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China or America? No need to decide just yet

COMMENT Both New Zealand and Australia's dependence on trade by sea necessitates a deeper interaction in Pacific affairs than their isolated geography might predict.

Nathan Smith
Thu, 18 Apr 2013


With all the fuss surrounding the GCSB it was easy to forget Prime Minister John Key returned to New Zealand after his recent trip to China.

Reports suggest tourism and increased bilateral trade were at the top of his agenda. Both will be crucial for a long-term healthy Sino-Kiwi relationship, and both are expected to grow appreciably.

And yet, across the Tasman, Australian Prime Minister Julia Gillard also visited China in April, returning with a markedly different story.

While her delegation did discuss increased economic ties, what sets her visit apart from Mr Key’s is the announcement of a new “strategic partnership” with China.

This is more military in nature than economic, which should not surprise close Asia-Pacific observers.

Because given Australia’s large economy, strong armed forces and its strategically important geographical location, it makes sense that Canberra would find closer military ties with Beijing attractive, and vice-versa.

Ms Gillard suggested a three-way joint military exercise schedule between China, America and Australia, saying: “I am committed to a relationship which goes well beyond the economy”. It is a position Washington will surely lament.

China continues to play an important role in supporting global economic growth and the most significant development in Asia is likely to remain the ascendancy of new credit channels to the Asian giant.

Beijing is reaching out politically and economically to Asia-Pacific countries, some of which are only too happy to attract the deep pockets of Chinese investors.

Different Attractions

The nuanced histories of some Pacific nations are particularly open to the Chinese charm offensive, rather than one from the United States. 

Yet because China is still a unique mix of democratic economics and top-down authoritarianism, the political histories of Australia and New Zealand could have some built-in limitations to further bilateral engagement with China.

For instance, New Zealand’s political relationship with the US is only slightly warmer than in past decades. Both countries share cultural characteristics and political traditions, while those of China are new and fresh for Kiwis and might still take some getting used to.

Australia is also culturally closer to the US. But it is nearer to the pulsing Chinese hub in the heart of Asia. So Canberra’s foreign policy concentrates on the changing dynamics in South and East Asia to stay ahead.

And both country’s dependence on trade by sea necessitates a deeper interaction in Pacific affairs than their isolated geography might suggest.

In regards to the American ‘pivot’ to the Asia-Pacific, officials in China, perhaps correctly, look at the new and refurbished relationships emerging between Washington and many Asia-Pacific nations and nervously suspect a containment strategy is in progress.

It appears to them that their push to secure sea lanes for safe trade and for resources they desperately need to import is being countered by an aggressive Washington. The US, late to the game in the region, has moved to counter Chinese growth rather than work with it.

Americans see a rising China as a potential threat to their interests and to Washington’s long-standing domination over Asia-Pacific’s crucial trade routes, fuelling a race for influence which is perhaps reminiscent of Cold War containment geopolitics.

Caught in the middle

Canberra finds itself juggling between China’s proximate rising power and the US as a more distant but stronger one. One is a massive trading partner, while the other is the world’s pre-eminent military power. The choice is complicated.

As professor of the strategic studies at the Australian National University Hugh White pointed out recently, Australia has become a political prize to be won by either Beijing or Washington, but not both.

In a smaller, but still significant, way New Zealand is also a trophy to be won in this zero-sum game.  

As a result, Wellington and Canberra are caught in the middle of a much larger tugging match. 

The question of siding with either American or Chinese influence was once like answering the first few prosaic queries in Who Wants To Be A Millionaire. Now, each power has good things to offer the Pacific and the choice is more intricate.

And yet perhaps, as shown in Ms Gillard’s recent China visit, there is still significant room to manoeuvre between the two powers for maximum benefit. Nothing needs to be decided immediately.

Although neither Beijing or Washington will be happy, Canberra can afford to play them off against each other for a while longer.

Mr Key also showed that the brewing competition between China and the US can effectively be bypassed when discussing economic co-operation.

There most certainly are security worries in the Asia Pacific, but many are hypothetical at best and camouflage the true potential of Australia and New Zealand to trade healthily with both powers, rather than one of them.

Nathan Smith has a Bachelor of Communications in Journalism from Massey University and has studied international relations and conflict.

Nathan Smith
Thu, 18 Apr 2013
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China or America? No need to decide just yet