Colin James: China inevitably a huge part of New Zealand's future

COMMENT

A fantasy of farm leaders for 30 years or more has been that the Chinese will all buy one wool sock, eat one rack of lamb and drink a pint of milk: instant export bonanza.

Of course, it doesn't work like that. But China is an enormous market, enriching fast, with 100 million middle-class consumers who want high-end protein which is this country's specialty.

So to be the first "developed" economy to start talks for a free-trade agreement has set today's farm leaders abuzz. For very good reason.

The logic is powerful, as I argued here back in September in the wake of the collapse of the World Trade Organisation's general trade liberalisation talks at Cancun, when talk was turning to bilateral and regional deals as substitutes. China is well disposed towards this country; we are excluded from European, American and Japanese deals.

Yet the Ministry of Foreign Affairs and Trade was puzzlingly opaque on prospects for a free-trade pact in briefings before the visit of Chinese President Hu Jintao in November, when he nudged Helen Clark into talks to set up a "framework agreement" as the basis for free trade talks, an agreement since fashioned at speed.

The Greens are not puzzled. They are indignant. "Free trade in China will be bad news for workers and the environment in both countries," said Rod Donald, emerging from holiday. The Council of Trade Unions worried for the jobs of the diminishing number of textile, clothing and footwear workers who make the sorts of products that need protection.

Manufacturers would once have stood with the CTU. But most now prefer the lower costs that come with low or zero tariffs. Their Auckland lobby group said a free-trade agreement would be "the opportunity of a lifetime" though that would involve "a steep learning curve".

What should we make of this?

First, a warning, from the Wellington Chamber of Commerce: "New Zealand is far too small to put all its eggs in any one basket. Asia first but not Asia first and last." So keep the options open, as Helen Clark was careful to do when announcing the deal last Wednesday, restating her keenness for a free-trade pact with the United States, though the pickings are a fraction of those in China. (A China free-trade agreement might just stir the US into action on one with us.)

In 20 years China will still not be as rich in personal terms as the US, Europe, Japan or even this country. But it will be an economic powerhouse, not just as a mass producer but also in high-tech. It will be very powerful politically, with a huge, well-equipped military.

China will command east Asia, as those around recognise and fear. And we - excluded from Europe, no longer favoured at court in Washington - are on east Asia's perimeter.

In any case, Japan, Europe and the US are mature economies which do not offer market growth prospects anything like those of China (and India, we must not forget, but that is another story). We also have a rapidly growing ethnic-Chinese population who have the potential to plug us in. China is a huge part of our future.

Might China blow apart under the combined anarchic forces of capitalism and democracy? So far, in two decades of huge change, it has not. So there is reason to think it will hold together.

But think about that word "democracy". We think we know what it means. We are one of the world's most venerable democracies. But the Asian variety that is evolving is not like ours.

Individualistic New Zealanders, with our freedoms and open, responsive (even if imperfect) institutions, would chafe at the constraints in democratic Japan, Korea, Taiwan, Malaysia and Singapore.

Some say, just wait. Those societies are in transition to our sort of democracy. But are they? Economics and market forces suggest they may be; their very different cultures suggest they may be headed somewhere else.

But so now might the Atlantic bastions of democracy, the US and Europe. The "war on terror" has put modern Western democracy on trial.

Left-wing American philosopher Richard Rorty worries that liberties in the great democracies may erode to the point where there is a "new feudalism", without genuine elections and with the courts subservient to governments.

This seems far-fetched. But it reminds us that no one knows what toxic brew will bubble up out of the conjunction of al Qaeda, militant Islam, poverty and oppression in Muslim countries and George W. Bush's blundering crusade.

China is not an answer to that. China's history is repression and/or state dominance, a culture huddled in families. If the US and Europe were ever, in the name of security, to cease to shine the democratic light that has guided others (China included) towards democracy, what then for our freedoms here in the Chinese sphere?

So let's applaud Clark and Jim Sutton for seizing the economic moment with China. But let's not lose sight of China's dark side. We do still need the US, the true free civilising America we knew before Bush.

* Email Colin James