DON BRASH: OUR FOREIGN POLICY IS INCREASINGLY NUTS

Until quite recently, New Zealand Governments of both the Left and the Right were keen to maintain a broadly cordial relationship with China, our largest trading partner, and with the United States, our traditional security partner. We occasionally criticized China and didn’t always vote with the United States in the United Nations but we were keen to maintain a friendly relationship with both.

And neither country seemed uncomfortable with that. In late 2012, Kurt Campbell, then the US Assistant Secretary of State, stated that ‘We do not want countries to feel that they need to choose [between the United States and China]; we want countries that have both 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.’

But that began to change from the time that Jacinda Ardern decided to become the first New Zealand Prime Minister to take part in a NATO Leaders’ meeting in June 2022, and suddenly there was talk of NATO taking an interest in the Asia-Pacific – which was renamed the Indo-Pacific to please the United States – and of South Korea, Japan, Australia and New Zealand forming an informal bloc, implicitly against China.

And the Luxon Government seems intent on offending China and currying favour with the United States at every opportunity.

Less than 24 hours after hosting the Chinese Premier to dinner in Auckland, Mr Luxon flew to Tokyo. He has visited lots of other Asian capitals, and has spoken enthusiastically about our close relationship with the Philippines (itself in an acrimonious relationship with China) and his desire to build a much closer relationship with India, widely regarded as in competition with China for global influence. He is currently in Europe.

But 18 months into the term of his Government, he has not yet visited China. Last year he authorized sending a New Zealand naval vessel through the Taiwan Strait, regarded as highly provocative by China given that China regards Taiwan as a part of China and that we have recognized that fact for more than half a century. He feigned surprise and dismay when China sailed a naval vessel of its own through the (very much larger) Tasman Sea months later.

He’s been content to allow his Foreign Minister, Winston Peters, to visit the United States recently and wax lyrical about “our common strategic interests”; and to allow Mr Peters and Defence Minister Judith Collins to talk up the prospect of New Zealand’s forming some kind of association with the explicitly anti-China AUKUS alliance.

And to top it off, he allowed one of his National Party MPs to lead a delegation of seven MPs from across Parliament to visit Taiwan; and not only visit Taiwan but to meet with Taiwan’s president. No, there were no Ministers in the delegation, but they were all members of the New Zealand Parliament, and it is not in the least surprising that China has reacted angrily.

The cumulative impression which the Government seems keen to promote is that we simply don’t care about offending China, and are keen to sign up to a closer and closer strategic relationship with the United States.

This would be seriously unwise behaviour at any time, but at a time when the United States is itself going through a period of almost unparalleled turmoil – with the President imposing massive tariffs on a whim and inviting countries to “kiss his ass” if they want to renegotiate these; ignoring unanimous Supreme Court decisions when the Court rules against him; telling Ukraine to accept Russia’s terms if it wants a peace deal because, he claims, Ukraine started the war by attacking Russia; threatening to fire the chairman of the Federal Reserve Board (whom he himself appointed); and threatening to take over Canada, Greenland and the Panama Canal, by force if necessary – it seems the very height of stupidity.

Why on earth, in this situation, is the Government intent on painting a target on our back, making an enemy of our closest trading partner?

There are those who will argue that China is a militarily aggressive country which in recent years has been hugely expanding its armed forces. It is certainly true that China has greatly expanded its military forces in recent years, though it still spends a fraction of what the US does on its armed forces. And given that it no doubt feels threatened by very large US military forces all around its eastern perimeter – South Korea, Japan, Guam, the Philippines, Papua New Guinea and Australia – that is hardly surprising. Ask yourself whether the US would be comfortable with Chinese forces in Canada and Mexico, or even in Peru and Brazil.

Looking to the future, there seem to be three possible geopolitical outcomes.

There might be no war between the United States and China, and we must all fervently hope for that outcome. If there is no war, we gain nothing and lose a great deal by forming a close alliance with the United States and offending our largest trading partner.

Second, there might be a conventional (that is, non-nuclear) war between the United States and China. Nothing which we could do militarily would make the slightest difference to the outcome of such a conflict and our interests would be best served by remaining neutral. There would certainly be nothing to be gained by taking up our limited arms against China. In the opinion of such authorities as Hugh White, professor of strategic studies at the Australian National University, this kind of war is likely to be lost by the United States, which would be fighting over very long supply lines, a long way from its own industrial base. America’s record of fighting wars against moderately well organised adversaries who are fighting for their very existence – think Vietnam and Afghanistan – suggests that betting on an American victory would be unwise.

Third, there might be a war which turns nuclear. The United States clearly has a very considerable numerical advantage in terms of both number of warheads and means of delivery of those warheads. But both countries have fully sufficient warheads and the means to deliver those warheads to create unimaginable devastation, from which neither country would emerge in any meaningful sense as victorious. Being involved in such a war would have no conceivable advantage to New Zealand, and would have no effect on the outcome.

Everything points to our need to maintain a cordial relationship with both China and the United States, quite explicitly not part of any strategic partnership with either country.

Don Brash

24 April 2025

Declaration of interest: I have visited China in various capacities since I first visited in 1986 as the CEO of the New Zealand Kiwifruit Authority seeking to acquire new kiwifruit plant material. I visited several times as Governor of the Reserve Bank in the ‘nineties, and have visited on several subsequent occasions – when I was Leader of the National Party in Parliament, to lecture at a university in Beijing, and as chairman of the New Zealand subsidiary of the Industrial and Commercial Bank of China (the largest bank in the world in terms of total assets). I have visited once as a tourist. I have lived for five years in Washington DC, have visited the US subsequently as a guest of the State Department, and many times in my capacity as Reserve Bank Governor and as a commercial banker. I have also spent many holidays in the US.

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