China's Premier Li: Speaking softly but carrying a big stick
By Richard Harman (author)
China’s Premier, Li Keqiang spent much of yesterday in talks with the Government and if his public comments were anything to go by though he may have talked softly he certainly carried a big stick.
Much is made by the Chinese of the "four firsts" with New Zealand and in pre-arrival commentary in China's media, the China – New Zealand relationship was held up as a model of what a relationship with a country with s different system should be.
And yesterday New Zealand added another; it became the first of the anglo-western countries to formally sign up for China’s “One Belt, One Road” which is a massive infrastructure project linking China with Europe along the old trading routes.
But in the background is always the trading relationship and a recognition that ultimately it is China who defines the rules.
There has been some coverage in some media suggesting the “belt and road” could see Chinese investment in New Zealand with even Chinese workers coming here to build it.
But Prime Minister Bill English dismissed that yesterday.
“We don’t see it having particular implications here in New Zealand,” he said.
Rather the involvement would offer the opportunity to New Zealand firms to supply material and participate in the construction of the various facilities that will be needed to create the belt and road.
A former New Zealand Ambassador to Beijing and current Chairman of Victoria University’s Confucious Institute, Tony Browne, told POLITIK that the whole concept of the belt and road was how China saw its future 40 or 50 years out, essentially at the centre of a vast international trading network.
Interestingly, Li related the belt and road to the issues surrounding island building in the South China Sea.
“The belt and road initiative from China includes a 21st-century silk road," he said through a translator.
“And this silk road will go through the South China Sea
“The stability of the South China Sea and peace there are good for all parties.”
New Zealand’s position on the South China Sea differs subtly from Australia and more markedly from the US.
The Financial Times reported last week that Australia had rejected proposals from China that it join the Belt and Road project over concerns it could damage relations with the US at a time when it is asking Washington to do more in the region.
And the paper quoted Shi Yinhong, Professor of International Relations at Remin University in Beijing, who said that on the Maritime Silk Road Project Australia had been hesitant because of a fundamental disagreement over the South China Sea.
English said yesterday that New Zealand expected that any issues in the South China Sea would be resolved according to “the international rules."
Australia, which says it takes no sides on South China Sea disputes but has supported U.S.-led freedom of navigation activities in the region
New Zealand aircraft have participated in some maritime patrols in the South China Sea but has been careful to describe its flights as military exercises.
English said that he and Li had discussed China’s relationship with the US.
“We did have some discussion about the US- China relationship and the Premier was very positive about it and pointed to the economic interdependence between China and the US.”
But the Chinese obviously have their concerns about the Trump administration's protectionist proposals and Chinese media coverage of the Premier’s visit has portrayed New Zealand as a country which, like China, benefits from globalisation.
The big news for New Zealand was that the talks to upgrade the Free Trade Agreement with China would begin on ANZAC day.
Speaking to reporters, English made it clear that the big issue was upgrading the dairy section of the agreement, particularly the “safeguard” clauses which allow China to impose additional duties on New Zealand products if the exports under the FTA are causing serious injury to the Chinese industry.
English said the levels at which these clauses cut in need updating.
Nevertheless, the relative size of the two countries’ economies makes any thought of any kind of relationship of equals non-sensical. That was reinforced at the end of the media conference when having earlier been asked a question about Chinese steel dumping in New Zealand Li asked if he could return and add something after English had finished speaking and after a Chinese official had handed him a note.
He said only 10% of China’s steel production was exported.
"We do have some exports of zinc coated product to New Zealand, but China's exports account for five per cent of New Zealand's total imports of steel,” he said through a translator.
“Most New Zealand steel imports come from other countries, not China.
"China is not dumping steel products in New Zealand."
That has been the Chinese positon since the dumping allegations were first raised early last year.
In July last year, a former MFAT trade negotiator, Charles Finny, claimed that China had threatened trade reprisals on New Zealand after the dumping allegations were raised.
Premier Li was more subtle than that yesterday, but nevertheless, the message was clear.
“Fifty per cent of China’s dairy imports are from New Zealand,” he said.
“But we haven’t said that New Zealand is dumping dairy products in China.”
A New Zealand Cabinet Minister said this argument sounded familiar.
Perhaps there might have been questions about whether New Zealand had thought sufficiently big about the whole thing and whether we had presented China with our vision for 40 or 50 years out of how the relationship might progress.
Yet for all that, the visit itself was seen by New Zealand officials and Ministers as a success.
But Browne saw the visit as an example of China's "leadership diplomacy” and he said it meant that for the three days he was here, China was focussed on New Zealand. That was important.