As I type this, New Zealand Prime Minister John Key is in Beijing meeting the Chinese President, Xi Jinping to talk about trade and China’s activity in the South China Sea. The Prime Minister has made clear his wishes to upgrade the New Zealand-China Free Trade Agreement and went to Beijing hoping to score a bargain on that count. The Chinese Government also wants a bargain – to continue the massive investment of Chinese citizens and businesses in New Zealand. But as I think about the talks, I cannot help but note the brutal nature of this regime with whom we are dancing this delicate tango, and I wonder how appropriate it is to be dealing with Mr Jinping?
Mr Jinping says that he is leading a massive crackdown on corruption. It is without doubt true that he is leading a crackdown. However it is a crackdown on anyone who dares to challenge his authority, as many Chinese dissidents including Su Changlan have found out to their detriment. Thousands have been detained arbitrarily for varying lengths of time including Mrs Changlan. In her case she has been detained by Chinese authorities after speaking out on local government corruption. Mr Jinping’s crackdown has been widespread and even Chinese officials implicated have admitted their surprise at the depth of the crack down.
Mr Jinping is also conducting aggressive foreign policy by building military bases that are in disputed areas, such as the South China Sea, where in the space of a few months an artificial island was built and turned into an airbase. Despite China’s slowing economy, military spending continues to increase 5-7% per annum and PLA-Airforce now has stealth combat jets. As New Zealand needs the trade and constructive relations that we are trying to build with our S.E. Asian neighbours, we can ill afford to ignore the increasingly tense region, and yet it is also true that angering China would be counter productive and they could walk away from trade negotiations.
The large investment that China is making in New Zealand should be treated with caution as it is destabilizing the housing market. The refusal of the New Zealand Government to declare a housing crisis is simply to placate Chinese investor interest. That investor interest is not unique to New Zealand. The sheer size of China’s economy, its demand for natural resources, commodities and opportunities to do business is a global phenomena. But whereas big nations like the United States might be able to sustain the massive influx of Chinese Yuan, it is questionable at best whether New Zealand can.
I feel sorry for individual Chinese coming to New Zealand. They are from a huge nation with matching huge problems caused by a very powerful, yet increasingly corrupted political system administering an economic machine with global reach. We should try to remember this when we deal with them. And yet at the same time, some tough decisions need to be taken in the near future about how far and hard New Zealand pushes back, because housing is going to be a political issue in the next election whether people like it or not. So will the whole “immigration is killing New Zealand – taking our jobs and our land” theme of the last few years.
Although Mr Jinping did not start this, he has done nothing to slow it down. His authoritarian reign has been as brutal as any of Mao’s successors, and his intolerance of dissent has undone any good that Hu Jintao’s administration might have done for human rights. Since the death of Chairman Mao Zedong, China has had a quantum leap of quantum leaps in terms of economic development, that has kept on going even when western economies were hitting the wall over credit. It has come though at a colossal environmental cost that may yet start to fundamentally erode China’s economy by polluting too many aquifers, making the atmosphere in too many cities too poisonous to breathe.
As Mr Jinping will see out his current term and quite probably get elected for another, I cannot help but wonder whether New Zealand will end up seriously regretting being so warm to his Government.