Jacinda Adern: "managing the relationship is never going to be easy"
The theme of this year’s China Business Summit was “The New China Paradigm” – setting the scene for wide-ranging discourses from a range of speakers, including the Rt Hon Jacinda Ardern and two former Prime Ministers.
The summit attempts to give a pulse-reading of the relationship between New Zealand and China, with the major themes being:
- The global geopolitical context (China vs ‘the West’) is making it more difficult for New Zealand to take the middle road, and those in government are feeling this.
- Despite much talk of “choosing a side”, there is still a strong will to stick to our guns whether it be calling out suspected human rights abuses or what we perceive as undue pressure from our traditional allies.
- Although there is concern about over reliance on China for our exports, a pragmatic approach is the only expected way forward. Where the opportunity lies, there business will go.
The Prime Minister’s take
"Differences between our systems... are becoming harder to reconcile" – Prime Minister Jacinda Adern
Prime Minister Ardern gave the opening keynote address. The tone was noticeably more cautious than her 2019 pre-Covid speech at the same event (which you can find online).
She started by recapping the first three points from the previous year, namely: China’s geostrategic significance is growing; we need to work hard to manage the differences that exist between New Zealand and China; and there are opportunities for working together.
However, she added a fourth point, which gave a hint to the political sentiment already so present in our media, namely that "managing the relationship is never going to be easy" and the "differences are becoming harder to reconcile".
While setting the scene for potential discord ahead, she followed these statements up by stating this "need not derail our relationship".
Her signalling of the potential rockier road ahead were lines that caused quite a stir in online headlines - likely more due to the apparent tone than content - but it was a theme echoed by several speakers.
The Chinese Ambassador’s take
"Let’s stand on the right side of history" - Ambassador Wu Xi
Chinese Ambassador to New Zealand Wu Xi painted a picture of China’s government striving for the happiness of their people and opening up to the world.
Xi’s message was clear - China’s prosperity is New Zealand’s, too.
The Ambassador also added that a respect for their internal affairs was the best approach to "maintain the stability of our trading relationship", before ending with "let’s stand on the right side of history".
Accepting the reality of China
“We have to accept that the global position of China is changing” – John Key
Former Prime Minister Sir John Key noted that "China will be the largest economy in the world by some margin" and New Zealand should be pragmatic in our dealings with the superpower
It’s not news that China is a new superpower, and that its trajectory is only expected to stay the present course. The general sense, though, was that this reality is just sinking in for many, which is bringing our two countries’ differences (and the West more generally) to a head.
Sir John Key’s take was that we need to be pragmatic, after all, “China will be the largest economy in the world by some margin”.
So, what if we have differences in values? Should we bite our tongue? Not at all, Key said. But, perhaps it would be more effective to affect change through the role of a friend, rather than a preaching adversary.
Diversification away from China
The word of the day would probably have to be “diversification”, as it was mentioned by a majority of the speakers.
None of them seemed to materially disagree that diversifying [looking for new export markets] was a good general business strategy, and the example of our reliance on the UK importing our goods in the past was brought up several times.
Dual circulation: The future of China’s growth
“Looking inward” versus “closing”
Rodney Jones of Wigram Capital was a highlight of the summit. He spoke on the often misunderstood “dual circulation” economy being worked towards in China.
In essence, the potential for export growth for China is slowing down rapidly. While it will remain open to exports, China will also need to look inward and grow its domestic economy as a matter of priority.
Jones put things into perspective - New Zealand accounts for about 0.5% of China’s imports, and Australia accounts for 5%.
“We’re a bit player”, he said, but fortunately for us - despite the expected “inward looking” of our largest trading partner - their growth is so fast it will equate to a net gain. The official stated target is 6%, his firm expects up to 12%.
As exports slow down, Chinese businesses will increasingly look inwards and target the country's growing middle class
Looking to the future
“This is an era, not a passing moment” – Richard Maude
Helen Clark made an analogy about our discussions with China as roads, and our differences as “road bumps”. She conceded that we, of course, have major differences in values, but also things we can work towards together.
One of the visiting speakers from Australia, Richard Maude, who the Foundation sponsored to speak at the event, said we need to think of China’s growing influence in the region as “an era, not a passing moment”.
No one is under any illusions that, as Helen Clark put it, road bumps exist for NZ-China relations, but perhaps by being strategic where we place them we could help make the journey a pleasant one.
By Edward Smith with edits by the Asia New Zealand Foundation