New Zealand state’s quandary in the Asia-Pacific

Jared Phillips (reprinted from socialistvoice.org.nz)

In May, the US government brought criminal charges against five Chinese military officials for hacking into the systems of US energy and steel companies. They stole trade secrets and conducted economic espionage.

The Chinese government retaliated by urging domestic banks to remove high-end servers made by IBM and replace them with locally-made servers. Technology companies operating in China are now being vetted and state-owned companies have been instructed to cut ties with US consulting firms. These developments are examples of increased tensions between the US and China.

US-China tensions dominate region
The Asia-Pacific region is one of the main arenas where US-China tensions play out. A new order is developing in East Asia after 40 years of relative stability. In many ways the world is moving from being ‘unipolar’ to ‘bipolar’ for the first time since the fall of the USSR in 1991.

China has seen huge economic growth over the past 30 years. It experienced 10% annual growth rates from 1985 to 2011. While China’s per capita GDP is far behind the US, its overall GDP is gaining ground. This gives China a significant amount of strategic and political weight on the world stage.
At the same time the position of the US in East Asia is in decline. Between 2000 and 2012, the US’s share of trade to East Asia fell from 19.5% to 9.5%. China’s share rose from 10% to 20% in the same period. In 2009 US President Obama announced the “Pivot to Asia” foreign policy, an attempt to check China’s emergence as a challenger to US dominance in the region.

Increased US-New Zealand military cooperation
In mid-2012 the NZ and US governments signed the Washington Declaration which set out to achieve regular high-level dialogue and enhanced cooperation between the two nations. In 2013 there was a meeting of Pacific Army Chiefs which was co-chaired by New Zealand and the US. Following this meeting the NZ Defence Minister Jonathan Coleman and US Secretary of Defence Chuck Hagel made a joint press release announcing further military cooperation.
Coleman said “Our defence relationship with the US is in great shape, and provides a strong platform for working closely together in the future”. In many ways US-NZ military relations are the strongest since the ANZUS relationship ended in 1984.

The closer co-operation is not merely a result of a set of National Party policies. It stems from the needs of New Zealand business interests. New Zealand plays the role of a mini-imperialist force in the region attached to the US.

The New Zealand government began patching up relations with the US in the early 2000s. The Labour Party sought to straddle the US-Franco tensions but ultimately sided with US imperialism by making commitments to the so-called “War on Terror” in Afghanistan and Iraq. Labour’s election adverts in 2002 sought to promote this relationship with images of then US Secretary of State Colin Powell with a voice-over message saying that we are “very, very good friends”.

Up until this year National has civilianised military roles and cut military spending. However for 2014 National has allocated an increase of $100 million to military spending. This is part of an additional $535 million being allocated over the next four years, and has essentially been a restructure based on the needs of the US in the Asia-Pacific region.

NZ and China’s strong economic links
The world economic crisis has not had such a dramatic effect on New Zealand as it has on other regions. This is because New Zealand’s economic integration is strongest with Australia and China, whose economies remained relatively stable for the first years of the crisis.

There are more New Zealand companies with overseas production engagements in China than any other country. In 2013 China became New Zealand’s biggest export destination. This was the first time in decades that the biggest destination was not Australia. New Zealand’s next strongest links are with Australia, and the Australian economy is also intimately linked with China.

The Chinese economy has grown by around 7.5% over the last year. This is a slowdown on the 10% growth China had experienced for decades before the crisis began to take effect. With the slowdown, Chinese corporate debt has increased by up to 260% in the period between 2008 and 2013. Local government debt has also increased.

China is facing a crisis of overcapacity and its main export markets are struggling with low growth. This further drives China’s need to conquer new markets and exploit cheap resources in the region.

TPPA an attempt to strengthen US influence
The Trans Pacific Partnership Agreement (TPPA) did not initially include the US but the US joined it and has sought to dominate the negotiations. From the US Government’s perspective, the agreement is an attempt to counter China’s emergence as a power in the region.

The agreement would serve the interests of big corporations and empower them against states. It would establish trade tribunals to regulate disputes between companies and states. This would equate to bringing neo-liberal economic policies into law. A corporation could sue a state for introducing laws that undermine profits and violate the TPPA. Such measures would hamper the ability of working people to fight for reforms.

In the negotiations the US have often used heavy-handed tactics and this has caused other countries to hesitate to sign. The National government is currently trying to turn its own stalling to an advantage by saying it will not sign without the support of the population. However National has engaged undemocratically in the negotiations and the Labour Party has not opposed them. The truth is that National is currently recoiling because aspects of the US’s corporate agenda are at odds with aspects of New Zealand’s corporate agenda. This is just one of the dilemmas NZ big business faces.

Pacific Islands
While the capitalist class is collaborating in order to advance its interests, the left and workers’ movements must also seek to build links between working people and the poor in the region. The Pacific Islands will be of particular importance.

The fight against climate change in New Zealand and other advanced economies must be intensified to help prevent further climate change displacement of the people on these islands. For those who have already been forced to flee, we must fight for their rights as refugees.

In some Pacific nations up to half the population rely on money sent from family members in New Zealand, Australia, and elsewhere. It is imperative that socialists and the workers’ movement play a leading role supporting full equal rights for Pacific workers.

Future struggle
The situation in the Asia Pacific region is becoming more fraught. While the New Zealand ruling class has hedged its bets with US imperialism, the economy is also highly dependent the US’s main imperialist rival, China. On the face of it, New Zealand’s domestic situation appears relatively stable. However, an analysis of the regional situation reveals that there is much scope for destabilisation in the years ahead.

It is clear that economic and political rivalries will continue to sharpen in this part of the world. The only way this can be resolved in a positive way is if working people throughout the region unite their struggles and fight for an alternative to the system that pits nations and people against each other.
While democracy struggles in places like Fiji and Tonga must be supported, we should argue that only by transforming society along socialist lines will we really be able to address the issues ordinary people face. A socialist federation of the region would promote cooperation and the democratic sharing of resources. This is the alternative to oppression and imperialist aggression.

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