David Mahon calls on New Zealand to act in its own best interests and do its best to avoid the US-China strategic rivalry. Among the growing uncertainties, there are opportunities for us, he says

David Mahon calls on New Zealand to act in its own best interests and do its best to avoid the US-China strategic rivalry. Among the growing uncertainties, there are opportunities for us, he says

By David Mahon*

Some commentators argue that China and the United States are moving to the brink of a cold war.

The US is manoeuvring somewhat blindly, placing tariffs on Chinese goods, embargoes on US technology companies supplying Chinese firms, restrictions on US Government pension funds investing in Chinese stocks, trying to reduce US businesses’ presence in Hong Kong, and firing salvos of intemperate presidential tweets.

But the United States and China are far from a cold war.

The US and USSR shared little economic interdependence, and while direct military conflict was mostly avoided, the sides often displayed the means and will to destroy each other. China lacks the conventional military means to fight the United States, yet possesses the ballistic nuclear capability to engage in mutual annihilation. But China does not want a commercial conflict, and even less a military one.

Within six months of a presidential election, the Republican Party is stoking the fires of nationalism, keen to shift blame to China for its ravaged healthcare system under the onslaught of COVID-19, tens of thousands of avoidable deaths from the virus, soaring unemployment, and stumbling economy. The nationalism and demonising of China will increase leading up to November and then likely abate in outward intensity, while continuing in substance, regardless of which party wins the election.

In the face of US belligerence, China’s best strategy is non-action. China has not always followed this strategy, but been well-served when it has managed not to react. Not reacting will continue to benefit China over the next few years, possibly giving the United States time to step back from the brink and see that its actions hurt the US economy while not damaging China substantially. Beijing is undertaking many economic reforms the US mistakenly accuses it of resisting. In March, Beijing issued a licence to US stressed-assets manager Oaktree to purchase and trade highly sensitive and largely state owned non-performing bank loans. Chinese banks are now open to foreign buyers, and foreign life insurers, futures, mutual fund companies and securities firms are free to take controlling stakes in their Chinese counterparts.

Beijing now understands that Washington is determined to damage and curtail its economy by almost any means, and carry out previous threats to decouple, not just from China but from longstanding trading partners, allies, and international forums. China and the world are watching the US pull out of, or otherwise damage one international body after another, and place over 30 countries under economic sanctions.

Empires usually fail from within long before they are overtaken from without. The American Empire, still so wealthy and powerful, is faltering internally. Its democratic processes are broken, both political parties are captive to corporate interests, and that key instrument of a transparent and functioning political system, the rule of law, has become an ideological tug of partisan political interests as Republicans and Democrats struggle to stack and coerce the Supreme Court.  Absent schadenfreude in some quarters in China, the leadership perceives America’s demise as a risk to global economic stability and prosperity.   

You’re either with us or against us

Smaller nations cannot always expect to walk a line between the US and China deftly, taking neutral stances while relying on the understanding and trust of both sides. Neutrality confers a degree of political irrelevance on a country, something geographically isolated New Zealand cannot afford.

Most Asian economies, while relying on China, depend on the United States to maintain the balance of power in the region. Singapore, Malaysia and Indonesia have all criticised China’s territorial claims at some point in recent years, but with the exception of Vietnam, avoided damaging their relationships with Beijing. One of their shared strengths is that they are not bound to an alliance of the Western elite through the ‘Five Eyes’ intelligence sharing network.

Unless New Zealand is firm in measuring its participation in the Five Eyes club, it will erode the independence it has so long striven to maintain.

Canberra’s China policies are but echoes of Washington’s. New Zealand needs to question whether it wants to be associated with a US foreign policy that is increasingly belligerent, bereft of any cogent strategies, and recklessly anti-Chinese. New Zealand’s choice at the end of May not to join the other Five Eyes nations in condemning the Hong Kong security law is a positive indication of Wellington’s determination not to take sides in a complex situation that China sees as an internal matter.

If New Zealand fails to include Huawei without justifications as it builds the national 5G network, its relationship with China may suffer, including possibly from Chinese non-tariff trade barriers. The US has still been unable to demonstrate security or technical reasons to reject Huawei, something Britain deduced in January before bowing later to pressure from Washington.

New Zealand’s interests would be better served stepping back from the Western anti-China herd and finding its own position, hard to do when one of the government’s coalition partners is working to take New Zealand back to the 1970s, when in a real cold war New Zealand supported many of the United States’ foreign policy positions.

In disputes between the US and China, New Zealand has thus far managed to act in its own economic interests, and in accordance with the tenets of international law it deems fair. New Zealand will not always get it right, and at times will need to criticise China’s actions. But for now New Zealand’s political integrity and economic relations with China appear to be in reasonable balance.

Recovery and growth

The recovery of the Chinese economy has gathered momentum in the last months and will be the main engine of global recovery in the years to come. More than ever, China’s trading partners (of which 127 trade more with China than the US) should look to their own common wealth and economic stability, and not be influenced by the fulminations of a rudderless United States.

China has the potential to lend crucial support to the global economy through the force of its domestic demand. For eight years, consumption and services have been China’s main economic drivers, rather than domestic investment and exports. COVID-19 seems to have been constrained and controlled in China to the degree that over 100 million people travelled for leisure during the country’s five-day May holiday. No spike in coronavirus infections has been reported. Auto sales were down 79.1% year-on-year in February, but up 4.5% in April, the first monthly increase in auto sales growth since mid 2018. Smartphone shipments fell 54.7% YoY in February, then rose 17.2% in April, 6.5% higher than the previous April growth rate. Nominal retail sales grew 8%.

Opportunities for New Zealand

New Zealand has an opportunity to consolidate its position in the produce and protein sectors of China. A number of industries could apply the Zespri ‘free market co-operative model’, a collaboration that is not a formal co-operative like Fonterra, but the expression of the unity and clear commercial aims of a single sector. Zespri enjoys the support of 98% of New Zealand kiwifruit growers. This model may be adapted to the meat, seafood, forestry and manuka honey sectors, to name a few.

New Zealand’s government announced a NZD 50 billion fund to support economic recovery and alleviate suffering as a result of COVID-19. It would be prudent to allocate NZD 10 billion to a national ‘value’ fund that invested in good businesses, increasing their scale to take on global markets, and in doing so increasing tax revenues and employment. It could be managed by the best commercial and strategic minds in the country, regardless of political affiliation (a true team of rivals), generating dividends to New Zealand taxpayers and the means of its own expansion as a permanent resource for a country often starved of domestic investment capital.

Such a fund would soon attract the interests of global investors, both sovereign and private, seeking the security, value and transparency of the New Zealand economy. The fund could not only look at the primary sector but innovative technology in such areas as food safety, health care, computer games, and film and television. With more companies of scale, New Zealand would be in a better position to establish strong commercial platforms and establish brands, not just in China but in growth markets such as Indonesia, India and Vietnam. There are over 600 million consumers in ASEAN’s ten member states alone.

New Zealand is well considered in China and respected for its history of tenacious independence. New Zealand’s free trade agreement with China has given it unique advantages, helping it avoid the worst aspects of the Global Financial Crises, as it may mitigate the worst effects of the global economic slump caused by COVID-19. All major economies will be competing for Chinese customers to revive their beleaguered, debt-laden economies, and so New Zealand needs to approach China in a new way, with greater unity and well considered and resourced commercial strategies.


*David Mahon is the Executive Chairman of Beijing-based Mahon China Investment Management Limited, which was founded in 1985. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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100 Comments

[ Please comment on the issue. Jumping to conclusions is lazy. Ed ]

[ You are welcome to comment on the issues raised. Keep the personal smears away from interest.co.nz. Ed ]

39
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What concerns me about this article, however sensible the advice might be in purely economic terms, is the total absence of any mention of China's increasing authoritarianism, to put in mildly. Dissent is less tolerated than before-it is simply undeniable that there are Uighur concentration camps under the guise of 're-education' camps, that China is becoming ever more belligerent in the South China Sea, that it has been involved in commercial espionage on a grand scale for years and so on.
The US is increasingly dystopian and I don't envy any NZ government in having to dance between two large and angry elephants, but unless there is absolutely no place for morality in our international affairs, the we need to be prepared to speak up.
Apart from that, who believes any official figures from China? Their GDP figures have been overstated many years and occasionally that has been admitted by officials. How much bad debt is there in the banking system, including the shadow banking system?
It is imperative that NZ seeks to diversify its trading base to give us greater resilience.

14
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Apart from that, who believes any official figures from China?

What does that have to do with us, so long as China pays for our delivered products.

10
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“Increasing authoritarianism...?” I think we need to look in the mirror. Police can enter your home without a warrant, our govt is waging war on free speech that doesn’t conform to their leftist agenda and we’ve been under house arrest for the first time in our history. Hardly the image of a “free” country...

Nonsense!

I too subscribe to these newsletters! These newsletters tell us the real truth!1!

31
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David, we seem to have had a number of articles in recent months by authors based in China or with China business ties (I.e. with skin in the game) to encourage NZ to accept Chinas atrocities without so much as a mention. I'd love to see some balance to this with arguements we should in fact be detaching ourselves from this regime.

20
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That is plain wrong. The vast majority of all our coverage is US focused (outside of Australia and New Zealand).

Our's is a platform that focuses on the economic side of life. Yes, politics plays an important role that. But if you want to follow human rights issues, communism-vs-capitalism, and other such pure-politics you are not going to find anything but tangental coverage here. We are always going to be a platform where a wide range of ideas are given exposure for debate. But it must be rational debate. Our core role is to explain what is happening to the New Zealand economy, to New Zealanders.

Too many commenting readers seem to think that if we don't run articles to confirm their longstanding bias, then we are running 'fake news' That is just childish. Read and make up your own mind. There is nothing more closed that views based on 'certainty'. The real world is full of uncertainties, and religious, environmental or political "certainties" are almost all cheap and shallow and fail at some point.

Comment links by readers to alternatives are always available here, and are popular (although some readers penchant for the links to Russian trolls or alt-right white nationalism are a frustrating dowside).

Everyone has bias, me included. Attempting to get us to stop valid perspectives you don't like should be beneath you. If we did what you say, what would be your argument when we also banned viewpoints from authors who have "business ties" with the US, with Japan, with the EU, the UK? I doubt you want 'balance'; what you seem to want is attack without balance. Never going to happen here. Try Fox News or Sky After Dark or other culture-war outlets.

Remember, we aren't your only source of news, views or information. And we shouldn't be.

(Sorry, Glitzy, this isn't actually aimed at you specifically. You just triggered it.)

15
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You can't separate politics from economics. Fundamentally inter-connected.

But we are not trying to separate them. They are just not the primary reason interest.co.nz exists. However, if full-on politics is your thing you will find views you like in your regular echo chamber.

19
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I expect balance in journalism. I don't at all expect all articles or anywhere near all articles, to accord with my or anyone's views. That is what democracy is all about.
But let's look at this objectively David. The author of this article has made a number of criticisms of the USA, both economic and political. And I think they are,at least to some extent, justified.

But criticism on both fronts of China is equally justified. Yet there is none. And yet there is much to be critical of.

I guess that is fine. It's a free world here, fortunately, after all.

But it's also a free world for readers to criticize the lack of balance within an article, and to perhaps conclude that the author has a biased viewpoint. And for us to keep that in mind whenever we read anything else written by the author.

15
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"Mahon China is an established investment manager and advisor based in mainland China."
I think that tells us all we need to know.

I expect more than balance in journalism.

If you put up he-said she-said, you've given 50% exposure to a falsehood, guaranteed. That's not balanced, that giving oxygen to a lie.

Journalism should be about ascertaining the truth, or as near you can get to it. End story.

15
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David, understood the comments aren't personal and they aren't taken as such.

We are however in a relatively new world. Xi has been in power eight years and in this time we have seen economic and political agression that we have never seen from China before. Military build up in the South China Sea, detention camps in Xin Jiang, a huge step up in industrial espionage, oppression in Hong Kong with illegal rendition. One could go on and on but you get the point. China has changed under Xi.

When I read these articles not only on Interest but across news media, and there have been many, by folks based in China which advocate further trade without any discussion not about the above issues but about whether we as a country want to empower a brutally aggressive regime through providing economic opportunity it grinds. We dont live in a one dimensional world.

My thought is not that we ban such authors contributing but as I said in my initial comment, encourage others with an alternative view to also contribute.

Given the strength of opinion from readers and the awaking realization that politics and trade are linked isnt it time to broaden the discussion a little and perhaps question what we really gain from empowering the CCP because nobody has any issue with the Chinese people, it is their government that's the issue.

I love this from Malcolm Muggeridge, about the news;

"In the beginning was the Lie and the Lie was made news and dwelt among us, graceless and false."

Thank you David.

Totally agree.
Freedom to choose who and what to read/say is part of an open democratic society

I for one feel mature and intelligent enough to read a full spectrum of articles, even including propaganda if needs be and to be able to form my own views and conclusions.

I personally don't need or want Interest.co.nz to apply any kind of censorship for any reason.

13
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No censorship has been suggested Ralph, only a suggestion that we have a balance of articles.

That said I believe the government should kick out the Confucius Institute unless the NZ government are given the opportunity to open a political office in Beijing which advocates for liberal democracy.

In a free country I have no fear of thoughts.

22
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""Within six months of a presidential election, the Republican Party is stoking the fires of nationalism, keen to shift blame to China for its ravaged healthcare system under the onslaught of COVID-19, tens of thousands of avoidable deaths from the virus, soaring unemployment, and stumbling economy.""
The trouble is the author clearly is an expert and most or maybe everything he says is right but sentences like this sound as if they have been translated straight from a China Propaganda Head Office.
The state of American healthcare has been discussed and criticised for decades - long before China was a serious trading nation.
""when one of the government’s coalition partners is working to take New Zealand back to the 1970s"" is a massive extrapolation from a remark by Winston Peters. If a tepid remark about Taiwan joining WHO had been said by Helen Clarke or Bill English it would have been more significant. Why the sensitivity about a simple matter of fact: the only country to come out of this Covid-19 epidemic with 100% credit is Taiwan.

Sadly, I think the evidence supports Mahon's view of the US on this one. He's also right to single out the Republican party instead of the pig-who-wanted-to-be- President. They are the ones that are allowing the appalling scenes in the US to play out.

But China has a similar problem. What happens at the forefront of their brave new world is truly disturbing.

Like many China-dependent pundits, Mahon starts off with the right message in this piece - making not incorrect statements about the US... but ends up trying to please his masters. That doesn't make the other side in this cold/stupid/ego-driven war right however.

11
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Glad to see (commenters on here anyway) we are still smart enough not to want a Chinese or Russian type system, even in the face of what we are seeing in the States at the moment.
Just need to look and learn from their mistakes before it is too late for us too.
Too much population for the resources, debt, debasement of currency, unproductive bureaucracy, foreign ownership, poor educational outcomes, low quality journalism, partisan politics.. etc etc

I think it's a good article and thank the writer for it. I do think many commenters on this site get emotive and impractical when it comes to the subject of diplomatic relations with China.
Bully they may be, but the enemy so to speak is in our bed. It is also worth noting that as a country they are certainly not all bad, and in the past have achieved things the west have failed to (population growth control for one). We need to come up with a smarter way to change the situation, and it may be by playing a longer game and continuing to be the change we wish to see in the world. Impetuously stamping our feet and throwing our toys achieves nothing. Particularly when we have no military to back up any stance of aggression.

20
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Currency manipulation, to trade imbalance, to trade war etc etc. It looks to be leading to something much worse. China is using its financial muscle to bully smaller nations to get it's own way. Look at Chinas actions vs Aussie recently, and their push into smaller Island nations who now vote for Chinas interests at the UN. We should try to play the middle as both are important markets. That said it would be good to develop other markets to spread our risk from China.

We must protect our sovereignty, and that absolutly starts with not selling our land to foreign interests. Hopefully this is a key topic in the election.

Trade wars lead to currency wars which lead to shooting wars. Period

Exactly. Didnt want to scare the herd.

Don't worry, we're immune

13
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"" not selling our land to foreign interests."" That is one of the good lessons China teaches us.

One could argue that NZ is engaged in currency manipulation at this very moment in time, with the Reserve Bank jawboning the currency down with threats of action, money printing and bond buying.
Sure, benefits include short-term financial stability, while hiding the governments total indebtedness by calling it a liability and asset on the governments balance sheet, but as we are pointing the finger, several more point back at us as the saying goes.....

Whilst I certainly don't want NZ foreign policy to be a disorganised reaction the problem is that we don't have much in common with the Chinese government.

It is good to be cautious, but we should also not forget who our friends are, however imperfect they might be.

22
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What a horribly one sided piece. Frankly, a disgrace.
Plenty of mentions of the USA's aggressive posturing and actions, none of China's.
I want a bit more balance on China on this website.

20
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I agree. Lets leave aside for one moment the authors huge personal exposure and financial need for continued economic dependence between NZ and China, the author fails to read the room entirely. Much like I did proceeding Brexit. I didn't want Brexit to happen and confirmation bias led me to focus, tunnel visioned, on the views that confirmed my desired outcome. It was a life altering moment for me because after the fact, it was painfully obvious how many Britons favoured Brexit. How many were pulling away from globalisaton. I spent several years coming to terms with my mistake, psychologically and financially. I lost a lot of money because of what I didn't want to see.
Mahon may find himself similarly blind sided. Anti-CCP sentiment is building in NZ, not because Kiwi's are following America, but for their own reasons. I have begun monitoring related search terms on google trends. Anti-China (CCP) sentiment has increased in articles and comments in all kinds of places. It has increased in the comments on this website even. Mahon is not looking. It's lazy thinking to pin this on American politics, just as it was lazy thinking on my part, when I dismissed anti-EU sentiment in the UK as xenophobia (its way way more complicated than that). We have an election this year and if the anti-CCP momentum continues to build, we may see some of this played out at the voting booth.

10
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Great comment ginger

Great points.
Just like it is lazy to blame Americans for Trump, given the lack of compelling alternatives put up by the Dems in the last election.
That's not an excuse for Trump. But it does help to explain it all.

There are plenty of people scurrying around, desperately trying to make sense of the world at the moment. Trying to find reassuring data or information that can help lend a sense of normality and predictability in a time of extreme volatility. The more threatening, unpredictable and challenging the environment, the more we cling to the edifice of norms. Trump, Brexit, even the pandemic, they weren't Black Swans, they just represent fairly predictable outcomes to given circumstances. If you have a SARS 1 then a SARS 2 shouldn't be such a big shock, and yet, we are all totally unprepared. Trump, Brexit, SARS-CoV-2 are symptoms, not causes. But we are too wedded to the structures that create the symptoms to make the hard and constructive long term decisions. We are a canny species, but every century or so, we play out our weaknesses and are crippled by that short termism. Not that i'm not exempt. I fall for the same biases as every other hairless ape.

'I fall for the same biases as every other hairless ape.'
Ha ha, me too of course. The challenge is to minimise those biases.
I'd place covid 19 in a slightly different category to Trump and Brexit. It's more like a natural disaster. We knew something like it would come one day (like the next big one in wellington), but were woefully under-prepared - quite shocking, really.
I put it down to much of the west's short-termism, which I blame to a large extent on neo-liberalism.
Generally, East Asia was much better prepared. Yes to a large extent that is down to the experience with SARS Part 1, but I think it's also explained by East Asian attitudes to healthcare more broadly.
My wife, who is Japanese, has long commented on what she views as a really dangerous casualness around GPs and medical specialists in NZ, compared to Japan, where they are much more thorough (my experience as well as hers). One could argue - and I have argued with my wife on this - that Japanese medical specialists are over the top in their caution. But maybe they aren't?
Remember too the almost 'casual racism' that existed around the use of facemasks early in this current crisis?

Is it possible to be ginger and hairless?

One is rarely bald everywhere without great effort.

I don't agree that its lazy to blame Trump on Americans. This is what democracy is all about. You can ascribe more blame on certain Americans (Peter Thiel anyone?) but ultimately people have to stand up and take them on.

Yes. It would be really dumb to take sides in this dispute. It's only going to get worse and would take us down with it.
Yes. The USA is a dawning nightmare, but probably harmless to us unless China turns feral to us because of the connection.
Yes. China will turn agressive to us if we think "wrong thoughts". Worse they are capable of instant and permanent cessation of all trade if we thwart some commercial intention.
Safety demands we reduce trade with China. Hard to do, but continuing our current path is leading to that brick wall at some time.

@ David Chaston. It's a one sided article for sure, but still ok to publish I think.

David echoes comments that have been made many times on this forum, despite the biased comments above. And despite his failing to recognise the CCP's excesses, while blasting Trump's shows an unfortunate failure of balanced journalism. Despite that he his correct, but does not go far enough.

NZ does face some opportunities in what is occuring, and we have clearly been remiss on seeking them (The Taiwanese move to shift it's chip manufacturing to Arizona is one example), however in seeking to take advantage of these opportunities, the COVID situation has taught us that we should at all costs avoid over reliance on any one market, no matter how large or lucrative, for or products. As COVID has taught us, Eco-politics (in this case a pandemic slamming economies the world over at a time when an economic war is brewing between to major powers) is a fragile thing and can change everything overnight.

I just hope our Government has the skills, talent and foresight to ensure the country profits from it all.

China is showing cracks and we should be wary of how exposed we are to the collateral damage. Their economy is starting to falter and they face overwhelming demographic odds with both a rapidly declining and aging population on the horizon. Not to mention their belligerent behavior towards neighboring countries which could spill into armed conflict.

This author makes no mention of China's aggressive diplomatic posturing of late. Any disagreement is met with threats and coercion which is hardly conducive of a stable and prosperous trading partner. Pro-America MPs in Australia are now being targeted by their so called "wolf-warriors" and CCP officials a-like – a blatant attack on Australia's democratic process. Not to mention their appalling human rights abuses. Millions of minorities locked up in concentration camps is not something we can just gloss over.

This idea of playing both sides is naive. Our traditional allies will expect our support and if we fail to provide that then we have picked a side all the same.

My feeling is we are in no position to lead, but cannot forget the free western democracies with whom we have so much in common.

Hardly a surprise dude. It was only ever a matter of time.

The numbers are not dramatic at all Ben. Meanwhile we are speaking of China.

That article is so lacking in data you could write whatever you want about it. they don't even say what the measure they used is.. is it the corelogic house price index? is it median prices? Either way, the graph shows the previous two may figures were -0.5% and -0.4%.. so its pretty much par for the course for the month at -0.5%.

In some ways this is a refreshing article as it suggests NZ should not be unduly influenced by our traditional partners that have taken our cooperation for granted in the past, with relatively little in return.

Like others here, I agree this article is biased towards China, and as it lacks any political criticism, it is hard to take it at face value.

But what I find harder to accept is the idea that politics and business are anything other than one and the same thing. Or to put that another way, how are they distinct?

It depends on which end of the spectrum you are... free liberal capitalism.... central planned command socialism.

I also wonder, how many punters here are integral in there disgust towards the Chinese system. For example, do they boycott the purchase of Chinese made goods that directly support the evil regime?

You don't have to be at either end of any spectrum, you do not need to be extreme.

Yeah I agree. Regardless of one's political views we are all bound up in the state of play. For instance, it's not possible to practice being anti-capitalist in a completely capitalist system.

So in one sense this is another round of what in the 19th Century was called the 'great game' and in another sense, there's a heck of a lot of calls elsewhere to address the systemic failures of an economics which rewards so few at the expense of so many.

So when these old names lose meaning, history teaches us that the forment of populism does not always lead to desirable outcomes. The desire for Brexit or despot Trump came from the feelings of disenfranchised people - that's the real enemy here - not just balancing the entangled belligerence of two giants, but ensuring that both internally and externally this thing we call 'commerce' doesn't lead to populist impulses motivated by grievances.

Well said.

I can see why you're a JP

"Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies" Groucho Marx.

"It is not in the nature of politics that the best men should be elected. The best men do not want to govern their fellowmen." George MacDonald.

"Any American who is prepared to run for president should automatically, by definition, be disqualified from ever doing so" Gore Vidal.

Great quotes!
Also reason why Covid has been so disastrous. Headless chicken fear coupled with politicians trying to make the best mileage from it (political damage control) rather than look to do the best for all.

I hope you are not trying to tell us how belligerent the Chinese govt isn't.
Not keen to throw a hat into the ring with either of these superpowers, and certainly not keen to kowtow to either of them.
I really think this article has glossed over a lot of stuff. Makes it difficult to take it seriously, tbh

Our neutral strategy will come increasingly difficult to maintain and we'll be forced to kowtow sooner or later. Guy Traffords excellent article earlier today lays out what happened to NZ when the UK pulled the plug on us. Beijing recently demonstrated its willingness to impose sweeping sanctions against Australia's primary products industry when displeased about that country's foreign policy. It's only a matter of time before NZ is on the receiving end of the same intimidation. Trade and foreign policy are interdependently linked in chinas mind and attempting to separate them in debates is futile.

Then I say out

OK. Please begin assembling your list of which hospitals and schools we'll be forced to close.

'Unless New Zealand is firm in measuring its participation in the Five Eyes club, it will erode the independence it has so long striven to maintain' ... the sinister threat in this sentence is clear - 'measuring' means 'if you persist this will cost you if we so choose'. Mahon accurately calls out Washingtons bellicose aggression towards China on trade but his silence on Beijing's commercial strong arming invites us to believe the thuggishness is one sided. He enigmatically recommends NZ 'approaches (post C19) china in a 'new way' with 'greater unity'. What this coded language means one can only guess but the overall theme is clear - NZ needs to change its existing stance towards china.

So we must accept not only currency and trade war tactics, we must accept a biowar tactic as well. Other than refusing is free trade the US has done none of those things.

The allegation that the wuhan virus was deliberately created and released by the CCP remains an unfounded conspiracy allegation. Agent orange victims in Vietnam would disagree that the US has never deployed bio weapons. The US engages in multiple trade war mechanisms such as protection tariffs and subsidies.

Publishing David Mahons self interested, one sided opinions reflects badly on this website.

I disagree, if you don't like it you don't have to read it.

I'd agree with you if it was clearly marked as an advertorial.

That would be prejudging it ;)

One sided advocacy is a vital element of debate.

The question is whether there is an equally well presented counter arguement. There is no evidence to suggest this is the case

Sort of like a courtroom with Dave 'the hangman' Chaston as judge ?

I love the analogy :)

NZ to act on its own interest : Just follow China to be Rock Star Economy and support China : Dictator regime.

Money..Money.....Money.....Money......

Trump is the most obvious vocal critic of China and influence on public opinion – and I see that influence on perceptions here on interest.co.
I find Trump’s about face on China amazing. After the trade wars of last year, at the start of the year Trump was “great friends” with Xi Jinping and had admiration for China. He now taps into xenophobia anti-China fears simply as a scapegoat for the mismanaged US economy and consequent slip in the polls. Simply a cheap and obvious tactic.
Let’s face it; Trump is greatest distorter the truth – one who has made over 16,000 false or misleading claims including ridiculous claims over hydroxychloroquine, disinfectant. His statements regarding China are often baseless, including the unproved assertion and contrary to scientific evidence that the virus was deliberately manufactured in a Wuhan lab.
There is a strong and exaggerated perception of China - and the most significant person fueling that is from a man that can’t be trusted for honesty.

The peoples of Hong Kong and Taiwan wouldn't consider their fears about chinas intention towards their countries to be 'exaggerated' or 'baseless'.

True. Key thing is what do you want to do about it - if anything

Well you could always wave a metaphorical plastic shopping bag about in front of a Tiananmen Square tank and see where that gets you. Crushed, along with 10,000 fellow protesters, no doubt.

So that would be a big fat nothing.
I wonder what if people are willing to go through the hard yards of decoupling from the primary source of economic growth for this country (exports and imports; along with most other nations)...

That would be a big fat no. And neither should we. We should energetically engage in trade with China but pay far more than the present lip service to market diversification. It was fascinating to observe the way NZ primary product exporters quickly found alternative markets when china locked down.

Options...subdigation by China, or a US Presidential comedy show....?

US presidential clown, that choice would at least give us something to laugh at.

The third to last paragraph on investment in good business is the type of idea I'd like to hear more about. Obviously defining "good" being the challenging part. Shame that the Author seems to have drunk the Beijing kool aid.

A slightly weird segue into advocacy of a central government investment vehicle to own and direct specific key export industries. No mention of a proposal to name it the people's striving together sunshine collective and a supporting series of 5 year plans but they could be in a follow up article entitled 'let a thousand silver ferns bloom'.

Well that was all very interesting.
I find it laughable when people want to go on about China's human rights, as if America is a choir boy group. The atrocities the world has had to watch, endure or even join in over the decades are countless.
I didn't see those calling for any ballance mention such things.
I'm glad David Chaston interjected as he did, thanks David.
I think the basic idea here is for NZ to carefully weigh up the most navigable path, and yet, because of politics, this is going to be very difficult. Not honouring our 5 eyes obligations could be very costly, and it's probably something we're going to be confronted with before we can progress on any other path.
The system simply doesn't work. Capitalism is broken, and democracy as we have known it has come up well short. I most certainly do not want to be communist, or Republican, or Russian, or Asian, or Australian, or any other thing out there. I want to be Kiwi, and I think with the way the world is right now, we have a great opportunity to redefine, or rather, clearly define what that is.

10
up

How do you know that some of us haven't cried out at what the US and its allies have done in the past?
Bush and Blair in Iraq etc.Debacle, that.
We could also go back to the French in the 80s, South Africa etc.
But many of us think China is one of the worst right now and we will rightly criticize. Just like we have done in the past with the yanks, French, South Africans etc

Good call Fritz, even though you ask how would I know? Tbh, I've been reading your own comments for sometime now, and never read anything critical of American aggression, wars, regime change, use of sanctions, etc etc.
Perhaps I just missed them. I would have thought you staunchly anti-Chinese, so perhaps I am wrong.
Personally I appreciate seeing the differing viewpoints, and no matter how hard I may find it, accepting those viewpoints, and trying to see someway that common ground as Nz'ers can be found.
I accept that ultimately it is probably a futile exercise, yet a thorough discussion can best be had between those with differing viewpoints.
NZ is a small nation, in a big world. I'm sure at some level we want very much the same things for our children and grandchildren, if not perhaps even for ourselves. However, I think pointing to China as the "one of the worst right now", couldn't be further from the truth.
Many nations would have to do many terrible things, to many other nations, over a long period of time, before they got anywhere near the worst category.
I'm confident you'll disagree, yet I sure enjoyed the opportunity to respond directly to you. Have a good evening Fritz.

Thanks. Very fair of you
For what it's worth, I think Trump is an idiot (although some of his rhetoric on China in my view is very justified). Ironically, though the USA under Trump is perhaps doing less dodgy stuff internationally than in a long time.
Yes I have been far more critical of China than the USA. Because, at this point in time, that is how I see it with their treatment of minority groups in particular being quite shameful.
Trump is halfway there in terms of his stand on Mexicans, mind you.
I also think China have handled covid-19 appallingly, especially in its early phase.

Here is an interesting perspective on China's naughtiness in Hong Kong:
https://www.japantimes.co.jp/opinion/2020/06/01/commentary/far-two-strik...

Thanks Fritz. Read the article, apart from the fact that it was published in the Japan times, where i would expect nothing but a negative article about the CCP actions in Hong Kong, I see the point, and if even Tokyo want to comment further, then it's certainly not my place. Hong Kong being returned to the mainland was always a nightmare, and I think that China in particular will not forget how it was used when western nations sailed their gunboats in to lay down the law.
For my money, Hong Kong was always going to be used as a soft underbelly to antagonize the mainland. Do you honestly believe the western powers have not been operating in Hong Kong to bring about such disruptions? I am not saying I agree with what's happened, yet in the terms of our earlier discussion, is this the worst? When you have the British coming out and saying this is anti democratic and illegal, all I think about is that today, Britain is supplying arms and jets and pilots to the Saudis to bomb Yemen, not talk about human rights, not suggest to the Saudis that maybe we could talk about this. No, they are continuing, everyday, to bomb Yemen. It's people are struggling through all manner of sanctions, like Iraqis, they're children no longer have schools to go to, their basic municipal supplies, like water, no longer work, it's hospitals cannot gain access to medical supplies, so on and so on.
Britain do this, not because of some moral standard, not to defend democracy, or human rights, they do it for profit, and there is no public domain that it is being debated in, and there are no western interests in MSM drawing this to Jo publics attention. So, yes, I think the discussion about Hong Kong could be a long one, yet compared to the likes of Yemen, Iraq, Afghanistan, Iran and others, I think an awful lot of downright bigotry goes on by leading western powers, who lost the right to the moral high ground where they can preach legalities, ethics and human injustices. Has China bombed anyone? No. Has China invaded any countries outright? No. Has China used external forces, to bomb, and/or, used sanctions to bring about a change in political leadership? No.
I think there are many other problems that are at the top of the list, where on a daily basis, our apparent allies are causing humanitarian disasters, and we should stop being led by the media fed to us by those that perpetrate such matters, and try to get us to look elsewhere.
Long, I apologise, and do appreciate the Japan times article, I understand that there is serious cause for concern in Hong Kong. The West however, on a daily basis, for decades, is guilty of far far worse, and I truly think we as a public should focus our attention on such real atrocities. Until we do, the West is capable only of dishing out double standards at best. Have a good day Fritz.

Your 'avin a Lark!

Could be.

What the Western World went through in the second half of the twentieth century will be considered by future historians as an unprecedented, and probably unrepeatable,"Golden Age", which baby-boomers like myself feel fortunate to have been a part of.
What is happening now is just the world 'reverting to type'. Empires on the make (China), other empires in decline (USA and Britain). The normal state of the world for as far back as history takes us has been a more or less constant state of feuding between countries.
Probably, the best stance for NZ to take would be to keep its head down politically and to let it be known to all other countries that we wish to be neutral and unaligned in our foreign policy.
And, incidentally, I think that NZ should model itself on Denmark as a society incorporating both socialism and capitalism and without the potentially destructive element of the huge disparity of wealth that we see in the USA.

The problem with your preferred politically neutral stance for NZ is contained in Mahon's article, ie the Chinese will likely become more assertive in requiring its trading partners to pick sides. We can abstain on issues such as Beijing restricting freedom in HK for only so long. China recently took severe punitive action against Australian meat exports because it disapproved of its political stance on HK. We are now effectively muzzled from taking a moral stance on Beijing's next foreign policy escalation. Such as an annexation of Taiwan.

Hi Middleman, I refer my reply to Fritz.
Pretty much, I think the western powers are able to turn a blind eye whenever they want. If we, as westerners want causes to be upset about, we don't have to look far. Truth is, the west lives off it's war machine, and that is a massive issue to deal with before any great strides can be made toward real diplomacy, and real peace. I think the world at large is sick of this, and I think NZ should be mindful of the fact it is part of the greater western alliance. We went nuclear free, we made a massive stand, on the global stage, and I think the world in someway remembers this. We have potentially a unique role in the global future, but the likes of America and Britain have more than enough henchmen without need of us. If we choose to voice our disdain about events in Hong Kong, fine. YET first we must voice our outrage at truly horrific events which are perpetrated every day by our allies. That way, we might deserve to be heard. That way, we may be heard by a far wider audience than those that would simply have us do their bidding.
Well, maybe.

The problem is the Limits to Growth (sorry to harp on). China came to the party too late, and India way too late. There isn't enough planet left, for China to take its 1.4 billion to the level 330 million Americans got to (consuming 25% of the planetary resources on their own even as we brought the planet to it's knees and have hit the Peak in Limits terms). So the CCP has internal problems which are not solvable.

Belt and Road is the same as the Greater Co-Prosperity Sphere of yesteryear, except there is a lot less planet left now and a lot more bidding for it. We are looking at a scrap over 'what's left'; how we handle that politically is the only question in town. People peddling self-interest in one tiny angle of one tiny trade in one tiny moment in history - doesn't rate.

And on climate and the biosphere, Kim Stanley Robinson has it right in that this golden age will be termed "The Great Dithering".

This article is liberal discourse 101: identify your own interests with those of the majority and hope they will get on your side.

Mahon is encouraging NZ to continue to grow business with China, and suggests some of the govt funds can be consolidated into a kind of Sovereign Wealth Fund to invest in NZ companies and maybe partners to create growth. Makes sense. However its up to us where we focus, clearly, NZ is in deep with China, and most balanced commentators including past PM's ( not John Key, he is crazy for China and Xi) suggest diversification! 2 things then
1. Consider the fund idea (but don't let NZ agencies in charge of this, or disaster) example TEMASEK Singapore
2. Diversity, focus on South East Asia for example, NZ has miles of room to grow in these markets.

Yep, he is right the American situation is a nightmare - but the article doesn't acknowledge the situation in the US can be changed through democratic elections and the legal system can restrain the worse excesses. The bullying by the Chinese leadership against Uighurs, HK, in the South China Sea etc is not subject to any legal or democratic restraining processes. Sure, lets not act like Trump (Agent Orange) but let us be cautious and stand up in the international arena for the rule of law, democracy and basic human rights and to any bullying of us.

And lets not forget the Chinese actions in NZ - I worry that the National party is too keen to cosy up to China.

https://www.newsroom.co.nz/2019/01/09/280568/follow-the-money-and-the-in...