A few days ago, I posted a short article entitled “Why not AUKUS”. Unsurprisingly, it prompted a range of reactions.
There were some who agreed with my analysis and conclusion, but many of those who commented did not. So now I am doing something I have not done previously, namely replying to some of those critics.
But first let me try to restate my position.
I see no upside in New Zealand’s taking any part in a military alliance the explicit purpose of which is to push back against China. If we are not part of AUKUS, the likelihood of China or anybody else attacking us is very remote. We’re a very long way from China geographically. Many people don’t know that while it takes 12 hours 30 minutes to fly from Auckland to Beijing it takes just 9 hours 40 minutes to fly from Berlin to Beijing. We’re a very long way away from China.
Yes, China may wish to get their hands on our resources, but they can do that without bloodshed by buying those resources in return for things that we want from China, as happens to the benefit of both countries now.
And there is a substantial downside in belonging to AUKUS. By joining an explicitly anti-China military alliance, we place a target on our chest in the event of war. And short of war, we antagonize the country which is, by a substantial margin, our largest trading partner. Would China seek to punish us in some way for signing up to an explicitly anti-China alliance? I don’t know of course but it would be hard to blame them if they did. At the moment, we have a high-quality free trade agreement with China, and have had for some 16 years. To date, we have been unable to achieve such an agreement with the United States, or with such alternative markets as India.
Various arguments have been advanced by those who disagree with my position.
First, some have suggested that there is a fundamental difference between the United States and China: the former is a democracy and the latter is not, so it follows that we should be an ally of the US and opposed to China. Leaving aside the fact that the Economist magazine classifies the United States as a “flawed democracy”, it is important to recognize that the tension between the US and China has little or nothing to do with the fact that one is a democracy and the other is not. The US has historically been allied to plenty of countries which were not democracies, and even now is closely allied to countries such as Egypt and Saudi Arabia, both of which are a very long way indeed from being democracies in any meaningful sense. The US is now hellbent on developing a close relationship with Vietnam – not only not a democracy, but an explicitly communist country.
No, the struggle for influence between the US and China is not a struggle between democracy and autocracy but an old-fashioned struggle between an established Power and a rising Power, of the kind that Graham Allison wrote about in his book Destined for war: Can America and China escape Thucydides’ trap?
Second, some have suggested we could run the risk of insulting China if we simply diversified our export trade more effectively. Why did we allow ourselves to become so dependent on the Chinese market? As implied a moment ago, we’ve become heavily dependent on the Chinese market because it is by a very large margin the most attractive market for most of our exports. We have recently managed to sign a so-called free trade agreement with the European Union, but it falls a long way short of the agreement we have with China. We’ve had absolutely no success in gaining meaningful access to the Indian market, and we have no free trade agreement with the US. Unlike the commodities that Australia exports – iron ore, coal, natural gas, and so on – our exports face barriers in many markets. Several New Zealand industries would be devastated if the Chinese market were closed off to them.
Third, some have suggested that China is an expansionist Power which, if unchecked by the US and its allies, would push aggressively into surrounding countries. China’s claim to Taiwan and parts of the South China Sea are cited as evidence. But both are special cases.
As I explained in the earlier article, Taiwan was part of China for centuries prior to 1894 when it was ceded to Japan after Japan attacked China. (For the US to claim, correctly, that Taiwan has never been ruled by the Chinese Communist Party is disingenuous. It was, for centuries, part of China.) Both New Zealand and the United States, together with most other countries in the world, recognize only one China, with its capital in Beijing.
As for the South China Sea, that area is subject to competing claims by a number of countries, including Malaysia, Vietnam and the Philippines. Given that a high proportion of Chinese sea-borne trade flows through the South China Sea, it is unsurprising that China is not enthusiastic about the close military alliance between the Philippines and the US.
Fourth, it is suggested that because I am the chairman of the New Zealand subsidiary of a Chinese bank I am not objective about New Zealand’s relationship with China. I can’t do much about that perception. The Reserve Bank of New Zealand requires every foreign-owned bank to have a New Zealand chairman (and as many New Zealand directors as foreign directors), and I have been the chairman for 10 years. I have visited China twice in that capacity. I have visited China a total of 15 times – once to acquire new kiwifruit plant material when I was CEO of the New Zealand Kiwifruit Authority (the precursor of Zespri) in 1986 and many times when I was Governor of the Reserve Bank and when I was Leader of the Opposition. I have visited once as a tourist.
I have incidentally lived for five years in the US, and have visited the US almost every single year on business or as a tourist over the last 50 years.
In 2012, Kurt Campbell, the US Assistant Secretary of State, told Audrey Young of the New Zealand Herald that
“We do not want countries to feel that they need to choose [between the US and China]; we want countries that have a strong relationship with China and a strong relationship with the United States…. Not only do we encourage strong dialogue and engagement, for instance between New Zealand and China, we are counting on it.”
Kurt Campbell is again the US Assistant Secretary of State but his message to Winston Peters when Mr Peters called on him in Washington earlier this month was very different. Now he is urging New Zealand to sign up to AUKUS Pillar II.
When the Prime Minister visited Singapore a few days ago, he met with the Prime Minister of Singapore of course. Mr Lee Hsien Loong told Christopher Luxon that Singapore is
“a major security cooperation partner of the US. This is a technical term. We are the only one of its kind in the world. That means we do a lot of security cooperation with the US – security in terms of counterterrorism, for example anti-extremism, but also in terms of defence cooperation, in terms of defence purchases, training. But we are cooperation partners, not treaty partners, not treaty allies. And there is a fundamental difference. Therefore, we can cooperate with [the US] in many different ways, but push comes to shove, there is no treaty obligation.”
I can’t see why that would not also work for New Zealand.
Don Brash
21 April 2024