What New Zealand should do about Trump and Xi

Robert Ayson, author of The Economics-Security Nexus Under Trump and Xi: Policy Implications for Asia-Pacific Countries, talks to the Asia Media Centre about New Zealand’s engagement with China and the United States in the Asia-Pacific.

What pressures will New Zealand face in the Asia-Pacific in the next few years?

There were concerns about what Donald Trump would do as he came into office, including on the TPP, but some of the worst fears about US economic and trade policy haven’t come to fruition under the Trump-led administration. Some thought he might precipitate a trade war with China, for example, but that hasn’t happened because Trump needs support for economic-security pressure on North Korea. China and the United States need each other to deal with the North Korea issue at the moment. But the rivalry between them might pick up.

China has also been quieter lately. President Xi Jinping’s focus has been on the party congress. So China has not been as pushy internationally and regionally. But once Xi has all the people in place he wants, he’s got the endorsement for the approach he wants to take, then the gloves may come off.

The broader issue is China is closing the gap on the US in terms of overall influence in Asia. One of the ways it’s doing that is translating its economic power into political and diplomatic and security influence. So I think we will see this time to time from China.

I also think particularly under Trump, things can be pretty volatile in terms of how the US approaches economic-security linkages. The US still has the potential to do some damage to its interests in the region if it continues along that way.

So we’re in a slightly quieter spot now than this time last year. But in the next two years we will see these issues come back. So it’s important for New Zealand and its partners to be ready for the types of acts of pressure when they come, and prepare for how to respond.

Former prime minister John Key speaking during a visit to China in 2013. (Photo: Ministry of Foreign Affairs and Trade image library)

Your report talks about the ‘economic-security nexus’. What does that mean?

There are different types of power and activity in international relations, whether in economic activity through trade and investment, security activity through the armed forces, intelligence or diplomacy. The economic-security nexus is about how they are connected.

In the Asia-Pacific region, China is seen as a rising economic power. That’s where a lot of its influence is, from trade agreements to its importance to other economies. The US remains the leading military power in Asia and is a major security provider to its allies and partners in the region.

The economic-security nexus sometimes can be a positive thing, and economic and security issues are more connected than people think. But at times, it can mean unwanted pressure.

What are some instances of the economics-security nexus at play?

An economic-security nexus that suits a country like New Zealand is the degree of US-China cooperation in placing economic sanctions on North Korea. China and the US share a security interest in making sure North Korea doesn’t build its missile and nuclear forces. This is a form of economic pressure that’s being applied to North Korea. It doesn’t involve violence. It’s also backed by the UN Security Council, so it has international legitimacy.

One of the reasons New Zealand and other partners liked US participation in the TPP negotiations was not just economic benefits, but also security benefits. It was a sign of the US’ commitment to the region.

Research shows areas where there may be unwanted pressure. For example, when China used economic pressure on the Philippines and its banana trade. When John Key went to China last year, there were some op-eds that said if New Zealand still wanted the FTA with China, it had better keep quiet on South China Sea issues. Australia has had some pressure. Singapore’s leader was not allowed by China to attend a leaders’ meeting on the Belt and Road Initiative because of Singapore’s foreign policy.

Trump has pulled the US out of the TPP, which has undermined Washington’s ability to provide some reassurance in the economic-security area. At the same time that Washington is expecting South Korea’s cooperation on North Korea, Trump has threatened to pull the US out of the FTA with South Korea. The US has also asked South Korea to pay for some of the missile defence. China has at the same time imposed restrictions on its interaction with South Korea because of missile defence. South Korea is in a bit of a bind.

Singaporean Self-Propelled Howitzer Primus during the exercise at the Waiouru Training Area in New Zealand in 2015. (Photo: Ministry of Defence, Government of Singapore)

You talk about working more closely with Australia and Singapore. What are the benefits of collective approaches?

In terms of economic-security pressure attempts, it’s advantageous to a coercer if it is able to divide a country off and place pressure individually. But with more solidarity, it would be harder. Joining up conversations in New Zealand, Australia, and Singapore would be helpful.

In the economics-security area, New Zealand, Singapore, and Australia are natural partners. They are members of many of the same institutions in Asia, are part of the same TPP process and dealing with Trump’s withdrawal of the US, see China as important economic partners. They’ve all been on the receiving end of one form of pressure or another. Australia is New Zealand’s number one ally and Singapore is without doubt one of the Southeast Asian countries that New Zealand has the deepest relationship with. So the trio could, informally at least, be able to have a look at what they might do for the other if they get pressured.

The idea of having Singapore aircraft in New Zealand is a good opportunity to deepen the relationship. New Zealand does need to deepen some of those bilateral relationships in Asia. Singapore has been a key partner in the TPP. There’s already strong economic openness and defence cooperation between Singapore and New Zealand, but that doesn’t necessarily mean automatically we’re addressing the economic-security nexus.

We need to make some of those conversations more explicit. Just because you can deepen relations with a country in either economic or security, or even both, doesn’t mean that you’re deepening the economic-security nexus part of the relationship. 

This interview has been edited for clarity and length. Robert Ayson is Professor of Strategic Studies at Victoria University of Wellington. His report comes from Victoria University's distinctive theme on Enabling Our Asia-Pacific Trading Nation. 

– Asia Media Centre