Two big developments this week have brought a real edge to the high-sounding words of NZ and the US at an earlier conference in Wellington on relations with China
Last week, China’s increasingly authoritarian President, Xi Jinping, announced he wanted Taiwan reunited with China, by military force if necessary, by 2049 – the one hundredth anniversary of the formation of the People’s Republic of China. While the re-absorption of Taiwan into China has long been an objective of the Chinese regime, this is the first time a specific timeframe has been set out.
President Xi’s announcement immediately sparked speculation about how firm Taiwan’s hitherto allies, led by the United States, would prove to be in the face of this increased provocation. Would they be prepared to act to protect Taiwan’s independence in the event of a pre-emptive move by Beijing, increasing the likelihood of all-out military conflict with China, or would they ultimately back-off in the wider interests of preserving peace in the region and beyond? Parallels were already being drawn with the fate of Czechoslovakia, sacrificed by Britain and its European allies to Nazi Germany in 1938 in a vain attempt to satisfy Hitler’s territorial ambitions (“this is my last territorial demand in Europe”) and prevent another World War. Is Taiwan destined for a similar fate, and would its sacrifice prove to be just as futile as that of Czechoslovakia?
President Xi’s statement has increased the mounting pressure on New Zealand over its relationship with China. China is already our major trading partner, with current two-way trade worth about NZ$33 billion a year, with exports to China around 30% of our total exports. It has long been considered that New Zealand has much to lose if it acts in a way that causes China to take retaliatory economic action against New Zealand, the way it has done recently against Australia.Yet Taiwan is also a significant trade partner – our seventh largest – with annual exports of around NZ$840 million, a far higher per capita rate than to China.
To date, New Zealand has chosen the path of least resistance to China, for fear of upsetting the trade relationship. At the same time however, it has been continuing to progress its trade and wider relationship with Taiwan, although maintaining its non-diplomatic recognition of that country. While in recent times New Zealand has been more willing to support Taiwan’s participation in multilateral gatherings like the World Health Assembly, it remains firmly committed to the one-China policy adopted in 1972.
Against this backdrop, there was keen interest in the Prime Minister’s speech to the New Zealand Institute of International Affairs last week. Observers were looking to see what hints it might contain about the future direction of New Zealand’s relationship with China, especially since one of the speakers following the Prime Minister was Kurt Campbell, often referred to as President Biden’s “Asia Tsar”.
Much was made of the Prime Minister’s use of the term “Indo-Pacific” to describe our region. This is reputedly the American favoured description, as opposed to the “Asia-Pacific” description preferred by China. The Prime Minister’s repeated use of the phrase “Indo-Pacific” was interpreted in many quarters as significant, but this may have been an overstatement – after all, nearly a decade ago former Governor-General Sir Anand Satyanand observed that India and New Zealand were the “bookends” of Asia.
There were, however, more significant clues in other parts of the Prime Minister’s speech. Early on, she referred to China “as an engine of global growth”. But she added it was, “one of our most significant, but also one of our increasingly complex relationships.”
She then set out the five key principles guiding current New Zealand foreign policy – respect for the rules; openness, inclusivity; respect for sovereignty, and transparency. She added that for New Zealand openness and inclusivity were most important, adding that “often language and geographic ‘frames’ are used as subtext, or a tool to exclude some nations from dialogue” but that New Zealand wanted to work with the widest range of partners. In a telling sentence she added “we also have serious concerns over the situation in the South China Sea, including artificial island building, continued militarisation, and activities which pose risk to freedom of navigation and overflight.”
Kurt Campbell’s speech set out the United States’ position succinctly. He said, “the United States does not seek a new Cold War, we do not seek a harmful or deleterious competition with China: what we are seeking is a stable relationship”. In a clear pitch towards New Zealand’s commitment, he added “The problems are so overwhelming, they’re so challenging that we are better off tackling them together.”
Both the Prime Minister and he would have known at the time of their remarks of the pending joint initiative announced this week by the United States, the United Kingdom, Japan, New Zealand, and other countries to counter cyber incursions from China. Indeed, this announcement puts into a sharper context, the more generalised statements made by both New Zealand and the United States about China last week. Forget the discussion about subtle shifts in the language, or the grandiose general principles that underpin our foreign policy, New Zealand has now made a significant move towards aligning with the United States’ side of the ledger when it comes to dealing with China.
The implications are substantial but will take time to become entirely clear. China has already attacked New Zealand’s involvement as “totally groundless and irresponsible” and smacking of “a Cold War mentality.” In language typical of the Xi Jinping administration, it dismisses “the slander against China” as “excessive” and warns that “if the US takes aggressive measures, carries out national-level cyber-attacks on China, or imposes so-called sanctions on China, we will retaliate.” Its initial fury is directed towards the United States but is unlikely to exclude New Zealand in the longer term, especially if the joint initiative starts to bite China in a meaningful way.
That leaves New Zealand in a potentially precarious position given its isolation and economic insignificance. We would be an easy target for China to make an international example of, should it choose to do so. China has already shown against Australia that it not averse to imposing punitive economic sanctions when it feels it needs to. So, there is no reason to believe New Zealand would be treated any differently if China felt sufficiently riled. We can ill-afford significant disruption to our two-way trade with China, especially the 30 percent of our exports currently going there.
Therefore, one hopes the New Zealand government is developing a contingency plan for this eventuality, including the possibility of compensatory trade access to the United States, (better still a Free Trade agreement) should China retaliate against New Zealand in this way.
Taiwan is a longer-term issue but Xi Jinping’s announcement that he wants reunification by whatever means within the next 30 years introduces an immediacy that has not been there previously. Time will tell whether his comments are more sabre-rattling rhetoric designed to unsettle the situation further or should be taken more seriously. However, President Xi is far more activist than any of his predecessors in pushing China’s external concerns so his threats about Taiwan cannot be easily ignored.
None of this will be welcome news to the United States and others that have preferred to keep the Taiwan issue on the “back-burner” for years now, and assumed China was doing likewise. President Xi’s statement puts pressure back on the United States and the rest of its friends and allies in the “Indo-Pacific”. If they remain silent, they will simply embolden China to believe it could get away with military intervention against Taiwan. But if they uphold the broad principles of democracy and respect for sovereignty referred to in the Prime Minister’s speech there will be an expectation of firmer support for Taiwan. What form could that take, and what contribution might New Zealand be expected to make? Or will they just follow the shameful precedent of Czechoslovakia and seek to appease the modern dictator?
The Prime Minister’s speech was both interesting and useful. It spelled out clearly aspects of New Zealand’s foreign policy while shunting us ever so gently more in the direction of the United States, without specifically saying so. However, it has consequently raised further questions about our ongoing relationship with China, and how it will be managed. The Prime Minister’s speech referred nobly to the need for regional governments “to recommit to supporting an open and rules-based regional order” but was noticeably light on the details of how that might be achieved.
But both President Xi’s announcement about Taiwan, and the joint initiative on cyber-attacks have happened since the speech and give sharp focus to the points it raised. New Zealand’s days juggling a “complex” relationship with China on the one hand and working with partners in the “Indo-Pacific” on the other have just got a great deal more challenging.
