A few weeks ago, the New Zealand media gave some coverage to the spectacle of the US President and the Prime Ministers of Australia and the UK signing an agreement whereby Australia will buy eight nuclear-powered submarines over the next two decades at a cost of some $400 billion, confirmation of the so-called AUKUS treaty between the three countries.
Reactions in Australia were varied, though there was no push-back from the Opposition Liberal Party because the AUKUS deal had first been agreed while that party was in power. However, the former Labor Prime Minister, Paul Keating, described the treaty as the worst decision Australia had made in a century.
Reactions in New Zealand were varied: some expressed concern that New Zealand was not part of a deal with our traditional security partners, some were pleased that we were not being asked to pony up any financial contribution to the deal, and a few were worried that the deal would increase the risk of military conflict with China, now by far New Zealand’s largest trading partner.
Any hope that we might quietly sit out this emerging tension between our traditional security partner and our largest market, unnoticed in the South Pacific, was quickly quashed when the US Government sent Kurt Campbell to Wellington to have a “deep discussion” about increasing NZ-US defence arrangements, including how we might become involved in AUKUS.
His visit reminded me that the same Kurt Campbell, talking to Audrey Young (at that time the Political Editor of the New Zealand Herald) just over 10 years ago in December 2012, stated that “We do not want countries to feel that they need to choose [between the US and China]: we want countries that have both a strong relationship with China and a strong relationship with the United States…. Not only do we encourage strong dialogue and engagement, for instance between New Zealand and China, we are counting on it.”
The world has changed greatly over the ensuing decade.
Our problem is not in any sense unique. More than 100 countries have China as their main trading partner and many of those same countries have been traditionally allied with the United States. Even the US has a major economic relationship with China, through both trade and investment.
What we are seeing play out is what Harvard University History professor Graham Allison foreshadowed in his 2017 book Destined for war: can America and China escape Thucydides’s trap? In that book, Allison looked at the history of the last 500 years and found 16 cases where a dominant Power had been challenged by a rising Power. He found that in 12 of those 16 cases, war had been the result, and discussed the likelihood that the US and China could avoid a future war.
Looking back over the last two centuries of Chinese history, we can see that China was humiliated by a succession of European Powers in the nineteenth century, starting with the United Kingdom’s foisting opium on China in 1840; and by Japan in the twentieth century. It is not hard for the Government of China to instill in Chinese people a determination not to be humiliated by the United States in the twenty-first century.
The US began to throw its considerable weight around exactly 200 years ago, in 1823, when it proclaimed that in future the Western Hemisphere – North and South America – would effectively be an American sphere of influence: Europe was warned to keep its sticky fingers off.
By the end of the First World War in 1918, the United States was the dominant world Power. Challenged by the Soviet Union for four decades after the Second World War, the dissolution of the Soviet Union in the late eighties and early nineties left the US again in a dominant position. It was again a unipolar world.
Today, Russia – the heir to the Soviet Union – is quite small economically but must still be taken seriously, as is the case for any country with well in excess of 1,000 nuclear weapons.
But the serious challenge to American dominance of the international stage is now China. Measured on the basis of official exchange rates, the Chinese economy is still a little smaller than the American, but measured by what economists call Purchasing Power Parity exchange rates, the Chinese economy is already somewhat larger than the American economy. Given that China’s population is some four times that of the US, it is highly likely that China’s economy will in due course substantially exceed America’s economy in total size. Indeed, if Chinese living standards reach only half those in the United States, the Chinese economy would be double the size of the US economy, with all that that implies in terms of the political weight that China could throw around.
All of a sudden, the US has become greatly preoccupied with what they see as the Chinese challenge to American dominance. All of a sudden, American companies are banned from selling a range of high-tech gear to China. All of a sudden, both parties in the US Congress are preoccupied with the ownership of Tik Tok, even though that company’s data is stored on computers in Texas operated by Oracle. All of a sudden, the US is paying great attention to the wishes of small countries in the Pacific. All of a sudden, the US negotiates for four additional bases in the Philippines. Even though US military expenditure is roughly three times that of China, and the US has hundreds of overseas bases compared with less than 10 owned by China – all but one of those on man-made islands in the South China Sea – the US evidently feels its total dominance is threatened.
Should New Zealand join America’s push-back against China? I lived for five years in the US, and have visited countless times. I have many good American friends and love spending time in the US.
But looking back over the last half century, it is hard to avoid being cynical about American military adventures. Vietnam was a disaster – for America and Vietnam, and though that war was portrayed as a fight against communism, Vietnam is now America’s ally, and still a communist country. The attack on Iraq on the pretext that Saddam Hussein had nuclear weapons cost America (and others) large amounts of treasure and many lives, to say nothing of the Iraqi lives lost and the chaos left in its wake. The war in Afghanistan ended after two decades of death and destruction with the Taliban and their appalling policies back in control.
So in my view New Zealand should at all costs avoid getting drawn into an American fight against China.
More than that: we should do our utmost to talk the US back from its present confrontation with China.
I have never forgotten a discussion in the National Party caucus in 2003 when Bill English was still Leader of the party. The issue on the agenda was what our position was vis-à-vis the US invasion of Iraq. The Helen Clark Labour Government had made it clear that her Government would not be supporting the invasion unless it was sanctioned by the United Nations Security Council. When the National Party caucus discussed our attitude, only Maurice Williamson argued that we should not support the invasion. Maurice said that there was nobody in the caucus more pro-American than he was, but that the invasion of Iraq was a ghastly mistake which America would come to regret. And that as a result we would be doing America a favour by strongly opposing the invasion. He was right.
We should ask the Americans whether they would be willing to accept the presence of Chinese military forces in Central America or Mexico; and if the answer to that is that they would not be willing to tolerate that (as the Monroe Doctrine implies), we should then ask why the US expects China to be relaxed about the presence of US forces in Japan, South Korea, Guam and the Philippines.
In current circumstances, New Zealand should make it clear that we want no part of AUKUS or any other security arrangement clearly targeted at China, and that the US should accept that it now lives in a multi-polar world.
I’m heartened that something like that view appears to be echoed on both sides of New Zealand politics. Former Labour Prime Minister Helen Clark is on the record arguing that “New Zealand interests do not lie in being associated with AUKUS” and that such an “association would be damaging to our independent foreign policy”. Former National Prime Minister Jim Bolger criticized the Australian submarine buy as “beyond comprehension” because of the cost and the damage to peace in the Pacific region. The National Party’s current Foreign Affairs spokesman is quoted by Bryce Edwards in his Political Roundup of 24 March as being “strongly critical” of AUKUS, and “bad for New Zealand’s security”.
The road ahead is full of challenges.
26 March 2023
Disclosure: I lived for five years in Washington DC; for a decade ran an investment bank partly owned by one of America’s largest banks; have been the guest of the State Department on a goodwill tour of the US; and have visited the US almost every year over the last six decades, most recently in January 2020. I have visited China 15 times since my first visit there in 1986, meeting with Chinese leaders in both government and central bank. My last visit was in April 2019. I have been chairman of the New Zealand subsidiary of the Industrial and Commercial Bank of China for the last nine years.