Harder for NZ to avoid picking sides
Rising security tensions will make staying on the sidelines an increasingly awkward position, argues Natasha Hamilton-Hart.
When it comes to engagement with China, do we live in a world where win-win outcomes predominate, or are we playing on a chessboard, where one side’s gain is necessarily a loss for the other? The first view is familiar, comfortable and often true. We prosper if our neighbours, partners and customers prosper.
Sometimes, however, the logic of the chessboard prevails. Some firms relentlessly pursue market share to displace rivals, even at the cost of shortterm profits. In a world where powerful states can pose security threats, economic gains can create strategic advantage.
China’s rise as an economic and military power has triggered a rise in tension between it and the United States. Official American statements since 2017 describe China as an adversary, a rival and a strategic competitor. Although the tone has moderated under President Joe Biden, there is no fundamental revision.
The ‘‘tech war’’ between the two has led to an array of restrictions imposed on technology-related transactions involving American and Chinese companies, as each side pursues technological autonomy and advantage. This has not changed with Donald Trump’s exit, and both sides have in fact tightened restrictions in recent months.
The security-driven strategic rivalry between the US and China forces New Zealand into an uncomfortable position.
We have already begun to think about the trade-offs between ethics and the economy. How do we respond to human rights abuses in China, given how much we depend on trade with it? Foreign Minister Nanaia Mahuta’s recent speech on China emphasised the need for New Zealand to pursue its interests and stand by its values, acknowledging that sometimes the two will be at odds.
Recent reporting from Stuff has delved into whether business partnerships might unwittingly connect Kiwi technology firms to repression in China’s Xinjiang province. Businesses are moving to ensure their global supply chains are free of forced labour – and may risk Chinese retaliation as a result.
These are hard issues for consumers and businesses to wrestle with. When the political conditions impede the operations of independent auditors, there is no credible way to vet working conditions and labour rights in individual firms. Given the extensive powers of the Chinese Communist Party, assurances about the end-use of jointly developed technology cannot be accepted at face value.
The ethics-economy dilemma is not the only one we face. The strategic rivalry between the US and China threatens some longstanding pillars of New Zealand foreign policy. The first is the assumption that security and business belong in separate spheres. This is no longer tenable. In part, this is inherent to the nature of advanced technologies, many of which are intrinsically dual-use.
It is also a function of China’s deliberate ‘‘military-civil fusion’’. As described in a 2020 US Defence Department report to Congress, the strategy aims at ‘‘fusing China’s defence industrial base and its civilian technology and industrial base. This means there is not a clear line between [China’s] civilian and military economies, raising due diligence costs for US and global entities that do not desire to contribute to [China’s] military modernisation’’.
A second pillar of our foreign policy thinking is that we maintain independence and avoid picking sides in disputes that do not concern us. But as security concerns rise, it is harder to treat each issue on its merits, with no consideration of loyalty or friendship.
As we have seen in the blowback to New Zealand’s publicly stated wish to avoid using the Five Eyes intelligence group for broader diplomatic purposes, independence can be interpreted as signalling something else. China’s Global Times lauded New Zealand’s statements on Five Eyes as helpful, whatever New Zealand’s actual intentions.
Not picking a side also has uneven effects, given the momentum of China’s rise and the consolidation of an increasingly Sinocentric regional economy. In March, the Global Times advised other countries that it would be ‘‘wise to keep neutral, and not to take sides in China-US strategic contest’’.
Not picking sides may become increasingly difficult.
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