area they can. With the men fighting and the women in refugee camps, your population stops reproducing, existing kids get taken and lack of power and food reduces the country to a basket case economy. Ukraine's income was 41% grain exports, the rest was mostly coal and oil. 60% of their exports went to Russia and the former Soviet countries. That's all gone. The longer this war goes on, the worse it gets and if it takes 10 years, Russia still has it's food production and population growth (such as it is) but Ukraine will be on the verge of ceasing to exist.

        The west is doing what it can, but none of them are willing to go to war with Russia and so all they can do it prolong the inevitable and hope that the increasing cost of the fight will make Putin blink.

    • SPC 8.2
      10 August 2023 at 6:45 am

      They in fact have rising youth unemployment and the largest ever group of graduates coming onto the labour market.

      Their current problems are a downturn in international trade and deflation.

      The historic ones local government debt levels and issues in the propoerty market – a major property company is in trouble atm.

      The historic over-estimate of population (population based funding system) did not impact on their growth (and unless we know the demographic of this over-estimate, we cannot accurately assess the aging of their population).

      https://www.bbc.com/news/business-66435870

      • GarethNZ 8.2.1
        13 August 2023 at 9:31 pm

        We do know the demographic of the over-estimate. It was all in the under-30 age groups. You can look at the demographic maps before and after their admission to see the difference. Not too surprising since it was a result of provinces over-inflating the numbers to obtain additional state funding by reporting higher birth numbers than were actually the case.

        The rising youth unemployment is also underestimated. Officially it's 21% but a professor at Peking University estimated it may be as high as 46.5% for 16-24 yr olds. It doesn't get reported because China only counts people "actively seeking work" which leaves out the estimated 16 million "lying flat", and also there's incentive to lie because any college and university courses where the employment rate of graduates is less than 60% get cancelled and their funding pulled.

        The total unemployment rate is officially 5.2%, so the majority of the jobs are taken by older people. There's no job growth among businesses in China which means less entry level jobs. China's growth has been mainly investment-led, but they're running out of dams, roads and power plants to build. The property market is a visible sign of this. So where does their economic growth come from if investment is off the table?

        People aren't spending in China after coming out of lock-down. Instead they're saving, having lost confidence. That means shops cut prices, people see prices dropping and put off buying until they drop further, businesses start cutting production and jobs (starting with entry-level, lower value jobs). People without jobs have less money and so spend less and now you have a spiral.

        The central bank could cut interest rates or spend up to counter this, but due to trade issues the currency is already weak and debt is high from COVID spending. In the past they've spent large on infrastructure, but as I mentioned that doesn't seem to be much of an option anymore, the returns on new infrastructure have diminished to almost nil. Instead they've been trying essentially ad campaigns to get people to spend more. We'll see how that goes.

        • SPC 8.2.1.1
          14 August 2023 at 5:00 am

          In the short to medium term they have enough people for the military – evidence the youth unemployment (male surplus).

          In the medium term this unemployment will be eliminated by openings from retirement of older workers (a growing non productive cost).

          The rise in labour cost of recent times will diminish because of the decline in China's world trade position (loss of custom to lower cost rivals and being frozen out of western tech connections).

          Yes their (real) growth rates of the future will be lower (but the investment costs will also decline, transfer to old age support and focus on improving living standards of the working population – aided by deflation/lower property value) and GDP per capita will continue to increase (with real population figures at least).

          The imponderable will be the degree to which they utilise their education to improve productivity and realise technology competitiveness (and or steal stuff) from AI to robots in production. They have a better option working with Japan and resolving the impasse with the West (One Belt and Road within the global market system) than an as a partner to an anti-social Russia (and OBAR as a separatist hegemon).

        • SPC 8.2.1.2
          14 August 2023 at 5:34 am

          China's currency is weaker because the West is raising its interest rates (many nations have COVID debts) to mange its inflation (China does not have this atm – they have deflation).

          Their domestic spending is lower because older workers are saving for their retirement and more young have no jobs (trade decline as the world global supply chain divides in half) – and those with property ownership are not seeing rising wealth – deflation.

          Instead they've been trying essentially ad campaigns to get people to spend more. We'll see how that goes.

          Pre COVID this came from rising wages and from some their rising property value wealth. Sustaining rising wages, while losing world trade (exclusion from some supply chains, western market consumers facing rising costs) might involve a direction of greater economic proceeds to labour and promoting constraint on hours of work to enable more time for leisure (grow the domestic services sector).

The server will be getting hardware changes this evening starting at 10pm NZDT.
The site will be off line for some hours.