A team effort to boost investor confidence and economic growth is underway in China after Evergrande’s failure. Video / Carson Bluck
Research by a NZDF officer at a US military academy have identified five trigger points that could set China and New Zealand on a path to conflict;
The officer also found two key decisions on China will define New Zealand’s future;
A more diverse economy, diluting reliance on China, was identified as a protection and priority
Five trigger points have been identified as capable of forever altering the relationship between New Zealand and China, according to the thesis of a NZ Defence Force officer studying military strategy at a United States military university.
James Deegan was a major when he wrote the thesis in 2019 which has only now been released. In it, he set out the challenge for New Zealand - a country of “strategic importance” to both China and the US.
Promising New Zealand officers are often posted to US military universities as part of their career progression, in this case the US Army Command and General Staff College at Fort Leavenworth, Kansas.
Deegan wrote: “China is currently New Zealand’s largest export partner. The US is a former ally and traditionally a strong military partner with closely aligned shared values and culture.”
He warned of a “strategic choice between the US and China if the current trajectory of competition between the two superpowers continues”.
“Ultimately, New Zealand will be forced to decide whether it will ride the Chinese dragon or fly with the American eagle” he wrote.
The research on China reflects New Zealand’s gradual shift in focus with heightened geopolitical tensions and the contest for power in the Pacific spelled out in last year’s Defence Strategy and Policy statement.
Deegan described that competition between China and the US in the Asia-Pacific region, with the US relying on “a mix of military power and a growing alliance network” while China was investing in economic development in the area as it developed its military.
He said there were “difficult choices” for New Zealand, which “needs to maintain a positive relationship with two superpowers of strategic importance who are becoming increasingly competitive”.
He reduced these to three “flash points” and two “decision points” - detailed below - capable of shaping New Zealand’s future relationship with China.
Fellow officer Dominic Wylie’s 2020 research has also just been released in which he warned that the rise of China is creating a critical juncture for New Zealand. Wylie attended the US Marine Corps Command and Staff College at Quantico, Virginia.
Both officers’ research carries disclaimers that the work is their own and doesn’t reflect the views of any other party.
NZDF personnel deploy across the Pacific on a range of recovery and stability operations. Here, personnel in the Solomon Islands are working with local army and police. Photo / NZDF
In his research, Deegan identifies two “decision points” during which China became more militarily aggressive, requiring New Zealand to assert itself, or the collapse in China’s influence leading to internal economic issues that flowed on to trading partners.
The worst outcome, he said, would be “conflict” between China and the US, forcing New Zealand to “pick sides”, risking “crippling trade sanctions, or more dangerously, military action”. He said New Zealand should be planning its strategies now because “both outcomes are possible”.
“It is arguably unlikely that New Zealand can continue to be as prosperous as it currently is without both China and the United States unless it broadens its economic and security strategy,” he wrote.
He described New Zealand as having “good” diplomatic relations with the US and a “more fragile and fledgling” relationship with China.
He said China’s expansion would challenge New Zealand’s position of having an independent foreign policy because “it may be unwise to do anything to significantly affect a downturn in its largest export market”.
Aid supplies are unloaded by Fijian soldiers from an RNZAF C-130 Hercules in Suva, Fiji, during disaster assistance.
Deegan described China’s Belt and Road Initiative as an effort to assert its position in a changed world order, and questioned whether it would be possible to succeed “without the conflict often associated with such significant change”.
He said the Asia-Pacific - including New Zealand - had benefited from the growth of the Chinese economy while relying on the US to “underwrite security” which had provided reassurance through the region. ”That reassurance is eroding, and it is not easy for anyone in the region to find suitable alternatives.”
There was a buffer, he said, in the economic dependence China and the US had in each other but it was unclear if risking that would lead to “mutually assured destruction” and whether the threat of doing so would be enough to stop conflict occurring.
In terms of where New Zealand sat, he said straight numbers showed China as the more beneficial partner, but that didn’t account for the less measurable benefits afforded by good relations with the US.
A multinational fleet led by the US carrying out joint exercises in the Pacific. Photo / US Navy
For New Zealand to avoid being caught between the two countries, he said it was necessary to either reduce reliance on Chinese trade or develop a security relationship with a strong military nation other than the US.
Deegan said an enhanced relationship with Australia would help but would see New Zealand under pressure to show its commitment to security in the region by spending more on its military. It would need “significant investment” to maintain pace with Australia.
In contrast, New Zealand could seek to improve trade relations and exports across South East Asia in the same way success had been found in China, he said.
Wylie’s thesis considered how New Zealand could counter China’s growing influence in the Pacific, saying a national, all of government, “China policy” was necessary.
“New Zealand is faced with the greatest threat to its regional influence in the diplomatic and information domain by China. New Zealand must address and deal with this problem and acknowledge it cannot do it alone, nor can it do it when the government is not aligned across the ministries.”
Such a policy would incorporate government and private business with an “aligned economic plan”, he said, and would connect New Zealand to the US strategy for countering China in the Pacific.
“With increased Chinese competition, New Zealand will continue to rely on relationships and the international rules-based order whilst maintaining a minimal credible military capability so that New Zealand can contribute to military responses if order breaks down.”
Flash point 1
The bid by Huawei Telecommunications Company for 5G telecommunication contracts in New Zealand was signalled as a potential issue in 2019 when Deegan wrote his paper. He noted that New Zealand, like its Five Eyes partners, had refused Huawei access because of its perceived connections to the Chinese state.
Deegan wrote the issue would be damaging to relations with China or the US, depending on the ultimate decision-making around Huawei. As it happened, advice from New Zealand’s electronic spy agency, the GCSB, saw the government cut distance between Huawei and infrastructure and sensitive site contracts.
Flash Point 2
Deegan argued New Zealand’s role as a “staunch supporter of human rights … has the potential to seriously damage its relationship with China”. He said New Zealand should pursue the issues through the United Nations and Asean forums but not directly with China.
Flash Point 3
It’s unlikely New Zealand would drop its “anti-nuclear stance” which cost it membership of the Anzus alliance and 30 years out in the cold. However, he said it should revisit the policy around “nuclear-powered (not armed) ships” in New Zealand ports.
“This is a realistic course of action if supported by a public information campaign designed to highlight New Zealand’s stance on nuclear weapons has not changed … [and that New Zealand] has softened its stance on nuclear power due to improved nuclear technologies.” Deegan argued there was “sufficient grey area” to manage the issue and “save face”.
Decision Point One
Increased Chinese military exercises in the south-west Pacific and military protection of Chinese fishing fleets would lead to a souring of New Zealand’s relationship with China, he said. It would lead to New Zealand seeking closer military ties to the US and reducing its trade with China in search of other markets.
“Significant risks surround this option, including the risk that by picking sides early, this becomes a self-fulfilling prophecy.” In a “worst case scenario”, spotting this trigger late could see threats to New Zealand’s “territory, interests or national security”.
Decision Point Two
China’s increased connection to the outside world sees its population demanding democratic governance leading to “political instability” amid an economic downturn and US strategies across the region in which diplomacy is used to curb Chinese growth. While it would allow New Zealand to say less about how China governs itself, it would also leave our biggest trading partner with a weaker economy.
In this instance, it would “greatly affect the New Zealand economy”. Deegan said a Free Trade Agreement with the US would reduce the risk to New Zealand. It would also allow the US, without great risk to its domestic market, to increase its influence in the south-west Pacific.
David Fisher is based in Northland and has worked as a journalist for more than 30 years, winning multiple journalism awards including being twice named Reporter of the Year and being selected as one of a small number of Wolfson Press Fellows to Wolfson College, Cambridge. He joined the Herald in 2004.
