China relationship a sensitive issue for Ardern

New Zealand’s relationship with China appears to be a sensitive issue, with Jacinda Ardern sounding quite defensive when questioned about it in Parliament yesterday by Simon Bridges. Ardern was supported by both Winston Peters and David Parker asking friendly questions.

Has New Zealand’s relationship with China deteriorated under her Government?

Rt Hon JACINDA ARDERN (Prime Minister): No. There is no question that an economic and people-to-people relationship with China is incredibly important to New Zealand. Visitor numbers in the last year are up 8.4 percent. There’s also been an increase in goods exports by 20 percent in the year to September. That demonstrates the strength of our economic engagement and, I would also say, demonstrates the importance of a bipartisan approach to our relationship.

Rt Hon Winston Peters: Could the Prime Minister elaborate on her comments yesterday about the collapse of New Zealand’s hitherto foreign policy consensus?

Rt Hon JACINDA ARDERN: Absolutely happy to, because I do think this is an important point. New Zealand, for a number of years, has rightly had an independent foreign policy line that is in the best interests of New Zealand economically, in terms of national security, and in terms of its values. That has generally been followed by both the Government of the day and the Opposition. It’s disappointing that in recent times, we have seen the politicisation of our relationship, which sits directly in contradiction to our economic interests and our national security interests.

Hon Simon Bridges: When the last Government Minister to go to China, David Parker, visited last year, did he secure a meeting with his equivalent ministerial counterpart?

Rt Hon JACINDA ARDERN: I do not have in front of me the individual bilateral engagements of every Minister who has visited in recent times. But let us speak frankly in this House: there are challenges in our relationship. There are challenges in our relationships with a number of countries at any given time when you run an independent foreign policy.

Hon David Parker: Can the Prime Minister confirm that when I visited China as Minister of Trade and Export Growth in November last year, I met with Vice Minister Chang from the Chinese administration, who is responsible for both the World Trade Organization negotiations on the part of China and for the bilateral trade relationship with New Zealand?

Rt Hon JACINDA ARDERN: Yes, I can.

Hon Simon Bridges: When will her foreign Minister, Rt Hon Winston Peters, next visit China?

Rt Hon JACINDA ARDERN: Obviously, I’ve already referenced the fact that he visited in May 2018. I haven’t asked him about his forward intentions for visits there, or in fact about any other of our engagements. But let us in this House speak frankly. I do not resile from the position that this Government has taken in support of our independent foreign policy, our economic interests, and our national security interests.

She has no idea when her Foreign Affairs Minister will be visiting China next?

Hon Simon Bridges: Is any progress being made on her visit to China as Prime Minister?

Rt Hon JACINDA ARDERN: Again, as I’ve already pointed out, I have already had high-level engagement at the highest level, where, in fact, the Premier, the last time we met, talked about his invitation to me to visit. But, again, I do not measure the strength of our relationship in such binary terms. We have—[Interruption] Our people-to-people exchanges have increased—[Interruption]

Hon Simon Bridges: In light of the fact that she hadn’t read that Georgetown speech before it was delivered, does she confirm that she agrees with all of its contents today?

Rt Hon JACINDA ARDERN: The Deputy Prime Minister’s address acknowledged that the United States had taken a different foreign policy line in recent times and that it is in all of our interests if the United States continues to engage both at a regional level and with multilateral institutions. If the Opposition doesn’t agree with that, then that’s a matter for them.

Hon Simon Bridges: Just who is ultimately responsible for New Zealand’s foreign affairs: the foreign Minister or Jacinda Ardern?

Rt Hon JACINDA ARDERN: As is, of course, convention the Prime Minister and not the Leader of the Opposition.

Hon Simon Bridges: Then why didn’t she read the foreign Minister’s incredibly significant speech to Georgetown University before he gave it?

Rt Hon JACINDA ARDERN: We absolutely have agreeance on the principles of our position and our engagement both with the United States and with China, and in past Governments, there’s equally been general agreeance around New Zealand’s foreign policy interests between Government and Opposition as well. I was already aware of the principles contained in that speech.

So two sensitive issues – the relationship with China, and Ardern’s relationship with Peters.

Of note also was James Shaw’s contribution:

Hon James Shaw: Does the Prime Minister think that the relationship with China might be improved by, say, gifting a sheep farm to a wealthy businessman from that country?

I didn’t think it was Green practice to play those sort of diversionary games in Parliament.

NZ Herald addresses this in their editorial:  Has our govt antagonised China?

When friends fall out it can be very hard not to take sides. When the “friends” are superpowers and you are tiny by comparison, it becomes doubly hard. That is the position our Government is in. Its avowed foreign policy is to remain strictly neutral in the trade war and other tensions between the United States and China. Yet China appears to believe New Zealand is siding against it.

It is hard to draw any other message from the suspension of the invitation to the Prime Minister to visit the People’s Republic this year and the postponement of a joint tourist promotion that was to be launched in Wellington next week. And it is not hard to see why China would have the impression this country is not the friend it used to be.

The new Government’s “reset” of policy towards the Pacific Islands is strongly tinged with support for the US and suspicion of China’s interests in the region. At a speech in Washington in December, Foreign Minister Winston Peters said the Southwest Pacific was “becoming more contested and its security is every more fragile”. A purpose of his visit, he said, was to “enlist greater US support in the region closest to New Zealand”.

“We unashamedly ask for the United States to engage more and we think it is in your vital interests to do so. And time is of the essence,” he added.

He talked of “asymmetries at play in the region when larger players are renewing their interest in the Pacific” and said, “the speed and intensity of those interests at play are of great concern to us.” He went on to acknowledge China and said New Zealand “welcomes all partners in the Pacific on terms that take account of the Pacific’s needs, where quality projects are sustainable and delivered transparently”.

Point taken in Beijing no doubt.

Two key points from all of this is how Peters is managing the sometimes relationships between both the USA and China, and how much influence (and knowledge) Ardern has with Peters and his Foreign Affairs portfolio.

Peters has a history of being not very complimentary about China, even making Chines ‘jokes’. He also seems to see himself as the experienced statesman compared to the inexperienced Ardern.

It was always going to be a challenge having the crucial Foreign Affairs role taken by someone in a different party to the Prime Minister. And when that role is being carried out by Peters I think Ardern may continue to have problems with dealing with China.

It will be a real test of Ardern’s mettle as prime Minister that won’t be helped by feel good PR.

Pressure on Ardern and Government over relationship with China

Jacinda Ardern’s first day in Parliament for the year was difficult, with questions being asked about New Zealand’s apparently deteriorating relationship with China.

Juggling different international interests is one of the biggest challenges for a Government. This cannot be done via PR and friendly media.

While Ardern has had positive coverage at the United Nations (last year) and Davos (last month), she doesn’t seem to have established good working relationships with two of the biggest economic powers, USA and China.

She has played a sort of anti-Trump card to the applause of some (but not Trump), and Foreign Minister Winston peters has been campaigning around the Pacific against Chinese influence.

Sam Sachdeva (Newsroom): NZ-China ‘scheduling issues’ cause for concern

The tourism relationship between New Zealand and China is a “special and enduring one”, Tourism Minister Kelvin Davis said last October.

That was why the official 2019 China-New Zealand Year of Tourism would be marked with a special event at Te Papa on February 20.

Just one problem: the event was quietly postponed – to an as yet unknown date – due to what Davis described as a “scheduling issue” on the Chinese side.

Coming on the heels of similarly nebulous scheduling issues which put paid to Jacinda Ardern’s plans to visit China before the end of 2018, it is difficult to shake the feeling that a point, however subtle, is being made.

Last year was particularly difficult for Ardern’s Government when it came to China.

He details well covered issues, then concludes:

Where things go from here is unclear: while Ardern says officials are still working on dates for a Beijing visit, there is a sense from some foreign affairs watchers that the delay at China’s end is directly related to other strains on the relationship.

The nature of China’s interventions means people will be on edge for any perceived slight, real or otherwise: some have questioned the fate of a trip to Beijing by Davis and Local Government Minister Nanaia Mahuta which had supposedly been pencilled in for early March (both ministers’ offices say a firm date has never been set down, with discussions still underway).

The relationship may not be as dire as National is claiming – but there are certainly some issues which need to be resolved.

NZ Herald: Prime Minister Jacinda Ardern says there are challenges in NZ’s relationship with China

Prime Minister Jacinda Ardern is playing down any suggestions New Zealand’s diplomatic relationship with China is on the rocks but admits the two nations were facing some “challenges”.

Ardern was this morning grilled on a number of issues relating to New Zealand’s relationship with China.

She said New Zealand still puts a lot of effort into its relationship with China, but is “at the same time facing some challenges”.

Ardern added: “But in a way I think that preserves New Zealand’s independent foreign policy.”

Having an independent foreign policy is fine, but when it has an affect on relationships with important trade countries it can get quite tricky, as Ardern appears to acknowledge (the ‘challenges’).

Ardern’s predecessor John Key used to go to China every year during his time as Prime Minister.

But Ardern said she did not want to set that expectation.

She said the Government sent a number of ministers to China last year – Foreign Minister Winston Peters visited China midway through the year.

“Those exchanges are happening with our Government, it’s just that I don’t want to set an expectation that I go somewhere every single year.”

She stressed that the diplomatic relationship with China was important, but acknowledged there were some challenges.

When asked what those challenges are, Ardern said there were some questions over the Huawei decision.

Stuff:  Until Jacinda Ardern visits China, questions about the relationship will only deepen

There is no doubt that the relationship is in a difficult state, and many in media and foreign affairs circles are on the lookout for any sign that China is punishing New Zealand.

News that the Government’s security bureau may block Chinese giant Huawei from participating in the next generation 5G telecommunications network, seemingly under pressure from our Five Eyes partners, has left the political class on edge.

Everyone expects some form of punishment from the world’s largest command economy, creating a high risk of confirmation bias, where we interpret facts based on what we believe is coming.

Prime Minister Jacinda Ardern was questioned repeatedly, forced to defend the state of relations with New Zealand’s largest trading partner.

Back in October, Tourism Minister Kelvin Davis was so excited by the coming China-New Zealand year of tourism that he posted an official statement on the Beehive website.

An opening ceremony event was to be held at Te Papa on February 20, coinciding with the hosting of 2300-year-old Chinese artefacts, the Terracotta Warriors: Guardians of Immortality exhibition.

However, a fortnight ago, the Chinese (who were the hosts of the event) unexpectedly cancelled.

“Officials are working with the Chinese Embassy to get a new date confirmed for this event,” a spokesman for Davis said.

These things will take more than a feature in the Womens’ Weekly or a friendly article in the Guardian to resolve.

Whether the current low level tension escalates is impossible to know.

On the one hand, China faces bigger problems, in its ongoing trade war with the United States, meaning it cannot afford to get into unnecessary fights elsewhere.

On the other, if China wanted to demonstrate its power to cause considerable pain to a country resisting its expansion, while causing relatively little pain to its own economy, New Zealand could be an attractive target.

There are certainly challenges for Ardern here, especially with Winston Peters in charge of Foreign Affairs.

China puts Ardern visit on hold, postpones tourism launch

China appears to be putting a squeeze on Jacinda Ardern and New Zealand, with a visit to China by Ardern being postponed, and a joint ‘Year of Tourism’ launch being scuppered.

In part this appears to be in response to block Huawei from supplying equipment for a major 5G broadband installation.

Barry Soper (NZ Herald):  China, New Zealand links sink to new low: PM Jacinda Ardern’s visit on hold, tourism project postponed

Diplomatic links with China appear to have plummeted to a new low as Prime Minister Jacinda Ardern is given the cold shoulder by Beijing and a major tourism promotion is postponed by the superpower.

Ardern was scheduled to visit China early this year but the invitation has been put on hold.

The 2019 China-New Zealand Year of Tourism was meant to be launched with great fanfare at Wellington’s Te Papa museum next week, but that has been postponed by China.

The initiative was announced by the Key Government almost two years ago when Chinese Premier Li Keqiang was in Wellington.

Richard Davies, manager of tourism policy at the Ministry of Business, Innovation and Employment, said: “China has advised that this event has had to be postponed due to changes of schedule on the Chinese side.”

It looks like a deliberate distancing and point making by China. This has significant implications for trade and tourism.

Ardern said after the Cabinet meeting yesterday that the official visit to Beijing is being worked on. Late last year she was on standby to visit but said they could not co-ordinate their diaries. New Zealand sources in Beijing say her first visit to China is not expected any time soon.

The decision by the Government’s chief spy agency, the GCSB, to axe Chinese telco giant Huawei from the Spark 5G broadband rollout is seen by China as New Zealand taking sides with the United States. The Trump Administration publicly asked its Five Eyes partners not to do business with Huawei.

The GCSB’s version that Huawei posed a risk to national security isn’t enough for Beijing. It wants a better explanation before opening the door to Ardern.

This could take a lot more than a bit of PR poncing to resolve. The real world of international trade and diplomacy involves more than photo ops and friendly articles.

Asset management and corporate adviser David Mahon, based in Beijing, said governments needed to get over thwarting Chinese economic aims in a way reminiscent of the Cold War struggle between capitalism and communism.

“It’s unhelpful for politicians and a few anti-Chinese professors to feed uncorroborated McCarthyite conspiracies about Chinese spy networks in their countries and targeting anyone who doesn’t share their view”.

Philip Burdon, a former National Government Trade Minister and recently chairman of the Asia New Zealand Foundation, said New Zealand couldn’t afford to take sides.

“We clearly need to commit ourselves to the cause of trade liberalisation and the integration of the global economy while respectfully and realistically acknowledging China’s entitlement to a comprehensive and responsible strategic and economic engagement in the region,” he said.

Sources in Beijing say China plans trade retaliation and the turning back of an Air New Zealand plane at the weekend may not have been a coincidence. Sources say the airline has been trying to secure extra landing slots in Shanghai without success.

NZ Herald: Air New Zealand takes blame for administrative blunder that meant Shanghai flight turned around

Air New Zealand has taken responsibility for a costly blunder that resulted in a flight from Auckland to Shanghai being turned around.

A spokeswoman said the aircraft at the centre of yesterday’s problem was new to the route and hadn’t gained the necessary approval.

Asked whether the Chinese stance had changed, she said: ”No, this was the result of an administrative issue on our end.”

An odd sort of ‘administrative issue’. getting approval for a route and landing is a fairly basic part of flight planning.

Prime Minister Jacinda Ardern said the mistake was Air New Zealand’s and was separate to China-New Zealand relations.

“It is important to be really clear and not confuse administrative and regulatory issues as issues to do with the relationship.”

Asked how she could be sure that this had nothing to do with any political reasons, she said: “Aircraft travelling into China are required to be registered. This one was not. That is the issue that has occurred here.”

Sounds like a sensitive issue.

Ardern can’t even get a plane off the ground for a visit to China. This isn’t a good sign in New Zealand-Chinese relations, and the late postponement of the launch of the 2019 China-New Zealand Year of Tourism should also raise some alarm bells. When is it going to be launched ? Later in the year?

This may not just be a problem for Ardern. Pror to getting into Government with coalition partner NZ First:

China may not be able to tell New Zealand what to do, but they seem quite capable of telling us what they won’t do with us.

This may not help either:

And from RNZ: Government has its ‘eyes wide open’ on China: Winston Peters

Mr Peters comments follow a report by Stanford University’s Hoover Institution, Chinese Influence and American Interests: Promoting Constructive Vigilance, which criticises New Zealand for not doing enough to counter Chinese influence.

“New Zealand’s government, unlike that of Australia, has taken few steps to counter foreign interference in its internal affairs,” the report said.

“Charity fund-raising, which has been used by Chinese United Front organisations to mask contributions, remains excluded from disclosure requirements.

Mr Peters said that he accepts the comments made in the report.

“When we came into government in 2017, on these issues we came in with our eyes wide open.”

He said that the government has already taken action by implementing its Pacific Reset policy.

“That’s why we’ve got the Pacific Reset, which is a huge turnaround in our approach to our neighbourhood and our engagement with it.”

“We all need to understand the changed environment and the Pacific Reset had a proper, serious evaluation of that and that’s why it’s a very, very critical part of our present foreign policy.”

However, he said the policy wasn’t designed to counter the influence of China specifically.

“No, it’s to ensure that the shape and character of our neighbourhood maintains the level of influence of countries who believe in democracy … who believe in sovereignty and countries who have got the best interest of the neighbourhood in mind, not some wider and larger purpose.”

Mr Peters wouldn’t say whether he thought China was becoming increasingly authoritarian.

“When the leader becomes what effectively looks to be the president for life, then that is a changed circumstance that would be naive not to understand.”

“China’s a one-party state – it’s not a democracy”.

These comments are likely to have been noticed in China.

Mr Peters said that he doesn’t believe there will be any reaction from China on the Huawei ban.

Maybe he will need to revise that belief.

Ardern may be caught between China versus US trade battles.

And also between Peters and China.

More important questions for National than ex-lover spat and personal revenge

The turning rogue of Jami-Lee Ross and the text of Sarah Dowie has been a big story for months now, but a part of the issue that has been largely overwhelmed by the social saga side is what this has exposed about the National Party. Some have recently written about this.

Graham Adams (Noted & Stuff) looks at and beyond Parliament’s star-crossed lovers who crossed each other, starting with Jami-Lee Ross’s maiden speech in Parliament 2011.

In his speech, Ross also quoted the school’s aim to produce “good and useful citizens”. Most people will conclude he isn’t good but he has certainly been useful already if you look beyond the narrow interests of the National Party to the wider interests of the nation.

Ross has given us insights into our political life that only an insider could know, including how donations are handled and how much influence some donors expect (or hope) to have over candidate selection in the National Party.

His disclosures about wealthy Chinese donors has also sparked increased interest in Professor Anne-Marie Brady’s research into how United Front activities run by those close to the Chinese Communist Party have infiltrated our political life.

And Ross could prove himself to be even more useful if he told us much, much more about how our politics are entwined with the push by the CCP to influence perceptions of China overseas and policy towards it.

For starters, he might enlighten us on the role of Dr Jian Yang — that mysterious figure in National’s caucus who was part of China’s intelligence community and a member of the Communist Party, and who refuses to speak to journalists (or at least English-speaking ones).

It would be entirely appropriate for Ross to perform this service, not least because in his speech he declared himself to be passionately opposed to socialism.

He should be very happy then to expose the deep links between National — the party purportedly of “individual freedom and choice” (number 4 on its list of values) — and the communist regime in China that is one of the most repressive and repugnant on the planet.

Some will think it’s the very least a man who professed in 2011 to be devoted to “individual freedom” and who in 2018 dedicated himself to exposing the “rot within the National Party” could do.

Fran O’Sullivan (NZ Herald): Bigger issues to deal with than emotive texts

There are more pertinent issues at play.

Despite the public front National has adopted on the donations issue, it has still not satisfactorily dealt with Ross’ claim that he was effectively asked to wash a $100,000 donation from Yikun Zhang by ensuring it was split into smaller amounts.

National Party apparatchiks denied there was a $100,000 donation. National Leader Simon Bridges said at the time a “large sum of money” came into the party from multiple sources through donations from Zhang and supporters through Ross’ electorate account in Botany in the first instance.

The issue here is one of “substance over form”.

Nor has Bridges dealt satisfactorily with the clear implication from the tapes that Ross leaked, of a prior conversation that suggested he favoured effectively trading positions for different ethnicities on National’s list, in return for donations.

These issues — which strike at the heart of democracy and business ethics — have been obscured in the general furore over Ross’ meltdown.

It is obvious that there is sufficient underlying truth to Ross’ claims on this score to have provoked senior National MPs to call for change.

Former Attorney-General and National MP Chris Finlayson was sufficiently exercised to use his valedictory speech in Parliament last year to say he was concerned over funding of political parties by non-nationals.

Finlayson called for both major parties to work together on party funding rules, saying it was his personal view that it should be illegal for non-nationals to donate to political parties.

“Our political system belongs to New Zealanders and I don’t like the idea of foreigners funding it … we need to work together to ensure our democracy remains our democracy.”

The issue has also festered with the long-serving veteran National MP Nick Smith who revealed to the Herald this week he also wants reforms to ensure the integrity of the NZ electoral system.

If Ross is of a decent mind he would chalk up a minor victory on this score as having focused National MPs’ attention on behind-the-scenes dealing in their party.

National is not going to wash its dirty linen in public but the allegations their former party
whip raised are of sufficient merit for police to finalise that particular probe.

I don’t think we can rely on Ross being ‘of a decent mind’, he seems more intent on personal revenge.

And we can’t rely on the Police to do a decent investigation of political funding, they seem to prefer to avoid political investigations.

Unfortunately I think that much of the media is more interested in the personal lives of politicians becoming public fodder.

But a proper examination of funding methods and of possible Chinese influence in the National Party is where journalist attention should be focussed

Is Winston Peters playing the PM on foreign policy?

Guest post from Gezza


Interesting Opinion Piece by Patrick Smellie:

US and Chinese officials met in Beijing this week for the first talks since both countries’ presidents agreed a trade war ceasefire at last month’s G-20 summit in Argentina.

By early March, they need a plan that simultaneously softens the impact on China of the US’s new embrace of protectionism while starting to deal with China’s rampant intellectual property theft and subsidies that make its state-backed corporations unfair global competitors.

In doing so, both leaders will be seeking a win for their respective domestic audiences.

Getting there will be no mean feat. The Chinese ‘long view’ of history is a powerful organising principle for the Middle Kingdom’s global ambitions. Unlike Trump, its leadership is capable of thinking long-term.

I don’t know if that’s a fair assessment. Trump is capable of thinking long-term. He just isn’t capable of seeing other viewpoints and considering them, or of understanding what motivates others, or of adapting his negotiation strategies when it’s evident he could approach things differently. Or of concentrating enuf on details to foresee adverse consequences or opposition that could work against him.

He’s a rich kid who’s always done whatever it takes to get what he wants. And that includes lying, going bankrupt, and paying people to arrange for him to then profit from the misery & poverty that’s sometimes caused others. His narcissism works well for him when he’s in total control & surrounded by sycophants who will do his bidding. Or when he can cheat and lie & get away with it because he can bankrupt less wealthy opponents or victims, and for him the ends (getting what he wants) has always justified any means.

But now he’s not in total control. So he’s often chaotically flailing around in pursuit of long-term plans that he might deliver, but might screw up because he’s so flawed he makes people want to get rid of him to stop the chaos and division and wrecking of America’s standing in the world.

The talks also occur against a backdrop of heightened competition for defence and security influence around the world.

There has been questionable co-ordination between Prime Minister Jacinda Ardern and her Foreign Minister and deputy Winston Peters over our relationships with China and the US.
The US-led initiative to keep Chinese-built Huawei and ZTE componentry out of Western 5G mobile networks represents the sharp point of intersection in trade and security tensions.

Nations try to pursue security and trade agendas on separate tracks, but one inevitably bleeds into the other in ways. At best, at a global level, these current tensions may be bad for global economic growth. At worst, they could become the catalyst for conflict, which an American president desperately seeking to project strength might embrace.

For New Zealand, this simultaneous escalation of trade and security tensions between our traditional western ally and our largest trading partner is fraught with the risk of becoming collateral damage in the ensuing contest of empires. As a member of the Five Eyes cyber-spying network, New Zealand sits on the US side of the anti-Huawei fence. But it also seeks an upgraded free trade agreement and legitimately worries that Beijing could turn off the tap on agricultural exports, international students, Chinese tourists – or all three.

Australia has already suffered for its more emphatically pro-US stance.

We should never put all our eggs in one basket. Both the US and the Chinese can punish us economically for simply pursuing our own issues-based foreign policy when they want to bully us into siding with them or opting out in disputes between their economic and foreign policy initiatives and engagements.

Wider free trade with as many other nations as possible is clearly desirable, but trade in what? As other countries are forced by Trade Agreements to become more productive and competitive with our major food exports, what else do we have?

Clearly, the New Zealand government needs to pursue any rebalancing in the relationships to the two biggest protagonists in our region with great care.

Just before Christmas, there were worrying signs to suggest such care is, if not absent, then lacking, with questionable co-ordination between Prime Minister Jacinda Ardern and her Foreign Minister and deputy Winston Peters.

The Ardern approach embraces multi-lateralism, ‘progressive’ free trade agreements that do more to protect national sovereignty than in the past, and a new demonstration of leadership on climate change. On the world stage, Ardern has shone as a beacon of optimism and inter-generational leadership change.

That may be how she is portrayed here but apart from US female talk show hosts, who else in the world cares? So she’s a minor celebrity abroad with people who don’t count. What impact will she have on other world leaders? How many other young intergenerational leaders are there who will hearken to her siren song and make the world a kinder place? Isn’t her government rather chaotic and it’s benefits and drawbacks & objectives all rather fuzzy? Could it all just crash and burn? Hope not, but I just don’t know until we know what the werkinggruppes produce for them to make (or justify) policies from – and what they ignore.

Meanwhile, Peters and NZ First Defence Minister Ron Mark have made the running on defence and security policy in ways that are pulling New Zealand much closer to the US.

Mark’s defence strategy paper saw New Zealand explicitly criticise China’s expansionism in the South China Sea for the first time and his announcement of a multi-billion dollar upgrade of air force surveillance capability to include potential for anti-submarine weaponry were highly significant nods to Washington DC.

Peters took that a step further last month. In a speech to an elite US audience on the Pacific region shortly before meetings with deputy vice-president Mike Pence and Secretary of State Mike Pompeo, Peters said: “We unashamedly ask the United States to engage more and we think it is in your vital interests to do so.”

Time was “of the essence” as “larger players are renewing their interest in the Pacific with an attendant level of strategic competition”. These and other parts of the speech represented serious new lines in the sand for New Zealand foreign policy.

We probably should want the US to engage more in the South Pacific. China’s interest is self-interest. And the degrading of American influence & power is vital to that. But do we want to engage more with the US under Trump? Really? Trump’s interest is American self-interest. Hopefully when Trump is gone – which may be by 2020 – sanity and a more careful, thoughtful President will make them take more of an interest in promoting & protecting the interests of free speech democracies in the South Pacific on both moral & shared interests grounds.

But when asked whether she had read the speech prior to delivery, let alone whether the Cabinet had discussed it, Ardern gave an almost breezy dismissal.

That is deeply worrying.

Regardless of whether Peters is articulating a revised foreign policy stance that the whole coalition government agrees with, such revisions require the active engagement of both the Prime Minister and the Cabinet.

Failing to insist on that fuels the narrative that Peters is successfully playing Ardern not only on domestic policy issues, but on foreign policy as well, leveraging his party’s impacts far beyond the mandate implied by its 5 per cent support at the 2017 election.

Ok. Maybe. So what? Is National likely to have any more of a coherent foreign policy or to do anything different?

https://www.stuff.co.nz/business/109828977/is-winston-peters-playing-the-pm-on-foreign-policy

Apple earnings warning a casualty of trade war

The Apple (APPL) share price dropped nearly 9% on the sharemarket after they issued earnings warning that they will earn much less than they have previously advised/expected. The drop in earnings is said to be primarily due to the US trade war with China. The share price has recovered a little on Friday US time, by midway through the day bouncing back 3.4%.

9to5mac: Apple’s shock earnings warning sees AAPL stock plunge 9% in pre-market trading

Apple’s shock earnings warning – the first time it has issued one since 2002 – has sent the stock price crashing in pre-market trading. At the time of writing, AAPL is almost 9% down on yesterday’s close.

It follows a letter from Tim Cook warning investors that Apple expects to miss the low end of its fiscal Q1 guidance by $5B, and the high end by $9B.

Cook said that almost all of the missing revenue was in China, thanks to a combination of low economic growth in the country and tensions created by the Trump administration’s trade war with China.

It wasn’t just AAPL stock hit by the news: Business Insider reports that shares in major Apple suppliers are also taking a hammering. AMS, which makes Face ID sensors for Apple, took the brunt of the impact, losing 17% of its market cap overnight – but it wasn’t the only casualty.

Apple’s last earnings warning was in 2002.

Like any wars there can be casualties on all sides in trade wars.

 

Whimsiest of tweets affecting Wall Street

I heard an old  saying repeated last night (1 News) – “When America sneezes the world catches a cold”.

Another saying could now be appropriate – “When Donald Trump tweets Wall street sneezes”.

Wall Street went up when the US and China seemed to come to an agreement to avert more tariff increases, but it has dipped after Trump tweets raised uncertainty.

Bloomberg: China Swings Into Action on Trade as Trump Ups Pressure for “Real Deal”

U.S. President Donald Trump said China is sending “very strong signals” following weekend trade discussions in Argentina, as uncertainty remains over what commitments were made between the two nations.

Beijing will start to quickly implement specific items where there’s consensus with the U.S. and will push forward on trade negotiations within the 90-day “timetable and road map,” the Ministry of Commerce said in a statement on Wednesday morning in China.

Hours later, Bloomberg News reported that officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas — the first sign confirming the claims of Trump and the White House that China had agreed to start buying some U.S. products “immediately.”

Global markets cheered the weekend accord on Monday, only to reverse course Tuesday as doubts emerged over exactly what the world’s two largest economies had agreed on.

NY Times: Trump Warns China He’s “Tariff Man,” Spooking Stock Investors

The trade war is back on — at least as far as investors are concerned.

Stocks sank on Tuesday, as President Trump threatened China with further tariffs, just days after the two countries agreed to a cease-fire in their escalating economic conflict. Referring to himself as a “Tariff Man,” Mr. Trump, in a series of tweets, deepened the murkinesssurrounding the trade agreement, while members of his economic team talked down the prospects of a broad deal.

The fear is that a lasting trade war will undermine the global growth at a time when some of the world’s largest economies are already slowing down, and the United States, a standout performer, is also expected to slow.

Stock markets always go up and down, sometimes seemingly for the flimsiest of reasons.

Add to that are fluctuations now due to the whimsiest of tweets.

The worry is that a whopper of a whimsy may precipitate a stock market slide down a slippery slope.

 

China and US resolving trade war, and ‘China needs NZ’

The trade war between the US and China seems to have been moderated after a meeting between President Donald Trump and President Xi Jinping.

Reuters: U.S., China agree trade war ceasefire after Trump, Xi summit

China and the United States agreed to a ceasefire in their bitter trade war on Saturday after high-stakes talks in Argentina between U.S. President Donald Trump and Chinese President Xi Jinping, including no escalated tariffs on January 1.

Trump will leave tariffs on $200 billion worth of Chinese imports at 10 percent at the beginning of the new year, agreeing to not raise them to 25 percent “at this time”, the White House said in a statement.

“China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,” it said.

“China has agreed to start purchasing agricultural product from our farmers immediately.”

The two presidents also agreed to have talks on other contentious issues such as on structural changes with respect to forced technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.

Meanwhile here in New Zealand, on Q+A last night, ‘Beijing-based economist Rodney Wigram explains why China needs New Zealand’:

 

GCSB stops Spark from using Huawei for 5G

The GCSB is stopping Spark from using Huawei equipment for their new 5G cellphone network. They won’t give reasons, saying they are classified.

There are concerns that a Chinese owned company be involved in communications infrastructure – but some also have concerns about US technology companies with allegations of CIA back doors.

RNZ: Reasons to block Spark’s 5G rollout ‘classified’

The Minister responsible for the Government Communications Security Bureau (GCSB) said the reasons why a Chinese tech company won’t be involved in the rollout of 5G technology here are classified.

The GCSB has turned down Spark’s proposed use of Huawei equipment in its new network because it would raise significant national security risks.

Andrew Little said he was briefed on the decision on Monday but cannot divulge what the risks might be.

“Spark notified the GCSB two or three months ago, GCSB has carried out an assessment on the technology that Spark proposes to introduce and has assessed that technology as posing a national security risk. That assessment was notified to Spark today.”

“Spark have indicated they will have a close look at the reasons for GCSB’s assessment then if Spark wishes to continue with their proposal they then have the option of working with the GCSB on looking at mitigation of [those risks].”

Mr Little said the 5G technology was more sophisticated than older network technology and was not currently in use in New Zealand.

“The principal difference between 5G technology and the conventional 4G and 3G technology is that the conventional technology has an infrastructure core and then peripheral technology such as cellphone towers and the like and they can, in effect, be kept separate but you cannot do that with 5G technology.”

“Every component of 5G technology, every component of the network is integrated and therefore access to one component can lead to access to the entire network.”

He said the GCSB decision was not a complete deal-breaker for Spark’s rollout of 5G.

“Spark has said they are committed to rolling out 5G by the end of 2020, there’s no reason why they can’t stick to that timetable. They have known that they’d have to go through this process… it’s underway and there’s still work to do.”

Ardern won’t condemn China over Anne-Marie Brady

“I wouldn’t want to set any expectation that I’d be generally briefed on an individual’s case… I expect that based on what [police] investigation concludes, that they would act appropriately,” PM Jacinda Ardern says, of the Anne-Marie Brady case.

Jacinda Ardern told us she wouldn’t intervene in how the Police investigated Dr Brady’s complaint. She says she had no reports that national security issues were involved.