Hipkins in China

Written By: - Date published: 8:39 am, June 27th, 2023 - 38 comments
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A weakened Russia is a Russia made more dependent on China. New Zealand is also deeply reliant on China.

I suspect Prime Minister Hipkins is at the realist end of the spectrum of engagement with China. China’s The Global Times certainly thinks so. Its feature on Hipkins’ visit said “New Zealand’s “proactive” diplomacy and actions with respect to China set “an example for other Western countries.”

“Despite the changing international situation, China and New Zealand have continuously promoted the institutionalized construction of their bilateral relationship, laying a solid foundation of political mutual trust,” wrote Qin Sheng, a research fellow at the Chinese Academy of Social Sciences.

“Against the backdrop of increasingly fierce great power competition and escalating geopolitical risks, the stable development of China-New Zealand relations has important and exemplary significance in the international community.”

The article certainly noticed that Hipkins declined to join with US President Biden in calling Xi Jinping a dictator

He showed a basic quality that a political leader should have – knowing how to respect other countries.”

In realpolitik land, we just don’t have a choice.

We are going to have to continue to respect governments that we privately loathe. China is our largest trading partner, taking nearly 30% of our exports of goods and services. We are not as reliant on China as we once were on the United Kingdom, but it’s getting up there. We simply could not survive a trade embargo against us from China.

There is no sign that this reliance is decreasing.

Prime Minister Hipkins will meet with President Xi Jinping and Premier Li Qiang while in Beijing, and will also attend a World Economic Forum event in Tianjin. Prime Minister Albanese of Australia has an ‘in principle’ invitation but no date yet.

Leading delegations of our traders with others in the world is a basic job of being a Prime Minister, but doubly so as we seek to grind our way out of COVID and climate crises. We need to front up and deal.

The war in Ukraine is in some senses good for China: a Russia bled white by its own aggression will need China to lead Fortress Eurasia. China’s imports from Russia, mostly oil and gas, rose 49% last year to US$76.4 billion.

So we have a common path dependence.

China is the common centre of commercial gravity for both Russia and New Zealand. We both have mercantilist relationships as declining countries to a growing Chinese centre. New Zealand’s pure form of democracy is going to be increasingly an oddity in the rise of a coalition of Eurasian autocracies linked by geographic proximity to one another and geopolitical hostility to the West. And we are going to need them.

Shorn of Ardern’s idealism, Hipkins’ approach is ‘keep our heads down and stay trading’, and that is the realistic choice for us to make.

38 comments on “Hipkins in China ”

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  1. tsmithfield 1
    27 June 2023 at 9:22 am

    I don't think it is a comfortable position for us to be in being so reliant on China.

    Firstly, we are likely to be heavily impacted by any economic issues in China. And, it seems that the chickens may be coming home to roost in that respect.

    Secondly, we lack the independence to criticize human rights abuses, independence of Taiwan, and other issues that would normally be things we would make strong stands against.

    And, finally, we are very exposed should military conflict erupt due to China seeking to invade Taiwan etc.

    So, we really need to be diversifying as fast as possible. Many international companies are exiting China right now for similar reasons. The quicker we can diversify the better.

    • SPC 1.1
      27 June 2023 at 9:37 am

      Limiting trading with a nation, so as to be free to criticise them, is a form of sanctions policy.

      If there is war over Taiwan trade would be impacted, so it is right to have a plan for our exports in that eventuality and sure that would require some diversification in the here and now. And in the mean time promote a diplomatic solution to that issue.

      • tsmithfield 1.1.1
        27 June 2023 at 9:50 am

        I don't mean intentionally limiting trade. But, rather, ensuring we are actively seeking new markets rather than focussing as much effort marketing to China. So, diversifying our marketing effort so that China isn't such a high percentage of the mix.

        I think, at the moment, China is 2.5 x our next biggest trading partner which is Australia. And, as Ad points out, about 30% of total trade.

        Not only nations, but also for companies, having so many eggs in one basket increases vulnerability should something happen with the biggest customer. So, diversifying is usually a good strategic option.

        • SPC 1.1.1.1
          27 June 2023 at 9:57 am

          Sure, but in diplomacy land there needs to be care as to how one explains the policy.

          • tsmithfield 1.1.1.1.1
            27 June 2023 at 10:16 am

            I don't see this as government policy. But more akin to wise decisions for individual businesses to make.

            Similar decisions to what many Western businesses manufacturing right now. For instance, many are setting up manufacturing in countries such as India rather than further investing in China.

            I think a lot of businesses have become spooked about having all their eggs in one basket after the likes of Covid, the Ukraine invasion, and the prospect of conflict with China.

            • SPC 1.1.1.1.1.1
              27 June 2023 at 10:34 am

              There is a lot of value in preventing a GFC, pandemics and wars (Iraq, Ukraine and any new one – conflict with trading partners in general) and working together on global warming.

              • tsmithfield …
                27 June 2023 at 2:10 pm

                Yes, it would be a wonderful world if we could all work together on those sorts of issues rather than fighting needless wars.

    • Stephen D 1.2
      27 June 2023 at 5:45 pm

      I’m beginning to wonder if our business community is all that fussed about diversifying away from China.

      Labour has led delegations to Europe and the UK. Yet the growth in those markets is not growing that rapidly.

      Why?

      • Ad 1.2.1
        27 June 2023 at 6:20 pm

        Well we've had a Free Trade Agreement with China for about 20 years, and the European one only got signed this year, and the UK one only got signed this year.

        Since you asked.

  2. Dennis Frank 2
    27 June 2023 at 9:25 am

    Seems a reasonable appraisal given most folk accept neoliberalism as a perpetual norm. Is co-dependency with bad guys a good idea? Bit of a gamble, eh?

    Could work if they are only bad guys part of the time & do a nimble switch to being good guys the other part of the time. This is the two-hat theory of geopolitics – in contrast to de Bono's six-hat theory.

    Resilience & sustainability require a state to be sufficiently self-organising to achieve dynamic stability in its ecosystemic relations. You reckon our suit-wearing duopoly are up to that level of expertise? Not a snow-ball's chance in hell!

    So yeah, the old default into foreign trade dependency will persist. Addiction syndromes have plenty of inertia. Hipkins the dealer…

    • Patricia Bremner 2.1
      27 June 2023 at 11:49 am

      "The baddies"

      We have had shoddy treatment by our other trading partners, and this "China is the baddie" is a bit childish in view of Britain's past attitude to us, Australia's purloining of our best and brightest as if we don't exist, plus sending criminal gang members back here on the most tenuous basis. We have worked over years to change these aspects of our relationships with some success.

      We have been played by our own here in NZ where some encouraged here by past Governments were involved in some very shady dealings with property and trusts.

      China is the base of much of the material to make drugs which is a concern for us. Mr Six name may come up. So, yes there are baddies in all countries.

      The geopolitical moves mean any larger country would use us as a jumping off place. We are a wee player in the "Big boys playground" and behave accordingly.

      By being sincere, practising what we preach, and favouring "rule of law" we have standing in the International scheme of things beyond our size. We do take quite definite stances on issues which we believe in. We are trying to reach consensus on international law and sustainability. Big goals worth trying for.

      We export more than we import from China, and more added value needs to be developed. That takes agreement by the World Bank and friends, the players of no country who could sue if unhappy.

      The delegation has many things to consider, some of them truly difficult. There are few Goodies.

      We align with India in spite of it's odious caste system because it is "Democratic" and we would use them as a foil against dependency on China accordingly, but they have huge problems looming and few answers.

      To equate PM Hipkins as a "Dealer". That is an egregious slur of a metaphor. What would you call Key then? If you meant wheeler dealer in trade sense you should say so. imo

      • Dennis Frank 2.1.1
        27 June 2023 at 12:02 pm

        Yep, Key played the neolib dealer role just like Hipkins. Left=right on that. Pragmatism is a useful default & I get why so many find it appealing. I just feel it is bad to be dependent on any dealer. I kept away from them in the old days when they were so trendy and grow your own became even more trendy so I wasn't alone.

        I also get why many folks feel captured by the system – in the globalised world we can only survive via a subservient stance, they think. I don't blame Labour for being that weak. I just prefer a positive alternative.

        • Patricia Bremner 2.1.1.1
          27 June 2023 at 12:28 pm

          What 'positive alternative' Frank?

          • Dennis Frank 2.1.1.1.1
            27 June 2023 at 12:39 pm

            Back in the '90s the Greens adopted an economic policy based on sustainability as the primary principle. I was part of the working group (led by Jeanette Fitzsimons) that co-designed the draft policy pre-Alliance.

            When I took a look at it in 2015 on the party website I satisfied myself that the main elements we had agreed were still incorporated. Your being unaware of it is due to the current bunch of Green parliamentarians being too timid to inform the public (as were the earlier bunch in the prior decade, as were Jeanette & co when they entered parliament). People talk about resilience as if it were the right thing to do – they just don't actually do it. Incompetence…

            • Patricia Bremner 2.1.1.1.1.1
              27 June 2023 at 1:03 pm

              Thanks for the reply. Yes I am aware, I just was checking where your comments were coming from.yes

              • Dennis Frank …
                27 June 2023 at 1:59 pm

                Oh good. There's times when I find myself thinking "So we did all that work for nothing??" If they fail to front it during this campaign I'll have to dismiss them as a lost cause.

      • Anne 2.1.2
        27 June 2023 at 11:06 pm

        Excellent stuff Patricia.

        And it looks like Hipkin's approach has paid off:

        https://www.nzherald.co.nz/nz/politics/chris-hipkins-makes-his-way-to-tiananmen-square-for-meeting-with-president-xi-jinping/3DSFO3UP2JGH3DXDCZN5AZWJ3I/

        Something that needs to be remembered too. Many decased ago two Kiwis laid the ground work for the good relationship with China. First there was Rewi Alley who do so much for the

        • Anne 2.1.2.1
          27 June 2023 at 11:37 pm

          Please ignore my last comment. 🙁

          The full version:

          Excellent stuff Patricia @ 2.1

          And it looks like Hipkin's approach has paid off:

          https://www.nzherald.co.nz/nz/politics/chris-hipkins-makes-his-way-to-tiananmen-square-for-meeting-with-president-xi-jinping/3DSFO3UP2JGH3DXDCZN5AZWJ3I/

          Something that needs to be remembered. Many decades ago two Kiwis laid the ground work for the good relationship NZ has with China. First there was Rewi Alley who did so much for the Chinese people over the decades, and the Chinese formerly recognised him as an important foreigner in their country. The second was Warren Freer, a former Labour Minister in the 1970s. He had long recognised the huge trade potential that existed and he visited China many times in his efforts to set up dialogue with their trade officials. He was derided and accused of being a communist by his own party leader, and others, and sent to coventry for a period of time.

          But one person understood what he was trying to do and encouraged him behind the scenes. It was the PM and National Party leader, Keith Holyoake.

          It was officially recognised in the early 2000s that their attempts to bring about a good relationship, saw China sign the first trade agreement ever (the FTA) with a western country. I believe that good will still exists today.

          • Patricia Bremner 2.1.2.1.1
            28 June 2023 at 3:34 am

            Yes Anne, (I'm up with a pinched nerve in my neck..Proper pain in the neckwink)

            Many past Socialists saw the Chinese as developing differently to Russia, and a suitable trading partner when Britain and USA became protectionist. Given the Opium Wars it is amazing they accepted us. The Chinese are pragmatic.

            We lost sight of balance and sustainable practice, and chased the timber dried milk and beef wagon plus uncontrolled tourism..

            This has damaged our environment. We have to be smarter. The Gaming, Natural beauty products Cultural and Educational exchanges, and other added value products are part of this Delegation, along with traditional fare.

            Rewi Alley discovered a people willing to work collectively to help improve lives. He laid groundwork for the trust and sharing of ideas. The Chinese think in thousands of years, and their terraced gardens protected against soil loss many hundreds of years before we rabbited on about sustainability.

            They have single mindedly tried to pull their people out of poverty, with some success. Their current Leader is a smart but bullish character. So that needs watching as their system is the opposite of ours, and each has flaws.

            Cheers Anne. Keep wellsmiley

  3. SPC 3
    27 June 2023 at 9:27 am

    On the diplomacy side of it, it would be a good time to give the Chinese some advance notice of a future (public) decision to become part AUKUS 2.

    On the economic side, possibly seeking investment partners to local funds in building long term rental accommodation.

    Another area of interest to us would be lowering our construction costs (alternate supply lines to the local monopolies and maybe even partnerships in factory built homes (some here and some there).

    And after Simon Upton's pro Onslow project opine sound them out as to partnership in the build (also to lower the cost).

    Then there are Auckland projects etc.

  4. Tiger Mountain 4
    27 June 2023 at 12:54 pm

    “Reliant” and “Realism” are not necessarily the models this sparsely populated country should maintain.

    Mutually beneficial bilateral trade and cultural relations are where it is at if NZ aims to give “Washington, Moscow and Beijing” the swerve in terms of being subservient to imperialist powers of any stripe. Although India seems close to joining that three also.

    The Non Aligned Movement of nations would be great for Aotearoa NZ if it could be revived.

    https://en.wikipedia.org/wiki/Non-Aligned_Movement

    AO/NZ cannot have a truly independent foreign policy while we are tied to 5 Eyes security arrangement, and the Anglosphere generally.

    • Ad 4.1
      27 June 2023 at 2:50 pm

      Thank God one commentator still has a pulse.

      Holy Jesus where would we be with a full Realist foreign policy.

      • Tiger Mountain 4.1.1
        28 June 2023 at 10:40 am

        n.b. feel free to use the <sarc> tag in future…so more readers can fully experience your devastating wit

    • SPC 4.2
      27 June 2023 at 3:48 pm

      Does any nation have a truly independent foreign policy?

      The term foreign policy implies in relation to others.

      • Ad 4.2.1
        27 June 2023 at 4:30 pm

        As if cosmically timed, on the same day Hipkins is in China doubling down on our most important foreign policy – the NZ-China Free Trade Agreement – our previous most important foreign policy becomes relevant:

        "Even before Japan announced its decision in April 2021, Pacific states, meeting for the first time in December 2020 as States Parties to the South Pacific Nuclear Free Zone Treaty (Treaty of Rarotonga), “recalled concerns about the environmental impact of the Fukushima Daiichi Nuclear Reactor accident in 2011 and urged Japan to take all steps necessary to address any potential harm to the Pacific”.

        They “called on States to take all appropriate measures within their territory, jurisdiction or control to prevent significant transboundary harm to the territory of another state, as required under international law”.

        These important statements stem from key international legal rules and principles, including the unique obligation placed by the Rarotonga Treaty on Pacific states to “Prevent Dumping” (Article 7), in view of our nuclear testing legacy and its permanent impacts on our peoples’ health, environment and human rights.

        Pacific states therefore have a legal obligation “to prevent the dumping of radioactive wastes and other radioactive matter by anyone” and “not to take any action to assist or encourage the dumping by anyone of radioactive wastes and other radioactive matter at sea anywhere within the South Pacific Nuclear Free Zone”.

        https://www.forumsec.org/2023/06/26/statement-pacific-islands-forum-secretary-general-henry-puna-on-the-fukushima-treated-nuclear-wastewater/

      • Tiger Mountain 4.2.2
        28 June 2023 at 8:53 am

        Possibly not, independent need not infer isolationist as we all exist in the same world, it means not consistently being “under the thumb” of larger powers when political decisions are made by smaller nations.

  5. Patricia Bremner 5
    28 June 2023 at 8:18 am

    Dennis Frank @ 2.111Do you still look at your personal use of Trade Dennis?( To be self sufficient is difficult.)

    I have, and I use a product from Belgium, plus products from India which are currently keeping me alive. My masks are NZ and China, vaccines from USA. (We could make two of those items at far greater cost, which would reflect their environmental cost.) The others… No.

    My point is, the players of “no country” have turned trade and production into chess. We are a pawn, trying to be a Knight.
    I got an error sign, then this detached sorry.

    • Dennis Frank 5.1
      28 June 2023 at 9:07 am

      I'm more pragmatic than ideological Patricia, so yes, I do use products of trade. When in Rome, do as the Romans do. I'm not into purist aversion to trade. It's a question of balance around dependency. As a nation, we depend on foreign trade for our standard of living. We can reduce that by strategic import replacement.

      The right are averse to that since they interpret it as subsidies for local-made stuff, so tariffs don't get used. The left have gone along with that since Roger Douglas made it happen. Well, a shift back towards socialism could succeed if the cost-structure were designed to produce a nationwide consensus that resilience makes it worthwhile…

  6. Adrian Thornton 6
    28 June 2023 at 8:49 am

    "We are going to have to continue to respect governments that we privately loathe"…..I assume you are implying the country in realpoitik land that most of the world regard as the primary existential threat to world peace..therefore stability…the USA..

    People Worldwide Name US as a Major Threat to World Peace. Here’s Why.

    https://truthout.org/articles/people-worldwide-name-us-as-a-major-threat-to-world-peace-heres-why/

    • Ad 6.1
      28 June 2023 at 12:17 pm

      The weak and small loathe the powerful. Often privately.

      • Adrian Thornton 6.1.1
        28 June 2023 at 2:24 pm

        The small and downtrodden often rise up and cut the heads off the powerful too…

        • Ad 6.1.1.1
          28 June 2023 at 2:32 pm

          Unless they can make deals.

          Which is what we've done. Reasonably well.

          • Adrian Thornton 6.1.1.1.1
            28 June 2023 at 3:57 pm

            Yes I agree NZ has done pretty well negotiating the dangerous waters between the rising trading giant of China and the unhinged specter looming menacingly over the globe of the USA as it desperately clings onto is fast fading hegemony….all the while edging the entire planet ever closer to catastrophe.

            Too bad our own media can't negotiate the nuances of geo-politics as finely as our govt has done in this particular engagement.

  7. Mike the Lefty 7
    28 June 2023 at 1:51 pm

    A fact of human existence is that sometimes you have to make pacts with the devil because he has a lot more to offer than the angels.

    • Adrian Thornton 7.1
      28 June 2023 at 2:26 pm

      You lie down with dogs you get up with fleas my friend…and remember the tiny little flea can sometimes be carrier of the plague.