6 Jul 2014

New Zealand walks US-China tightrope

3:41 pm on 6 July 2014

The Government wants to emphasise its close relations with both America and China - but it may find it's a tricky balancing act as the two powers jostle for position.

The United States is making a deliberate and concerted effort to expand its influence in the Asia Pacific region.

The US Capitol Building in Washington DC.

The US Capitol Building in Washington DC. Photo: RNZ / Chris Bramwell

The Obama administration initially called the move the "pivot" but then modified that term to "re-balance". The policy involves a greater focus on defence ties, trade and diplomacy in the region.

America's moves are being watched carefully by China, which is also flexing its muscles in the South China Sea.

Carnegie Council senior fellow Devin Stewart says the re-balance is a way for the US to secure its position in a rising Asia.

He says the US has been acutely aware of the growth of China for several years, and is worried about its increasing influence.

"If you ask any Pentagon official or military official, usually privately but sometimes publicly, they'll admit to being worried about China's growing naval capacity in the Pacific and its military spending in general," he says.

Victoria University's Contemporary China Research Centre acting director Peter Harris says Chinese Government officials regard the re-balance as "undesirable".

"They don't use strong words like 'provocative' but that's clearly what they do think, and privately they talk about China being contained by the United States ... there is a very strong degree of unhappiness about the re-balancing."

US President Barack Obama and PM John Key give media briefing in the Oval Office.

US President Barack Obama and PM John Key give media briefing in the Oval Office. Photo: RNZ / Chris Bramwell

South China Sea tensions

China's territorial disputes in the South China Sea are causing huge problems for its relationships with its neighbours in South-East Asia.

But the tensions are also making the US nervous.

A White House statement released after Prime Minister John Key met US President Barack Obama last month stated that the two countries "called on ASEAN and China to reach early agreement on a meaningful and effective Code of Conduct".

"In discussing the need for diplomatic and dialogue to resolve disputes, the two leaders rejected the use of intimidation, coercion and aggression to advance any maritime claims."

Victoria University professor of strategic studies Robert Ayson says New Zealand needs to be careful to say things in its own language.

"The danger is that it gives the impression that New Zealand's policy on Asia is not set in Wellington but it is set in conjunction with its traditional partners, and we have to be careful to maintain what is seen as an autonomous policy on this, which can coincide with our partners but does not give the impression that it is determined by that partnership."

Dr Ayson says it is clear that the US re-balance to the region is fundamentally about a competition for Asia's future.

He argues that the contest puts New Zealand in a position where some trade off with those greater powers becomes more likely, especially if the contest becomes ugly.

But New York University Professor of politics and economics David Denoon says New Zealand will not be too badly affected should tensions in the South China Sea spill over into a conflict.

"New Zealand has an advantage in distance, and that is that if there was ever to be conflict in Asia, it is likely to be very long way away. New Zealand is also seen to be a peaceful country, and I think it can often play a role as a useful interlocutor."

New Zealand First Leader and former Foreign Affairs Minister Winston Peters says it is critical New Zealand keeps its foreign policy fiercely independent.

New Zealand must protect its right to make decisions as a sovereign nation with its own government and without fear or fetter of outside influences, he says.

"I think that is under challenge now from the prime minister's recent visit to the United States. My concern is that that understanding of the sovereign purpose of the New Zealand and its people may well be compromised."

Mr Peters says it is unwise for New Zealand to start picking sides.

PM John Key addresses NZ and international media outside the West Wing of the White House.

PM John Key addresses NZ and international media outside the West Wing of the White House. Photo: RNZ / Chris Bramwell

Trans-Pacific Partnership

The Trans-Pacific Partnership (TPP) is also a central plank of America's re-balance to the Asia Pacific.

The deal includes New Zealand and the United States, along with 10 other countries around the Pacific Rim. China is not part of the grouping.

Labour Foreign Affairs spokesperson David Shearer says the exclusion of China from the TPP is deliberate.

He says for New Zealand it doesn't matter because it already has a free trade deal with China but for the US it is more strategic.

Council of Trade Unions economist and policy director Bill Rosenberg says the TPP is actually a strategic deal, not a trade deal.

He says it is about the US acknowledging it has lost ground to China in this area and it doesn't like its economic policies, which are far too successful. That means the US not only wants to get a few countries around it which think like it but also to put pressure on China to change its economic policies more to the US advantage.

New Zealand's increasingly cosy relationship with the US will be closely watched from China, and vice versa.

What many suggest current and future New Zealand Governments should do is ensure they tread a careful line managing those relationships and maintaining the country's long-standing and widely respected, independent, foreign policy.

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US Secretary of State John Kerry and Prime Minister John Key in Washington.

US Secretary of State John Kerry and Prime Minister John Key in Washington. Photo: RNZ / Chris Bramwell