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Saturday, 16 March 2019

The Deadlock between China and the West is taking its Toll on New Zealand’s Economy

Sofia Pale
New Eastern Outlook

 

Throughout 2018, the trade war mounted between China and the US. This is part of a larger standoff between China and the English-speaking world led by America, which is not only putting obvious economic interests at stake, but is also creating security issues and questioning who should possess global leadership in technology. The states who are getting involved in this dispute on the US side will suffer significant losses due to the disruption of long-established economic relations with China. One of these states is New Zealand.

New Zealand has traditionally been seen as an important player in the Anglosphere and a close partner of the United States. The two countries are engaged in close economic, political and military cooperation, which dates back to the Second World War. In 1951, along with the United States and Australia, New Zealand signed the ANZUS Security Treaty, created to oppose communist insurgencies in South-East Asia and the USSR which was supporting these movements. Later, New Zealand–United States relations began to deteriorate due to widespread protests against the Vietnam War in New Zealand, and also because New Zealand refused to host nuclear weapons on its territory. Then a new period began, relations started to thaw, and in 2012, New Zealand and the US signed the Washington Declaration, which was also aimed at strengthening the countries’ defense relations.

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It would appear that the current trade war between China and the United States has gotten tangled up in a more significant rivalry between two different civilizations, between China and the Western world. The massive attack on Huawei is taking place right now, just when humanity is on the verge of making a large-scale transition from fourth generation wireless communication (4G) to 5G mobile communication and internet. The companies and countries whose technologies will be most in demand during this transition will become world leaders in technology for many years to come. For hundreds of years, the West has become grown used to leadership, and even given all of its current development, China was used to copying Western technology.

However, we are now in a situation where Chinese telecom companies, primarily Huawei, have the potential to become the most popular in the world, they could seize the key global markets and begin setting new international standards for internet and mobile communications, overtaking and replacing their Western competitors. Apart from this, the use of Chinese equipment in US telecom networks actually puts America in a position where it is dependent on China to a certain extent, which would also provide China with a lot of scope for intelligence activities. Thus, although China’s main rival is the United States, US partners in the Five Eyes Alliance do not want to grant China access to their 5G networks either, and are not hesitant to support Washington’s war against Huawei and ZTE. New Zealand is no exception. Whether or not the country shares its partners’ fears of Chinese intelligence is neither here nor there; New Zealand has no other choice than to follow suit and align itself with the Five Eyes.

In November 2018, New Zealand’s Government Communications Security Bureau (GCSB) said that using Huawei technologies in the New Zealand 5G broadband network–which a local company called Spark is working on–poses a threat to the New Zealand’s national security. As a result, Spark has been banned from purchasing or using equipment from Huawei. In December of the same year, the GCSB published a report, claiming that New Zealand had been repeatedly subjected to hacking, allegedly involving Chinese hackers.

The Chinese took offence at these actions, which had an adverse effect that soon became visible in China-New Zealand relations. China has begun to make things more complicated for New Zealand’s companies operating on Chinese territory, and has been reducing the number of exchange of students sent to and from New Zealand, etc. New Zealand’s Prime Minister Jacinda Ardern also had to cancel her visit to Beijing. The visit was planned for the beginning of 2019, but the Chinese have put the invitation on hold, citing “clashes in their schedules.” Given that this trip was to be Jacinda Ardern’s first official visit to China as the new Prime Minister of New Zealand, such an affront could cast a shadow over relations between the two countries for years to come.

In January 2019, the Chinese government issued a recommendation for employees at China’s large state-owned companies, telling them to avoid trips to countries that are Five Eye Contributors, including New Zealand. If the trip is unavoidable, China recommends that its citizens coordinate all their actions with the authorities and take extra security precautions to protect information, for example by using special electronic media, etc.

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