Chinese economic crisis harms New Zealand


Long before China became a by word for foreign takeover, I had what I considered valid reasons for not trusting the economic relations between New Zealand and China. As the depth of the relations have grown my distrust and sense of unease has followed a largely linear climb.

I will be clear. I am not anti-Chinese. China is a proud and just sovereign nation that has contributed immensely to the world. It has challenges no other country in the world has in terms of sustainable population growth and managing its economy. It is an environmentally, socially and economically diverse nation. I have the pleasure of working with a nice temp from Coverstaff at the moment from Beijing.

However, it has a form of Government, that aside from being quite corrupt and about as transparent as mud, is in some respects waging economic imperialism on nations that it tries to befriend. It matters not what the nations name is – America, Nigeria, New Zealand, Iran – as the Chinese Government investment in these nations is all to support a pro-Beijing agenda. More problematically for these nations, the Chinse Government hoodwinks the governments of the individual nations into believing that they want to develop friendly ties. Political Beijing is only friendly when it suits them: the moment when N.G.O.’s raise questions about human rights abuses, or other questionable activity that is occurring, the Chinese Government gets grumpy.

But at the same time, I feel really sorry for the New Zealand investors in China and the Chinese investors here who came with honest intentions. Many of them just wanted somewhere that they thought was a relatively safe place to invest their monies and hope for a gain of some sort when they wanted their money back. They probably could not, despite contributing to it, have foreseen the massive wipe outs that have been wracking the sharemarkets both here and in China. The failure of corrective actions by banks in China and the Chinese Government to stem the outflow of capital. For a trader in the stock markets, the last few days watching a sea of red on their screens and a plunging red line like a barometer before a hurricane, must have been harrowing.

There are no worth winners in this economic wipe out. Whether by poor Government management over the last decade or so, or by virtue of the post-Global Financial Crisis world economy being in a worse state than we thought this is hurting both New Zealand and China. The latter will probably be subject to further abrupt readjustments as the effects of mitigatory measures take effect and the markets react.  New Zealand, drugged as it is on Christchurch rebuild insurance and dairy farming, however might watching the onset of some seriously stormy economic weather. That barometer might have setting up for another plunge.

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