Could Southeast Asia hold the keys to NZ's success in China?

New Zealand and the majority of ASEAN states seem to be in much the same boat when it comes to China, writes David Pine. 

OPINION: Let’s start with a confession. For people who spend their working lives focussed on New Zealand’s relations with Southeast Asia, it is difficult not to develop a sense of envy about the attention our country gives to the region’s larger and more prosperous neighbours to the north.

Plenty is going on between New Zealand and the 10 countries of the Association of South East Asian Nations (ASEAN).

Almost two years ago, the 11 governments agreed to lift the status of their relationship. The difference between a “Dialogue Relationship” and a “Strategic Partnership” might seem like the sort of word game only diplomatic trainspotters would care about, but it was a considered move on both sides and included a commitment from New Zealand of more than $200 million in projects and initiatives with ASEAN. Trade between New Zealand and ASEAN doubled in the quarter century from 1990. An ANZ report suggested it could double again in a decade. 

Source: Ministry of Foreign Affairs and Trade

Nevertheless, Malcolm McKinnon’s 2015 study of the relationship concluded that the “New Zealand public remains unengaged with ASEAN as an idea or a project”, and that this situation was unlikely to change any time soon. 

Why should New Zealanders care about ASEAN? In the 50 years of its existence, there have been periods where it would have been kind to describe progress as incremental, a point that has been made by the institution’s critics and supporters alike. But ASEAN has stuck to its course and, from this vantage point, the progress is undeniable. It has doubled its membership from the original five without losing any members. It has expanded the range of its agenda to cover three pillars, political and security, economic and socio-cultural. And it has reached outwards to develop relationships with external partners, including New Zealand. 

New Zealand benefits from the stability and integration that ASEAN has brought to Southeast Asia. And it has contributed to both.  In recent years, it is the trade and economic relationship that has been getting the most attention, but it pays to remember that this is built on other foundations.   Perhaps the jewel in the crown of New Zealand’s relations with ASEAN has been education. The Colombo Plan, under which so many of the region’s political and business leaders were educated, created a priceless set of people to people linkages. New generations of students from the region continue the legacy today. 

But, the depth and breadth of New Zealand’s relations with ASEAN notwithstanding, it’s China that comes first to mind when New Zealanders think of Asia. At present, attention is focused on China’s gargantuan Belt and Road Initiative. This re-imagining of the old Silk Road, with its enormous infrastructure and development projects, could shift the centre of global economic gravity.  New Zealand is right to be engaging closely with China on this.

Acceptance of China’s assertions of leadership, however legitimate, is never going to be a straightforward matter in a region of states that prize their hard-won – in many cases, recently regained – independence. China’s state-centred model of economic development aligns more neatly with the aspirations of some of the region’s economies than with others. And the situation is even more complicated when relations with the region’s other powers, such as the United States, India, Japan and South Korea, are taken into account. Viewed through this lens, New Zealand and the majority of ASEAN states seem to be in much the same boat. 

Another challenge, one that perhaps because it’s so obvious does not get mentioned often enough, is the sheer mismatch of scale between China’s needs and New Zealand’s capabilities. 

New Zealand has a lot to offer in agricultural services, construction, supply chain management and, increasingly, in niche areas of ICT. But China’s needs are vast and if “New Zealand Inc” is to maximise the potential that the Belt and Road Initiative represents, we are unlikely to do so without finding the right partners. Going it alone would leave New Zealand exposed politically and under-powered commercially.

Could it be that New Zealand’s old friends in Southeast Asia hold the keys to its success in China? They have a deeper understanding of that country than we do. They have both the commercial acumen and capital needed to scale up New Zealand’s strengths in innovation and producing quality products. Best of all, there are many New Zealand-educated leaders in the region who understand both our strengths and limitations, and who want to help.

For New Zealanders looking to find their way down the Silk Road, time in ASEAN developing relationships is likely to be time well spent.

Views expressed in this article are personal to the author.

– Asia Media Centre