Big China, weaker America: New Zealand’s options

New Zealand has been relying upon an equilibrium of power between the United States and China to pursue its interests in Asia. But under Donald Trump the US’s role in Asia’s balance is coming undone. 

Although Washington remains the world’s most formidable military power, and has an unparalleled set of security alliances in Asia, Trump has raised real uncertainties about how the US will use these assets in a crisis. 

Yet the problems are more apparent in the economic arena. The vibrant US economy remains important for our region’s dynamism. But US withdrawal from what is now the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) distanced Washington from the architecture guiding the region’s integration. Trump has only increased US isolation by reverting to his America First trade stance at the Asia-Pacific Economic Cooperation (APEC) summit in Da Nang. 

This doesn’t just matter to New Zealand because of the centrality of the commercial agenda to our regional engagement. It also matters because, like so many of our partners in the region, we want both great powers to be committed partners for the region’s economic and security future. 

One of the unwritten rules of New Zealand’s recent foreign policy is that we can be comfortable with a rising China because the US has been there to reassure the region. That reassurance is eroding, and it is not easy for anyone in the region to find suitable alternatives. 

The new government will need to invest a fair bit of its time into thinking about the bilateral relationships that might require greater focus. Principal among these is that with Australia.

New Zealand’s default has always been to make the most of multilateral diplomacy. We will continue to value our participation in regional forums led by the Association of Southeast Asian Nations, including the East Asia Summit.

It’s in our interests to encourage economic groupings such as APEC and the CPTPP to appeal to as wide a membership as possible. These groups caught New Zealand’s attention during Jacinda Ardern’s first regional visit as Prime Minister. But they offer little protection against the whims of the great powers.

The new government will need to invest a fair bit of its time into thinking about the bilateral relationships that might require greater focus. Principal among these is that with Australia. That means we can’t allow disagreements over refugees to get in the way of our mutual long-term interests in collaboration. In Southeast Asia, Singapore continues to grow as our most important point of contact. But as a fellow small power, Singapore’s influence is finite. 

Our relations with Japan have been building nicely, but New Zealand needs to make sure we don’t get dragged into Tokyo’s competition with Beijing. Vietnam is an insightful reader of regional geopolitics, but will only be a growing partner if it is in Hanoi’s single-minded interest. South Korea is a fellow democracy and market economy, but is often focused on its immediate peninsular neighbourhood.

There aren’t too many more options. Under Joko Widodo, Indonesia has become more inward looking. Canada under Justin Trudeau has a similar world outlook to New Zealand, but has little purchase in our region. India has not worked out how to be consistently engaged in Asia-Pacific affairs. And the version of Indo-Pacific cooperation hinted at recently by Trump is best avoided by New Zealand. This is an idea promoted by Japanese Prime Minister Shinzo Abe that seeks to unite Asia’s democracies against China. That's not the way Wellington wants the region to be organised.  

To escape some of the risks of a less balanced Asia-Pacific, New Zealand might favour a more global approach. But that would only be a strong option if the United Nations was strong and the European Union in fine fettle. And there are plenty of problems beyond Asia, including in the Middle East and Africa, that would quickly drain our energies. Withdrawing into a South Pacific mindset might appeal to Labour traditions. But given the importance of Asia to New Zealand’s future, that isn’t an option either. 

If the US wants to come out of isolation, reverse protectionism, endorse climate change cooperation and see multilateralism in a positive light, it will find it still has seats at many tables.

We still might take some comfort that the region’s future trajectory is much more complex than a mix of China’s strength and US weakness. Xi Jinping is the most dominant Chinese leader since Mao Zedong. But without painful reforms, China’s growth rates will taper off. And the more Xi insists on the party’s supremacy, the less appealing that political model will be in countries that value freedom. China’s leaders will also face temptations to strong-arm the region as their country’s economic power turns into diplomatic and military influence.

In the meantime, New Zealand won’t be the only country hoping Trump’s presidency will be a single-term affair. Four years is still long enough for immense damage to be done to the US’s international standing and to the bureaucratic systems in Washington that sustain it. But by 2021 at least some of that damage may be reversible. If the US wants to come out of isolation, reverse protectionism, endorse climate change cooperation and see multilateralism in a positive light, it will find it still has seats at many tables.

Between now and then, we have to have our wits about us. New Zealand can’t rule out the possibility that what has been started by Trump will become an ongoing feature of US diplomacy. Despite its limited appeal, China’s sphere of influence in Asia will grow. Fewer of our partners in the region will believe they can bank on a balance between these two powers. Their appetite for taking on the region’s sensitive issues will diminish as they accommodate themselves to Beijing’s increasing claims to leadership. 

What it means for New Zealand to have an independent foreign policy will have to change in those circumstances. The Ardern government could end up facing the biggest conundrums for New Zealand diplomacy since Britain’s withdrawal from Asia and commitment to the European project half a century ago.

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