Little changes

The good news of the morning was that Jian Yang will be leaving Parliament at the election.  Perhaps the only disappointing aspect is that he didn’t stick around to be voted out, but at least he will be gone, and our Parliament will no longer have a CCP member, former part of the PRC military foreign intelligence system, champion of the evil Party/state in its ranks.   Oh, and someone who acknowledged that he had actively misrepresented his past –  on instructions from his PRC bosses –  to get residency and citizenship here in the first place.  In any decent country he’d not have been in Parliament in for long in the first place –  a decent party wouldn’t have selected him, decent opposition parties would have made his political position untenable, and once alerted to his acknowledged lies about his past the relevant authorities would have acted to prosecute him, perhaps even deport him.  But this is New Zealand.

A party with a modicum of decency, prioritising some values higher than soliciting donations and doing trade deals with a barbaric repressive regime, might even have insisted that Jian Yang step aside when he past become very public.  But this was the New Zealand National Party.

And although Jian Yang is finally going, it appears to have been his own doing.  Perhaps the unease about his past has become such that (a) he could not really hope to go any higher in politics, and (b) his presence was only going to be lightning rod for discontent.   And no serious person was likely to say anything much sensitive in his presence, given his known close ties to the PRC Embassy.  It can’t be that the grind of endless interviews with the critical media wore him out: he’s not given any.   Perhaps he can be more use to National now, bringing in the donations, away from the spotlight of Parliament?

Whatever his reasons, there is not a thing to suggest that it was National that had finally done the decent thing.  After all, recall that a few months ago he was promised one of the list places specially designated by the party’s Board  (recall that he announced that only to the Chinese language media).  Recall too that when Todd Muller took over Jian Yang was pushed a few more places up the caucus rankings, and left in place as chair of a select committee.   And perhaps more telling still, it was only a few days ago that Todd Muller was defending Jian Yang, with arguments so thin they can only have been the words of someone determined to follow in the unworthy tradition of Bill English and Simon Bridges, championing the presence of Jian Yang in Parliament.  There was no sign the party was about to turn him out –  and, of course, Jian Yang has had close ties to the party president Peter Goodfellow, himself as shamefully obsequious to the PRC/CCP as they come.

Here were some of Muller’s remarks reported by Newshub earlier this week.  Asked about Jian Yang’s refusal to answer questions from the English-language media, Muller apparently responded this way

Muller says it’s not true that Dr Yang is avoiding the media because he has fronted on issues to do with statistics.

“He’s done close to 10 in the last 18 months in his role as spokesperson for statistics across all the various media outlets,” Muller told Magic Talk on Monday. “This view that he’s somehow not fronting for media isn’t correct.”

The last time Dr Yang released an English media statement was almost a year ago when Stats NZ’s Chief Statistician Liz MacPherson resigned over the handling of the 2018 Census.

“He’s made very clear statements to the media in the past… He’s statistics spokesperson so I would think that’s fair that when he talks to the media it’s in that context,” Muller said.

Talk about deliberately obtuse.  As Muller knows very well, the legitimate media interest in Jian Yang has nothing to do with Statistics New Zealand (not that he had done that well in that minor role –  has anyone heard anything from him in recent months on the inadequacies of our official statistics?).

Then there was this

Muller said Dr Yang has been transparent about his past.

“He’s been very clear in the past in terms of his history and the length of time he’s been in New Zealand. Obviously one of the key points is when he left the Communist Party, he left 26 years ago. These things tend to want to be trawled over again.”

As Muller knows very well, you don’t just leave the CCP –  especially having worked in the military intelligence system –  by failing to pay the annual membership fee.  And as for the preposterous claim that he had been transparent about his past…….it was only after six years in Parliament and sustained journalistic investigative work that that past was finally revealed to the public.  Since then, Jian Yang has avoided any serious questioning, but simply refusing to engage.  Some transparency.

The article reminds us of Jian Yang’s close ties to Beijing

In October 2019 Dr Yang was one of 50 New Zealanders who were invited to attend the CCP’s 70th anniversary celebrations in the Chinese capital.

He also accompanied former National leader Simon Bridges on a trip to China where a meeting was set up with Guo Shengkun, described as head of China’s ‘secret police’.

Playing down that latter point somewhat; Jian Yang was apparently instrumental in arranging the meeting, such are his ties to the evil regime.

And then Muller’s values-free approach is put fully on display

Muller pushed back against criticism of Dr Yang’s ties to the CCP.

“It’s a massive country for us in terms of trade and relationships and my experience in the context of all the corporate export roles I’ve had is that as you build relationships with people in China, they are members of the Communist Party – that’s sort of how it works, right?

“You end up having conversations and building deep relationships with people who have roles in the Communist Party and China because that’s their system.”

Well, perhaps….but this isn’t Beijing, this isn’t where the writ of the CCP is supposed to run, this is the New Zealand Parliament.

In a way though it is almost a little unfortunate that Jian Yang will soon be gone.  He was the visible and particularly stark tip of the iceberg, but almost beside the point as this late stage.  The real issue is the wider National Party deeply deferential approach to Beijing, and its refusal to make a stand on any issue of the excesses of that regime.   This is the way I put it last week.

The real issue now isn’t about Jian Yang’s own choices, but about the rest of our political system (and much of our media for that matter).   It clearly suits Jian Yang to avoid any English-language media –  he is, after all, elected by all National Party voters, not just a few CCP-aligned ethnic Chinese one – but if the leadership of the National Party had even an ounce of decency on these issues it really wouldn’t be Jian Yang’s choice at all.  It would be as simple as “front up, honestly and fully, pretty whenever you are asked, and if not well forget about any caucus seniority, in fact forget about a list place at all at the next election”.   No one  doubts that if  any of that succession of leaders had wanted Jian Yang to be accountable to the public and to voters he’d do so, or he’d be gone.  So his silence is the silence of Bill English, Simon Bridges and now Todd Muller.   The same “leaders” who’ve been, for example, utterly unbothered by Todd McClay’s defence of the Uighur concentration camps, and who utter not a word about the activities of the PRC/CCP at home, abroad, or here.   Totally sold-out.

Jian Yang might soon be gone, but Todd Muller, Simon Bridges, Gerry Brownlee, Todd McClay and Peter Goodfellow are still very much in place.  There is no sign that the mindset has shifted even slightly.   Quite probably with Jian Yang having gone, National will wheel up another ethnic Chinese candidate whose acceptability will be based on his ties to the PRC embassy and his ability to work the rooms of the various United Front bodies here for party funding, but whose CV will presumably look a bit less obviously egregious than Jian Yang’s came to be.   This is, after all, the party that went soliciting donations for CCP affiliate Yikun Zhang and his mates, and had one of his CCP associates as part of their candidates college, preparing the ground for a bid for a place on National’s list.

It is one of those times when the excesses of the CCP/PRC are becoming ever more obvious to anyone not determined to keep their eyes wide shut.  But there is no sign of any shift in stance from National, no sign of any moral leadership –  in fact, over the last couple of years they’d be the first to complain if the current government, itself not great over the PRC, showed any slight hints of backbone.    This is the disgraceful party that has a senior MP on record suggesting the Uighur concentration camps are no one’s affair but China’s.   These people, and their business/university allies, seem to have no moral core.  Even around Hong Kong we’ve heard only the feeblest, most reluctant, of comments from Muller.

Is there some hope in the fact that Tamaki MP Simon O’Connor is now part of the interparliamentary alliance on China (together with Labour Louisa’s Wall)?  I guess it is better than nothing, but there is nothing anywhere to suggest that the National leadership group is at all happy about such modest independence of thought.   Then again, I’m not aware that any of the media have asked Muller or Foreign Affairs spokesman Bridges what they make of the IPAC and of O’Connor’s membership and calls.  Given that O’Connor is Bridges’ brother-in-law I guess that might be a little awkward.   But it would seem to be a fair question just a few weeks out from an election, as the PRC becomes more aggressive, more threatening (including in their attempts to criminalise anyone anywhere in the world criticising the regime).

It is good that Jian Yang will soon have gone. But the deeper issues around the corruption of New Zealand politics –  National and Labour particularly on this score –  haven’t changed a jot.  Neither party has done anything to fix the electoral donations from CCP affiliates scandal, and both seem more intent on donations flowing than on the sort of values most New Zealanders hold, including the many ethnic Chinese New Zealanders who deplore almost everything to do with the CCP.  And if they are dragged occasionally to utter a mild word of criticism for the latest PRC abuse, you always get the sense it is reluctant, not born of any conviction whatever.

(After 5-6 weeks of ill-health my troublesome bug is finally abating.  However, we’ll be on holiday next week so no more posts until Monday week.)

 

Pursuing Jian Yang, and the travesty that is NZ politics

TVNZ’s Q&A programme yesterday had a short segment (and article here) on their continuing, unsuccessful, attempt to get National list MP Jian Yang to talk to them.  It isn’t as if Jian Yang seems to have a particular thing against TVNZ –  I don’t have too much problem if an MP refuses to deal with one particular media outlet –  because for years now he has refused to talk to any English-language media, talking only to safe CCP influenced or controlled Chinese language outlets, who can be counted on to give him an easy and unchallenging time and not ask any awkward questions.

It is almost three years now since Newsroom and the Financial Times began to reveal Jian Yang’s past as a member of the Chinese Communist Party and long-serving member of the PRC’s military foreign intelligence system, where he’d been training spies.  Over subsequent weeks it emerged that, whether he or not he had been straight with the National Party when they’d recruited him in 2011, he’d lied about his past in his applications for New Zealand residency and citizenship.   In fact, challenged on the point he was quite open about it: he’d actively misrepresented his past because his CCP bosses had insisted on it when he first left the PRC.  And people with his sort of background didn’t get to leave the PRC to do foreign study without the regime and Party being able to rely him.  Jian Yang has claimed he isn’t a CCP member any longer –  as if this was just a matter of letting an annual subscription lapse –  but academic experts, including Canterbury University’s Anne-Marie Brady, have made the case that no one ever leaves the CCP voluntarily: you can be expelled, but once you’ve cast your lot in with them (and only a small minority of PRC citizens are CCP members, smaller than the proportion of Germans who were Nazi Party members) you are part of that movement for keeps.  Jian Yang could, of course, remove the scepticism by openly criticising the evil regime –  former Soviet spies who defected did that –  but never once, in all his years in Parliament has there been as much as a hint of disloyalty to the CCP/PRC.

It was good to see Q&A make a story of Jian Yang’s (now) 2.5 years of refusal to talk to any English language media –  not just about his past, but also about his present (eg his role last year in organising a meeting for Simon Bridges with Guo Shengkun, CCP Politburo member with responsibility for “domestic security” (think of those Uighur concentration camps, as just a start on intensifying CCP repression)).   Or the way Jian Yang continues to associate closely with the PRC Embassy and all sorts of CCP-affiliated or United Front groups, the sort of conduct that had the sober former diplomat Charles Finny declare on Q&A a couple of years ago that given Jian Yang’s associations with the Embassy he was always very careful what he said in front of Jian Yang (or Labour’s Raymond Huo).    Or perhaps it would be good if Jian Yang would answer questions around why several PRC migrants Q&A talked to about him refused to be identified on screen, explaining that they feared the reach of the CCP/PRC whether here or as regards family members back in China.    Perhaps these people have nothing at all to worry about. But they certainly believe the regime is running protection for Jian Yang –  a New Zealand MP.

Q&A also had a brief interview with Jamil Anderlini, the New Zealand who lived for a long time in Beijing and is now the Asian editor of the Financial Times, who claimed not just that our traditional allies look quite askance at the Jian Yang situation –  the man was on Parliament’s Foreign Affairs Committee for a time –  but that his contacts in the CCP suggested that the CCP itself treated the National Party as something of a laughing stock over this issue, the suggestion being something like “useful gullible idiots”.

Back when the Jian Yang story first broke, perhaps one could wonder if National themselves had been deceived by Jian Yang; not looking very hard, they’d not found anything, except someone to pull in the dollars for them.  The Newsroom/FT story broke on the eve of the election and by then there wasn’t much National could do about him (and his list place) even if they’d wanted to.  But that was three years ago.

Even then there was the despicable effort by a then senior Cabinet minister (Attorney General  and minister responsible for the SIS and GCSB) at a candidates’ meeting to tar as somehow “racist” any questions about Jian Yang’s CCP/PLA past, going on to claim that Anne-Marie Brady was a xenophobe (“doesn’t like any foreigners at all”).

But it wasn’t just  a second-tier figure, perhaps caught on the hop in a meeting he didn’t really want to be at.   In the last three years, National has had three leaders:  Bill English (who was then Prime Minister), Simon Bridges, and now Todd Muller.    They’ve each had plenty of time to think carefully and hard about Jian Yang and where their interests and loyalties lie.  And each of them  –  there is nothing to tell them apart on this issue –  has provided complete cover for Jian Yang.   In fact, Jian Yang has been promoted.  He clearly isn’t a caucus highflier, but he keeps rising a bit further up the caucus rankings, he now chairs a parliamentary select committee (perhaps not a very important one, but we have someone with his background chairing a government administration committee?) and the National Party Board has picked him out for a favoured position on National’s list for this year’s election (recall that Jian Yang has business interests with National’s president, the ever-obsequious (to Beijing) Peter Goodfellow).  One of National’s most senior MPs shares an office in Auckland with Jian Yang.

The real issue now isn’t about Jian Yang’s own choices, but about the rest of our political system (and much of our media for that matter).   It clearly suits Jian Yang to avoid any English-language media –  he is, after all, elected by all National Party voters, not just a few CCP-aligned ethnic Chinese one – but if the leadership of the National Party had even an ounce of decency on these issues it really wouldn’t be Jian Yang’s choice at all.  It would be as simple as “front up, honestly and fully, pretty whenever you are asked, and if not well forget about any caucus seniority, in fact forget about a list place at all at the next election”.   No one  doubts that if  any of that succession of leaders had wanted Jian Yang to be accountable to the public and to voters he’d do so, or he’d be gone.  So his silence is the silence of Bill English, Simon Bridges and now Todd Muller.   The same “leaders” who’ve been, for example, utterly unbothered by Todd McClay’s defence of the Uighur concentration camps, and who utter not a word about the activities of the PRC/CCP at home, abroad, or here.   Totally sold-out.

It is a marker of just how deep the decline of New Zealand has become.  As I noted in a post shortly after the first Jian Yang revelations,  at no time from the 1950s to the 1980s would it even be conceivable that we’d have (any of the mainstream parties would have) allowed a former KGB/GRU officer, still maintaining close ties to the Soviet Embassy, to have served in our Parliament.  There was some moral clarity back then about what we believed and stood for, and what that evil empire stood for. (Of course, Labour in particular tolerated Bill Sutch in top positions).

But now whatever values some individuals may perhaps still have, they seem to count for less than appeasing the CCP/PRC, and prioritising party funding and the interests of a small group of New Zealand corporates (and universities) over the values of most New Zealanders.  I’m particularly hard on National, both because Jian Yang is National MP and because I’m the sort of person who might normally be expected to mostly vote National.  But also because all three of those recent National leaders have suggested that, in one form or another, they are Christians –  English at least was known to be a practising Catholic.  The PRC regime ruthlessly persecutes the Christian churches, and yet that draws forth not a word from either the senior figures in the National Party or from the lesser lights among the Christian members of the caucus (let alone prominent incoming ones like Luxon, who ran a business that chose to pander to the regime).   The persecution of the churches has not yet reached the stage of the Uighur concentration camps, but then National members won’t stand up or speak out on that either –  not even junior MPs who might be plausibly deniable for the leadership.

But it isn’t just National.    Every other party in Parliament (and those out of Parliament) seem about as bad.  The biggest of those parties is, of course, Labour.  A Labour member has been Prime Minister almost ever since the first Jian Yang revelations.  And not a word of condemnation or complaint has come from her either, not one.  No Labour MP has ever been heard to deplore the fact that we had a CCP member closely linked to the PRC Embassy sitting on the National benches of Parliament, chairing a select committee no less.  It is as if the Prime Minister is more interested in being kind to Jian Yang, kind (subservient) to Madame Wu, and utterly interested in the integrity of New Zealand politics or the values and political traditions of New Zealand.  And again, not even any junior caucus members have broken ranks, not even once.   The strong suspicion has to be that Labour cares no more about decency and integrity than National, and is probably just a bit envious that National has been better at pulling CCP-linked donations (although is that changing now that Labour is in office?) And why be surprised? After all, Labour has Raymond Huo in its ranks, with well-documented United Front involvements, and they just put another United Front person in a winnable position on their list.  And all those corrupted corporates and universities, only interested in the next dollar, will be in the ear of ministers urging them always to appease, never to take a stand.  And of course, National and Labour together have shown no interest in any serious reform of the electoral finance laws to meaningfully prevent foreign political donations, let alone the sort of self-denying ordinance that recognises that some donations –  even from New Zealand citizens –  simply should not be taken, no matter how many dollars are on offer.  And Labour was principally responsible for the travesty of the select committee inquiry on foreign interference risks (even though the biggest issue is less about foreign interference, and more craven domestic subservience).

The big issue isn’t really Jian Yang.  National could have found a way of quietly getting him to retire and found some less obviously egregious replacement.  The bigger issue is that National had no interest in doing so, and Labour no interest in criticising them for not doing so.  They pay no price for acting as, in effect, the agents of the CCP in New Zealand (even as they all no doubt tell themselves that somehow what is in their best interests is also in ours).   It was good that Q&A did the clip they did, but it is hardly mainstream TV (the programme mainly for the handful of political junkies).  Other journalists have from time to time asked Jian Yang for an interview, and been equally unsuccessful, but there is almost never any follow through. The PM and the Leader of the Opposition front up for media interviews every week, perhaps even most days, and there is no pursuit of this issue, there is no campaign in the pages of the Herald or the Stuff outlets.  Nothing.  The evils of the CCP/PRC just isn’t one of those things that exercises or concerns establishment New Zealand.  It is disgraceful.

A few weeks ago the Inter-Parliamentary Alliance on China was launched, comprising legislators from a range of western countries with concerns about the PRC, and from a range of places on the usual left-right political compass.   This was from their website

Developing a coherent response to the rise of the People’s Republic of China (PRC) as led by the Chinese Communist Party is a defining challenge for the world’s democratic states. This challenge will outlast individual governments and administrations; its scope transcends party politics and traditional divides between foreign and domestic policy.

The assumptions that once underpinned our engagement with Beijing no longer correspond to the reality. The Chinese Communist Party repeatedly and explicitly states its intention to expand its global influence. As a direct result, democratic values and practices have come under increasing pressure.

When countries have stood up to Beijing, they have done so alone. Rather than mounting a common defence of shared principles, countries have instead been mindful of their own national interests, which are increasingly dependent on the People’s Republic of China for crucial minerals, components, and products.

No country should have to bear the burden of standing up for fundamental liberties and the integrity of the international order by itself.

The Inter-Parliamentary Alliance on China has been created to promote a coordinated response among democratic states to challenges posed by the present conduct and future ambitions of the People’s Republic of China. We believe that the natural home for this partnership is in the freely elected national legislatures of our peoples. Coordination at this level allows us to meet a challenge that will persist through changes in individual governments and administrations. We firmly believe that there is strength in unity and continuity. By developing a common set of principles and frameworks that transcend domestic party divisions and international borders, our democracies will be able to keep the rules based and human rights systems true to their founding purposes

It was sadly notable that at the launch there were no New Zealand MPs, even though (so Anne-Marie Brady reported) numerous of them had been approached.    It was interesting, and perhaps a little encouraging, that last week Simon O’Connor (from National) and Louisa Wall (from Labour) joined this initiative.  O’Connor is currently chair of Parliament’s Foreign Affairs Committee and Wall is a member.

But count me more than a little sceptical.   It has the feel of some sort of deal worked out between National and Labour, for a bare minimum degree of association, announced belatedly.   There is no statement from O’Connor or Wall about the nature of their concerns with the PRC –  at home, abroad, or here –  and, of course, no journalist appears to have asked them for comment (or reported a refusal to comment).   Is O’Connor really comfortable with having a CCP affiliated member, close to the PRC Embassy, who refuses to engage with voters or the media, and who has never ever said anything remotely critical of the PRC as a member of his caucus, someone who could be a junior minister if National is elected?  MPs are usually only too ready to criticise people on the other side.  How comfortable is Wall about Jian Yang or National’s extreme deference?  Or has the Labour Party hierarchy told her to simply sign up and then keep very quiet?  I’d like to be wrong on this  –  I was briefly encouraged by the O’Connnor/Wall news –  but so far there is nothing to suggest I am.

 

Weighed in the balance

The feckless leadership of this country heading into the deepening coronavirus crisis has been pretty astonishing to behold.  Of course, there is the Governor of the Reserve Bank (and his statutory MPC offsiders), whose complacent utterances and utter inaction have been well-documented here this week.   And there is the Ministry of Health which has been actively discouraging people from stocking their pantries, constantly talking down any areas of concern, refusing to seriously engage with the public on the worsening overseas situation (including Australia, with whom we share a fairly open border) and is still telling us the risks of community outbreak are low.  This was still on their website a short time ago

MOH virus

(And when a reader asked the Ministry of Health for the justification for this stance, the only reply he got was along the lines of “we clear all our statements with clinicians” , as if these anonymous “clinicians” are different from people in any other field of expertise, where there will be a wide range of views, particularly amid extreme uncertainty. )

And then of course, there is the Prime Minister and the Minister of Health. The latter, despite being an elected politician, simply seems to channel his officials –  and perhaps only in the aftermath when all the OIAs are in will we know whether officials are tailoring their stance to suit ministers, ministers are so incurious as not to ask the hard questions, or both.

But in a crisis the focus should naturally fall on the Prime Minister.  It is for rare events of this sort of magnitude that we elect people who purport to be leaders.  But again we’ve just had constant minimisation, “pat on the head –  there, there” idle reassurances,  and a sense of always dithering and being behind the play.  There is no sense that our Prime Minister has any conception as to just how bad the global situation is getting, how serious the Australian situation is becoming, or any willingness or ability to articulate a coherent alternative view (if she has really thought hard enough to come to one).  There is no fronting the public about how no health system can adequately cope with large outbreaks, and only last week in Parliament she was still trying to play down the prospect of even a mild recession in New Zealand.  More recently, nothing serious has been heard confronting the very serious economic dislocation we face, whether or not the happy talk from her and her officials re low risk of community outbreak happens to come to pass.

Who knows why?  People speculate that it is all about the Christchurch commemoration –  whether for cynical reasons or because some short-term empathy with those victims has totally distracted her from a focus on the much larger threat that is now about to overwhelm us, and for which she –  as Prime Minister –  can actually affect outcomes.  But whatever the explanation it is pretty inexcusable to have a “leader” so totally in reactive minimisation, avoiding fronting with the public, mode.

But not to divert too long or too far from the main focus of this blog – economics and economic policy – I thought it might it would be good to give some coverage to some survey results out this morning, asking leading economists in both the US and Europe about the outlook.

The virus situation in Europe is currently worse than that in the US, so lets look at the European results first.

europe igm corona

Weighted by expertise, 82 per cent of respondents expect a “major recession” (none of the silly debate that still seemed to be in focus in New Zealand even last week as to whether we’d have two slightly negative quarters).

And although for most macro policy purposes, it doesn’t much matter whether the disruption is coming from the demand or supply side (contra the Reserve Bank public handwringing), 47 per cent think the main effects will be coming from the demand side.  Only 12 per cent disagreee.

(In New Zealand, so far, there is little doubt that almost all the effects we’ve seen have been demand-side ones –  reduced (mostly foreign) effective demand for our goods and services.)

And here are the US results

US igm panel corona

Not quite as bleak –  yet –  but almost.

The release doesn’t say when exactly the survey was taken, although I’m guessing very recently.

There is not a shred of reason to believe that the New Zealand situation will be any different, and that would be so whether or not we somehow manage to avoid community outbreak (I’m sceptical, but I guess we should always allow for the possibility the Ministry might be right).   Much of the world economy is now shutting down –  perhaps not for long, but no one can be sure of that – in a way for which there is almost certainly no modern (post Industrial Revolution) precedent.

And yet you still hear nothing of this from our Prime Minister, our Minister of Finance (let alone our central bank – and numerous senior central bankers have been choosing to talk in public this week).  It is simply irresponsible, if they realise, not to be fronting the issue and offering honest leadership. If they still don’t realise, it is simply inexcusable, and not one of them would then be fit for the offices they hold.  Crisis reveal whether those holding office are really leaders: at present you could really only say of ours, weighed in the balance and found wanting.

Perhaps they will all yet redeem themselves.  We must hope so, as a matter of urgency.

 

Jami-Lee Ross’s speech

A couple of weeks ago I wrote the National Party, Jami-Lee Ross, and the party’s funding from PRC-linked sources.  Of Jami-Lee Ross –  and the desire of some in the media (and, of course, the National Party) to pile on to him, or to gloat – I wrote

Whistleblowers have a wide variety of motives, and not all of them are noble –  and even those with elements of nobility are not infrequently tinged with more than a little of the less savoury side of things.   And yet we rely on whistleblowers to uncover lots of wrongdoing: in specific circumstances, we even have statutory protections for them  (but whistleblowing often comes with costs to the whistleblower, perhaps especially if they themselves have been directly involved in the alleged wrongdoing).

and

Perhaps he just generally was not a very nice or admirable person –  there are, for example, those reports of his flagrant, repeated, violations of his marriage vows etc.  But the fact remains that this wrongdoing (as alleged by the prosecutors for the SFO) would not be known had Ross simply stayed silent, whether that had involved continuing his efforts to climb National’s greasy pole, or just moving on quietly.     Either might have suited the National Party.   But it isn’t clear why such silence – about these specific donations, or about his involvement with others (Todd McClay and the PRC billionaire) that aren’t illegal but aren’t universally regarded as proper either – would have been in the wider public interest. 

and

And to Ross’s credit, since the story first broke (and all the drama of that time) Ross does seem to made some effort to contribute constructively to the public debate on some of the policy issues around donations to political parties.  He participated in the Justice committee’s (rather lame) inquiry into foreign interference, and spoke very forcefully in the House when the government was pushing through its travesty of a foreign donations law in December (the one that accomplished almost nothing useful,but perhaps looked/sounded to some like action).    Who knows quite what mix of motivations he has.  Perhaps some desire to bring down the existing National Party leadership (in Parliament and outside) with whom he previously worked so closely.   Perhaps some element of genuine remorse, or recognition of how far he himself had been part of the system degrading.    In a way, his motives don’t matter –  it is the facts and the merits (or otherwise) of his arguments. 

We heard from Ross again this week.  Or, strictly speaking, Parliament did.  Few of the general public will have heard of his speech or, more particularly, its contents.  From what I could see there was very little media coverage –  I should have been able to say “astonishing little” but, sadly, there wasn’t much astonishing about the relative silence of our media and the complete and utter silence of the rest of our politicians and political class.   All of them appear to prefer to look the other way, and wish the issue would simply go away, whether for fear of upsetting Madame Wu and the PRC, upsetting the CCP’s local associates, or of revealing to the public just how tawdry and sold-out to Beijing’s interests so much of our politics seems to have become.

I could just link to the speech, but not many people click through to links.   So here, as permitted by Parliament, is the whole thing.  It isn’t long. I encourage you to read and reflect on it

JAMI-LEE ROSS (Botany): Facebook memories reminded me this morning that today marks nine years since I was first elected to Parliament. I certainly never expected nine years ago that I would be the centre of a debate over foreign political donations, and I’m using that term deliberately. Foreign political donations and foreign interference is what I want to focus my time on here.

In the Prime Minister’s statement, that we are debating, the Prime Minister lists as one of her Government’s achievements the banning of foreign political donations. It’s true that the new $50 threshold for overseas donations is an improvement. But, as I’ve said previously in the House, I doubt it will do very little to deter those determined to find other ways around the ban, including—

SPEAKER: Order! Mr Jackson leave the House.

JAMI-LEE ROSS: —using the wide open gap we still have where foreign State actors can funnel funds through New Zealand registered companies.

The foreign donation ban is one of the few recommendations that has spun out of the Justice Committee’s inquiry into foreign interference activities in New Zealand elections. That has been picked up. Probably the most important submissions that we received through that inquiry were those from Professor Anne-Marie Brady of Canterbury University and what we heard from the Security Intelligence Service (SIS) director, Rebecca Kitteridge. It was all eye-watering and eye-opening stuff and sobering for us to hear and read their evidence. We have not, and I think we still do not, take seriously enough the risk of foreign interference activities that we’ve been subjected to as a country. Ms Kitteridge rightly pointed out in her evidence that the challenge of foreign interference to our democracy is not just about what occurs around the election itself. Motivated State actors will work assiduously over many years, including in New Zealand, to covertly garner influence, access, and leverage.

She also specifically pointed out the risks we face from foreign State actors through the exertion of pressure or control of diaspora communities and the building of covert influence and leverage, including through electoral financing. After Pansy Wong resigned from Parliament, I was selected as the National Party candidate for the 5 March by-election nine years ago. It was made very clear to me at the time that I had to put a big emphasis on getting to know the Chinese community. It was also pointed out to me very early on that I must make good connections with the Chinese consul-general. Madam Liao at the time was very influential with Chinese New Zealanders, and important to my own success as well. In hindsight, it was naive of me to not think carefully about the pull that a foreign diplomat had on a large section of the population in my electorate.

The consul-general in Auckland is treated like a God, more so than any New Zealand politician, except probably the Prime Minister of the day. Each successive consul-general seemed to be better and more effective at holding New Zealand residents and citizens of Chinese descent in their grasp. Consul-generals Niu Qingbao and Xu Erwen were also treating us, as MPs—not just myself, others—as long-lost friends. All this effort, if you read Professor Brady’s paper called Magic Weapons, is a core plank of the Chinese Communist Party’s deliberate and targeted efforts to expand political influence activities worldwide. It’s also the very risk that Rebecca Kitteridge warned the Justice Committee about. Professor Brady’s paper is a 50-page academic work. I can’t do it justice here, but I recommend all MPs read it.

The activities of the Chinese Communist Party here domestically, where Chinese New Zealanders have been targeted, should be concerning enough for all of us. But the efforts that Chinese Communist Party – connected individuals have been making over the years to target us as politicians, and New Zealand political parties, also needs to be taken seriously. Every time we as MPs are showered with praise or dinners or hospitality by Chinese diplomats, we’re being subjected to what Professor Brady calls “united front work”. Every time we see our constituents bow and scrape to foreign diplomats, it’s a result of their long-running efforts to exert influence and control over our fellow Kiwis.

Both Professor Brady and director Kitteridge have warned about the risk of foreign interference activity where funding of political parties is used as a tool. This isn’t necessarily unlawful provided the donations meet the requirements of the Electoral Act. In 2018, I very publicly made some allegations relating to donations. I have said publicly already that the donations I called out were offered directly to the leader of the National Party at an event I was not in attendance at. I did not know at the time that those donations were made that they were in any way unlawful. I never had any control over those donations and I have never been a signatory of any National Party bank account in the time that I’ve been an MP. I never benefited personally from those donations. I was never a part of any conspiracy to defeat the Electoral Act. And the point at which I blew the whistle on these donations—first internally, then very publicly—that point came after I learned new information that led me to question the legality of the donations.

After raising these issues publicly, they were duly investigated first by the police and then the Serious Fraud Office. The result of those allegations is already public and I can’t traverse much detail here, but I will say that I refuse to be silenced and I will keep speaking out about what I know, and have seen, goes on inside political parties. I refuse to be quiet about the corroding influence of money in New Zealand politics.

Last year, I learnt, off the back of concerns I myself took to the proper authorities, that the National Party had been the beneficiary of large amounts of foreign donations. These donations are linked back to China and linked to the Chinese Communist Party, and with ease entered New Zealand. I didn’t go searching for this information. I was asked if I knew anything of the origins of the donations. I didn’t know. It was all new information to me, and I was surprised by what I learnt.

What I learnt was that large sums of money adding up to around $150,000 coming directly out of China in Chinese yuan over successive years ended up as political party donations. Two individuals, _________, were used as conduits for the donations.

These funds eventually made their way to the New Zealand National Party. The New Zealand National Party still holds those funds. The National Party is still holding at least $150,000 of foreign donations received in two successive years. I call on the National Party to return those foreign donations that it holds or transfer the money to the Electoral Commission. I doubt the National Party knew at the time that the money was foreign—I certainly didn’t either—but now that they will have that information to hand, they need to show leadership and do the right thing.

To avoid doubt, this $150,000 dollars’ worth of foreign donations is not the same as the $150,000 from the Inner Mongolia Rider Horse Industry company that they raised last year.

The warnings sounded from academics and spy agencies are not without reason. These two examples I give are very real examples of foreign money that has entered New Zealand politics. Professor Brady, with reference to the list of overseas members of the overseas Chinese federation, which is part of the Communist Party’s infrastructure, listed three top united front representatives in New Zealand:

_____, _____, and Zhang Yikun. All three are well known to political parties.

In a recent press statement from a PR agency, representatives of Zhang Yikun highlighted the philanthropic approach that he takes in New Zealand. The press statement on 19 February specifically said that he has been “donating to many political parties and campaigns.”, except his name has never appeared in any political party return. When asked by the media if political parties had any record of donations from this individual, all said no. But a quick search online will find dozens and dozens of photos of Zhang Yikun dining with mayors and MPs over the time, inviting them to his home, and his recent 20th convention of Teochew International Federation had a who’s who list of politicians turning up, including a former Prime Minister.

The foreign donations I mentioned earlier all have connections to the Chao Shan General Association. The founder and chairman of Chao Shan General Association is Zhang Yikun. To summarise these two bits of information, the largest party in this Parliament has been the beneficiary of large sums of foreign money. That money is linked to an individual who was listed as one of the top three Chinese Communist Party united front representatives in New Zealand. That individual’s PR agents say he has donated to many political parties and campaigns, yet he’s never showing up in any donation returns in the past.

One of Professor Brady’s concluding remarks in her submission to the Justice Committee was that foreign interference activities can only thrive if public opinion in the affected nation tolerates or condones it. We must not tolerate or condone any foreign interference activities. We must also not stay silent when we see problems right under our nose. It’s time for the political parties in this Parliament to address seriously the political party donation regime that we have.

I realise that both the two main parties in this Parliament often have to agree, but perhaps it’s time to put that out to an independent body. It’s too important for us to ignore, and it’s not right that we should allow these things to go on under our nose.

I seek leave to table two charts that show a flow of money from China into New Zealand and to the New Zealand National Party.

SPEAKER: I seek an assurance from the member that these charts are not integral to any matter currently before the courts.

JAMI-LEE ROSS: These charts have been prepared by the Serious Fraud Office and I cannot give you that assurance.

SPEAKER: You cannot give me that assurance. Well, I’m not going to put the question.

Source: Office of the Clerk/Parliamentary Service. Licensed by the Clerk of the House of Representatives and/or the Parliamentary Corporation on behalf of Parliamentary Service for re-use under the Creative Commons Attribution 4.0 International licence. Full licence available at https://creativecommons.org/licenses/by/4.0/.

Anne-Marie Brady fills in the gaps –  names – Hansard chose to omit from Ross’s speech.

I thought three things were particular interesting in what Ross said:

  • the explicit guidance given to him as a new candidate/MP about currying favour with the PRC Consul-General et al,
  • the allegation about the new large, apparently disclosed, donation from people with very strong PRC/CCP ties
  • and the suggestion, not verified in what we have there (tho perhaps in that SFO schematic he tried to table) of the funds for these donations having come initially from the PRC  (whether or not National initially knew that).

Quite possibly, none of that activity was illegal.  But even if so, none of it is proper –  at least in a political party that cares anything about the values and interests of the vast mass of New Zealanders.  Then again, this is the same party that just re-selected the former PLA intelligence trainer, (former?) CCP member, clearly still in the very good graces of Beijing, Jian Yang for their list –  the same MP who refuses to face questions from the English langauge media in New Zealand, the same MP in business with the party president who himself has been free with his praise of tyrants of Beijing.

But just as bad is the apparent determination of ever other political party –  but most especially Labour, the alternative main party –  to simply ignore all this. In some cases, perhaps, to envy National’s ‘success’ (until now).   Where is the leader of the Labour Party on these issues (you know her, she happens to be the Prime Minister).   Where are the Greens, who once could have been counted on to deplore this sort of thing?   Where, even, are the tiddler parties trying to convince us they offer something different and better than National and Labour?  ACT?  TOP?  New Conservative?  Maori?  Not a word.

I’m sure there is some sensitivity about not jeopardising the prospects of a fair trial in the specific cases the SFO has taken against three donors and Ross himself.   But there is no way that is anything like the whole story.   After all, all those other parties have been very very quiet on the Jian Yang story, ever since the first of it broke 2.5 years ago.  Prominent National and Labour figures, including Jian Yang, got together to have the Crown honour Yikun Zhang for, in effect, services to Beijing only 18 months ago.  There has been no action on closing the legal window for donations through companies owned by foreigners, let alone the (im)moral window that has had NZ citizens who are CCP affiliates donating heavily.  I’m quite prepared to believe that National is deeper in all this stuff than the other parties, but those other parties lose any excuse, any sympathy, when –  most especially the Prime Minister –  simply sit quiet and walk on past. In doing so, they demonstrate their own standards –  or lack of them.

It certainly is important to ensure a fair trial. But voters are also entitled to a fair election, where the sorts of material Jami-Lee Ross has highlighted, allegations made, are properly scrutinised and the actions of parties and key individuals contesting the election are put under the spotlight before the election.  The trial isn’t going happen before then, Simon Bridges refuses to answer even basic factual questions, and the media and his political opponents seem happy to just let it pass.   That is little more than a betrayal of the public interest.

 

Preferring to look the other way

It was remarkable to pick up the Herald yesterday and find their coverage of the SFO prosecutions over the donations to the National Party given over to some “gotcha” attacks on Jami-Lee Ross.    The huge headline is “Own Goal” and the next level down is “Jami-Lee Ross’ spectacular political faux pas”.   Almost as if it were some sort of National Party newsletter.

Three things struck me about the Herald’s coverage (and, as far as I could see, other mainstream media were not that much different).

The first was that this jeering at Jami Lee-Ross’s comeuppance seems a weird approach for a major media outlet to take, when we’d not have known anything about the events now subject to prosecutions on serious charges without Jami-Lee Ross’s disclosures.  There was certainly no sign the Herald had been getting to the bottom of the issues.   Whistleblowers have a wide variety of motives, and not all of them are noble –  and even those with elements of nobility are not infrequently tinged with more than a little of the less savoury side of things.   And yet we rely on whistleblowers to uncover lots of wrongdoing: in specific circumstances, we even have statutory protections for them  (but whistleblowing often comes with costs to the whistleblower, perhaps especially if they themselves have been directly involved in the alleged wrongdoing).

I guess I could understand the attacks at Ross’s expense had he, prior to all this coming out, been a longstanding public campaigner for clean elections, transparent financing of political parties, keeping foreign influence out of politics etc etc.   The (apparent) hypocrisy would be stunning –  akin to, for example, the morals campaigner caught in an extra-marital affair.   But that wasn’t Ross.  Did anyone ever mistake him for the moral face of politics when he was rising rapidly up the ranks of the National Party?

Perhaps he just generally was not a very nice or admirable person –  there are, for example. those reports of his flagrant, repeated, violations of his marriage vows etc.  But the fact remains that this wrongdoing (as alleged by the prosecutors for the SFO) would not be known had Ross simply stayed silent, whether that had involved continuing his efforts to climb National’s greasy pole, or just moving on quietly.     Either might have suited the National Party.   But it isn’t clear why such silence – about these specific donations, or about his involvement with others (Todd McClay and the PRC billionaire) that aren’t illegal but aren’t universally regarded as proper either – would have been in the wider public interest.  Unless, somehow, all that now matters to the New Zealand elite (political, media or whoever) is maintaining that veneer of cleanness, even when they know the substance has become very different.

Perhaps some of the jeering might have seemed reasonable to some back in late 2018 when the story first broke.  But the SFO clearly seem to think there is enough evidence that makes it worth a severely resource-constrained organisation actually laying charges on points of substance.  It doesn’t have the feel any longer of something just relying one (motivated) individual’s words.

And to Ross’s credit, since the story first broke (and all the drama of that time) Ross does seem to made some effort to contribute constructively to the public debate on some of the policy issues around donations to political parties.  He participated in the Justice committee’s (rather lame) inquiry into foreign interference, and spoke very forcefully in the House when the government was pushing through its travesty of a foreign donations law in December (the one that accomplished almost nothing useful,but perhaps looked/sounded to some like action).    Who knows quite what mix of motivations he has.  Perhaps some desire to bring down the existing National Party leadership (in Parliament and outside) with whom he previously worked so closely.   Perhaps some element of genuine remorse, or recognition of how far he himself had been part of the system degrading.    In a way, his motives don’t matter –  it is the facts and the merits (or otherwise) of his arguments.  No one appears to have contested the facts around the Todd McClay/billionaire donation.  Few appear willing to openly champion the current law which allows tightly-held foreign-owned New Zealand registered companies to donate freely to our political parties (even as none of the parties is willing to end that provision).    Ross’s call –  having been a key figure in the alternative model in recent years –  that only those registered to vote in New Zealand should be able to donate is a constructive contribution to the debate on our future laws (one I happen to agree with, but that isn’t the main point here).

In many ways, Ross seems an unsympathetic character –  down to and including the claims about whether he had ever wanted his name suppressed  – but when alleged serious wrongdoing is only brought to light by the voluntary choices of one individual (however self-destructive some of those choices might also be for now), there is something a bit tawdry and desperate about media kicking the man when he is down.  Better, surely, to encourage Ross to tell us all he knows –  and then test and scrutinise such claims/records –  whether or not particular actions happen to skirt inside current law or pass to other side of the law.

Perhaps the second thing that struck me was how little all of the coverage tied back to the National Party.   Jami-Lee Ross was re-elected to Parliament at the 2017 election under National’s imprimatur, and he was hardly a peripheral figure.  In fact, he’d risen quite rapidly and might have seemed to be a face of the future.  He was Chief Whip, and then was moved further up into senior spokesman roles.  Most likely, he’d have been a Minister of the Crown had National remained in office after 2017.  The (alleged) donation splitting occurred both when National was in office (under Bill English) and while it was out of office (under Simon Bridges).   Not only had Bridges promoted him, but read the transcript of one of those calls between the two of them  –  only a few months before all this became public –  and this clearly wasn’t someone on the outer with the leadership, no matter how quickly they later jettisoned him (while still trying to pretend nothing was wrong).

Before the names of those being charged become public, National had sought to distance itself with a statement welcoming the fact that no one now involved in the National Party had been charged.  But it doesn’t really wash does it, when (mostly from that transcript)

  1. the donations involved were to the National Party,
  2. the recipient of the donation (the Botany National Party account), and liaison with the donors, was a front-bench National MP,
  3.  one of those charged had hosted Bridges and Ross to dinner at his house, and Bridges was planning to host him for dinner at his own house (with Ross also to be invited),
  4.  one of the others of those charged was quite openly being championed for a place on the National Party list, and –  we are told –  had put his name in to go through National’s “candidates’ college” –  which presumably would require either prior party membership or some high level support from somewhere in the party,
  5. one of those charged had been nominated not long previously for an honour by another National MP.

Very conveniently, National is now saying nothing further on the grounds that “the matter” is before the courts.   And isn’t it convenient for them, in an election year, that the justice system works so very slowly that the cases are unlikely to come to trial before the election (and then, of course, we’ll have excuses about rights of appeal etc).   The defendants are entitled to a fair trial, but the public –  voting just a few months from now –  is also entitled to some straight answers from National and its leaders.

I’m not here taking a view on whether Bill English or Simon Bridges (or perhaps John Key before them) knew about the specific transactions and conduct over which the four individuals have been charged, in ways that might render them liable themselves to prosecution.  Who knows  (perhaps Ross, but he has yet to produce firm proof).  And frankly, I’m less interested in prosecutions as such, than in the underlying culture and conduct.  And there it is very hard to believe that the party leaders (in Parliament and outside) were somehow oblivious to that, especially when a rising MP is involved.  Organisations are rarely like that, when something pretty central (for a political party these days, fundraising) is involved, even if key people sometimes deliberately refuse to inquire more deeply into methods, lest that knowledge prove awkward.

This is the bit from the transcript that struck me

JLR: [laughs] Hey um you know at Paul Goldsmith’s function you saw those two Chinese guys, Zhang Yikun and Colin? You had dinner at their home?

SB: Yes.

JLR: They talked to you about a hundred thousand dollar donation –

SB: Yep

JLR: That is now in.

SB: Fantastic

and, a little later,

JLR: Donations can only be raised two ways – party donation or candidate donation. Party donation has a different disclosure which is fine, and the way they’ve done it meets the disclosure requirements – sorry, it meets the requirements where it’s under the particular disclosure level because they’re a big association and there’s multiple people and multiple people make donations, so that’s all fine, but if it was a candidate donation it’s different. So making them party donations is the way to do it. Legally, though, if they’re party donations they’re kind of under Greg’s name as the party secretary, so –

Bridges doesn’t challenge, dispute, express surprise or anything here. The conversation just moves on.

It just beggars belief that Bridges did not know that what was being talked about here was, at very least, sailing extremely close to the legal line.   Note that “hundred thousnad dollar donation” and the description “it meets the requirements where it’s under the particular disclosure level because they’re a big association and there’s multiple people and multiple people make donations”.     No talk of 20 people independently chipping in and the total happening to come up to $100000, no talk of an aim that a group might look to raise something like $100000 –  but explicit prior talk (with a key figure being someone we are told does not speak English) about “a $100000 donation”  –  a description Bridges clearly recognised –  and then once the money is in talk about how “it” meets the requirements.   Bridges either knew/realised, or actively preferred not to.  Neither should be acceptable in someone who wants to be Prime Minister.

It is remarkable that Bridges is not facing more scrutiny, relentlessly, whether from the media (every time he faces the media), in Parliament, or from other political parties more generally.   Even just straightforward questions like were any of the other defendants (notably Colin Zheng) ever National Party members, for how long, when did that membership cease?   Have other caucus members dined privately with any of the other three defendants?  What exact role does the leader play in party fundraising?  And so on.

(For the record, and in case it has not long been clear, while this particular issue involves the National Party, I have no unusual animus towards them –  except perhaps as a party for whom a social conservative pro-market middle-aged person might more normally be inclined to vote for.)

The third aspect of the coverage that I find perhaps most troubling is the near-complete media silence on the connections of one of the defendants, the Auckland businessman Yikun Zhang. These are issues which have no direct bearing, it would appear, on the cases to come before the courts, and yet nothing.

It isn’t as if Yikun Zhang is some independent and private individual who just happened to one day invite the Leader of Opposition (and his senior offsider Ross) home to dinner and out of the goodness of his heart popped a modest donation into the National Party account.   Apart from anything, media reports of a statement issued on behalf of the defendants suggests they claim to have given to various different parties (a point which really should be verified).  But when you don’t speak English, you don’t invite senior politicans home for dinner –  let alone welcome an invitation to dinner at the Leader of the Opposition’s (no doubt much less fancy –  as Bridges says, less-good wine) house – for the quality of the sparkling intellectual debate around, policy, political philosophy or the mechanics of government.

This rather is someone who seems to assiduously cultivate associations –  how much substantive, how much photo-op isn’t clear –   with almost anyone in New Zealand political circles.   Before his background was widely known, he pops up in photos with Andrew Little, Jacinda Ardern, Raymond Huo, Phil Goff, Paula Bennett, Simon Bridges, Jami-Lee Ross, Jian Yang, Simeon Brown, Paul Goldsmith and more.     He was nominated for his 2018 Queen’s Birthday honour –  conferred under Labour, initiated (we are told) under National – with nominations from prominent National and Labour politicians.   Not the sort of thing that happens to your run-of-the-mill community-oriented private citizen.

Yikun Zhang’s net stretches more widely: there are the ties to the Gary Tong, Mayor of Southland, which came to light a couple of year ago.   Tong went to China with Yikun Zhang.  Not a typical connection for a businessman with an Auckland construction company. [UPDATE: Anne-Marie Brady reminds us of this interview with Gary Tong, acting as some sort of mouthpiece for, and defender of, Yikun Zhang in 2018.]

And what of Yikun Zhang’s associations back in the PRC?    Auckland ethnic Chinese writer Chen Weijian documented those a couple of a years ago.  I wrote about it here, where I observed

On my reading, the author’s key point is that the evidence of Zhang Yikun’s close association with the Chinese Communist Party, and the high regard in which he is held by the Party, is crystal clear.  Among that evidence is his very rapid ascent in various significant organisations that are part of the party-state’s overall United Front programme.

and there is a translation of the original article here.  None of this seems to have been disputed.  It looks a lot as though Yikun Zhang’s principal orientation –  despite now being a New Zealand citizen (how do we let people become citizens when can’t speak English – or, presumably, Maori?) is to the CCP/PRC.     Since then specialist China commentators have further highlighted the prominent position Yikun Zhang has in the regime’s United Front activities, advancing the interests of the CCP at home and abroad.  (There is no suggestion that any of this is illegal.)

All this became public knowledge more than a year ago.  You’d have hoped that political leaders would have done due diligence on people their leaders are regularly photographed with, but even if they’d chosen to keep their eyes wide shut before late 2018, they had no such excuse since.

And yet remarkably, even after the material about his background, even after the allegations re donations emerged, there is little or no sign that either side of politics has become warier of Yikun Zhang.   One of his big activities last year was the international conference for a grouping of people from the area he originally came from in China, which was held in Auckland.

He’d managed to get the National Party’s president –  known for his past praise of the PRC regime and of Xi Jinping – to serve as honorary chairman of this conference, and the turnout of prominent political people, from both sides, is striking.  There is an article from the PRC consulate here (open in Chrome for a translation), featuring (perhaps among others) John Key, Jian Yang, Anne Tolley, David Parker, Jenny Salesa, Willy Jackson, Peter Goodfellow, Raymond Huo, Nicky Kaye and Phil Goff.

This is one very well-connected person, across both sides of politics, with considerable pulling power, who was gifted a New Zealand honour essentially for services to Beijing……who is now facing serious charges around electoral donations.  Who was known for months to have been caught up in allegations around party donations.  And yet our politicians –  National and Labour –  just wouldn’t stay away.

I hope at least somewhere in our media one assiduous journalist, working with people who can navigate the Chinese language sources, is doing a serious investigative piece on Yikun Zhang and his connections –  local, and in Beijing.  Perhaps it wouldn’t sell many papers on the day –  all those confusing acronyms etc –  but it is the sort of scrutiny our tarnished democracy needs.

It all looks, from the outside, like that combined New Zealand “elite” determination to do all its possibly can to never ever upset Beijing, to pander in public and behind the scenes, to tap apparently generous sources of donations from people without regard to their ties to an alien regime with no regard for democracy, freedom of speech, and human rights.  Keep the deals flowing, keep the dollars flowing, make sure no one can ever drive a wedge between the CCP and the National and Labour parties.  It is why, to me, the big issue isn’t really whether or not Yikun Zhang, Jami-Lee Ross or the other split donations to get round the law –  courts can and eventually will rule on that –  but the value-free mentality that has taken over our political “leadership”.   What was Simon Bridges doing going to dinner at the house of someone with such close regime ties, discussing party donations with, and soliciting from, him –  he was hardly a personal friend (that English language gap is telling)?  Why were MPs, mayor, and the Cabinet getting together to honour him?   Why was such a galaxy of political figures turning up at his event, all of them surely realising the regime-affiliation and interests of all such events?   But then why was Jacinda Ardern posing alonside Xi Jinping in Beijing a few months ago, why was Simon Bridges meeting the Politburo person in charge of domestic security (Xinjiang and all that), and so on?   The pander continued as recently as this week, with the PM reportedly calling for a minute’s silence at the Lunar New Year function at Parliament for those who’ve died of the coronavirus –  nothing wrong with that perhaps in its own right but, of course,she’s never called out the deaths and mass imprisonments in Xinjiang, the imprisonments and persecutions that inhibit freedom of speech and worship and politics in the PRC, or the tens of millions of live that regime has claimed.

Then again, these are the parties that (in National’s case) keep Jian Yang in Parliament and (in the case of all the other parties) do and say nothing about it, the parties that administer a government adminstration that seems unbothered by Jian Yang’s acknowledgement that he had lied about his past to get into the country.  It is shameful, and it is mostly not covered by our media.

In ending, some kudos to David Seymour, the ACT MP, re Yikun Zhang.  On his telling

“I’m pretty happy I didn’t take the invitation to a private dinner at Yikun Zhang’s house right now,” Seymour, leader of the ACT Party, told reporters on Wednesday.

“Multiple times the guy invited me to have a private dinner at his house and I thought ‘that sounds dodgy’ and never went…I have no idea what his intentions were.”

Seymour said he received the invitation in 2018, adding: “I don’t normally go to their house for dinner if I don’t know them and we can’t speak the same language – very unusual.”

He said Zhang Yikun “made frequent appearances at various Chinese events on the calendar that a lot of MPs go to” and that he would usually have “several intermediaries standing around who would speak English”.

Seymour said, “On multiple occasions he tried to get me to have dinner at his house, I said I won’t do that, he said ‘I own a restaurant and we could meet there’, and I said that sounds worse.

“So, as a result I never had any kind of arranged meeting with the guy and I’m pleased about that.”

It can be done.

 

What a (revealing) travesty

Late yesterday morning, the government announced that it was going to ram through all its stages under urgency, the Electoral Amendment Bill (No. 2).  By the time you are reading this, the bill may already have been passed into law.

The goal of the legislation appears to be to suggest, at least to those who don’t follow politics closely, that the government is “doing something”.  The Minister’s press release announcing the bill is headed “Government to ban foreign donations”, but in fact it does nothing of the sort.

The Explanatory Note on the bill is more honest, that the law is more about signal than substance

The Bill makes several changes to the Electoral Act 1993 to send a clear signal that only those who are part of New Zealand’s democracy, and who live in, or have a strong connection to, this country, should participate in our electoral system.

But although the heading of very next section sound promising, again the substance outs

Ban on donations from overseas persons

The Bill amends the Electoral Act 1993 to restrict donations from overseas persons to political parties and candidates, to reduce the risk of foreign money influencing the election process.

The changes are being applied only to parliamentary elections, not local elections.

The Bill bans candidates and parties from accepting donations over $50 from an overseas person in any form.

The definition of an overseas person in the Electoral Act 1993 is not being changed. The ban applies to donations from—

  • an individual who resides outside New Zealand and is neither a New Zealand citizen nor registered as an elector:
  • a body corporate incorporated outside of New Zealand:

  • an unincorporated body that has its head office or principal place of business outside New Zealand.

So if there is any (serious) signal at all, it is that local body elections don’t matter (there are no still restrictions at all on foreign donations to local body campaigns, even though we know that, for example, prominent candidates in Auckland have been associating closely with PRC United Front individuals/entities, or that –  for example –  Southland mayor Gary Tong was being courted by close regime-affiliate Yikun Zhang).

The other “signals” are rather more implied:

  • first, since the foreign donations limit is being lowered from $1500 to $50, but the anonymous donations limit is being left at $1500, any foreigner who really wants to make a $500 donation should just do so anonymously.     This was an issue the Ministry of Justice highlighted in its (not very good) RIS, but the government chose not to act on, and
  • second, none of this intended to be serious at all, just theatre.

How do I justify that second point?  Well, check out this table from the RIS.

justice donationsThis just isn’t where the (foreign) money is.  All “foreign donations” –  as the law is drawn at present, and will be when the bill is passed –  averaged just under $5400 per annum across almost all our political parties.  Those are derisory sums of money, rightly tightly limited.  The new law will, almost certainly, reduce the derisory sums under this heading to almost zero.

So where is the foreign money?  First, and we know this from political party returns –  they aren’t really hiding it, even if they won’t engage on it –  is donations from foreign-controlled companies operating in New Zealand.  There have been two particularly prominent examples highlighted in recent years: donations to the National Party from Inner Mongolian Horse, and one from another Chinese billionaire’s company that was facilitated by Todd McClay and Jami-Lee Ross (the latter told us again all about the transaction in his Second Reading speech last night).   It isn’t a new discovery that this avenue is open.  Some call it a “loophole”, but it looks a lot more like a design feature –  ie even if not envisaged when the law was originally drafted, all parties in Parliament have been content to leave the definition of “overseas person” unchanged, in full knowledge of how the provision was being used.

That would have been easy to fix, if the government had been interested in doing so. It clearly wasn’t.  It is where a lot of money has been in the past, and if they argue things need to change before next year’s election, this is what they could –  quite readily-  have changed.

And the second, of course, much harder to deal with: funds donated by people who are now New Zealand citizens, but who have close associations with foreign regimes, notably the heinous CCP regime in the PRC.  I’ve seen people talk about the risk of foreign regimes directly channelling funds to such individuals and them passing the money on under their own (New Zealand citizen) name.  Perhaps, but things don’t need to be that direct to be highly troubling.  Reciprocity is a real thing, whether or not anything is ever written down.   I’m not sure what the law can do about this particular risk, but political parties can.  Political parties can choose to do the right thing, and declare –  and take seriously – a determination not to take money from, or solicit it from, people –  even registered electors –  who are known to have close associations with foreign regimes, perhaps especially with such troubling regimes as the PRC (or the Soviet Union in days gone by, for example).     But there is no sign of such a willingness to commit, to self-restrain, from any of the parties in Parliament.  None.

Thus, I heard National MP Nicola Willis give a decent speech last night in the second reading debate, that seemed to suggest she thought there were real issues and problems that needed addressing. But there was no sign from her –  or any of her colleagues – that they were willing to commit to a different model of behaviour.    Nothing from the Prime Minister either, even though she has previously been critical of some of donations that have flowed to National.  She’s the Prime Minister.  She could legislate, she could set an example.  Instead, we just have political theatre, while avoiding the real issues.

(The Opposition leader, of course, is quite as bad here –  albeit out of office.  Listen to his trainwreck interview with Kim Hill on Morning Report this morning, where he tries to avoid even acknowledging any sort of serious issue.)

And then, of course, there is the process –  ramming this law through under urgency, with no select committee submissions, hearings, or deliberation.   Things weren’t even done quite that badly with the gun control legislation earlier in the year.    Hardly any law should ever be passed that way, and certainly no electoral laws.  But what is also remarkable is that looking through the Minister’s press release, the Explanatory Note, the RIS, and Hansard records of the debate last night, I could see no substantive justification from anyone on the government side for this extreme urgency.  The bill won’t even come into effect until 1 January –  so they could readily have had even a week at a Select Committee, a week for people to think through the details carefully. It is a travesty of a process.

There have been various attempts to suggest that the problem here was really the Justice select committee, which has been dragging its feet on reporting back on its inquiry into foreign interference.    If only they’d reported, it is suggested, such a rushed and limited bill might not have been necessary.

But that sort of story doesn’t stack up at all.  First, even though the Committee is split equally between government and Opposition members, Labour provides the chair, and a good chair would be able to facilitate the process, and build coalitions.  In fact, we are now (so it is reported) onto the sixth chair for this particular inquiry, and many of the members now on the Committee weren’t members when much of the evidence was heard.  And it is only nine months or so since Labour was backing their chair (Raymond Huo) in his stated desired to prevent any public submissions at all, quite content that government departments could provide all that was needed.

More importantly, the government is supposed to govern and to lead.  All the issues around donations –  including foreign donations – have been known for a long time now. And it is not as if the Justice Committee (with its endlessly rotating membership) has any specialist expertise on these issues, or access to policy and operational advice not open to the government itself.  The government is far better equipped to act,  if it wanted to.  But it is chosen not to until now, and now it is just engaged in insubstantial trivia –  grabbing a few headlines, but not changing anything.    They could have had a bill in the House six months ago, with time for proper select committee consideration, outlawing donations (for central and local government campaigns) from anyone but registered New Zealand electors, and with full and near-immediate disclosure.  But they consciously chose not to.  And if, perchance, Labour wanted to act –  seems unlikely –  but didn’t think it could the numbers, it was a great opportunity for some Prime Ministerial leadership, to embarrass other parties into acting, and to set an example with the new and better limitations Labour would adopt for its own fundraising.

But we’ve had none of that.  Either the Prime Minister wasn’t capable of such leadership or wasn’t interested in displaying it.  Either should be a concern.  She runs the government.

There was a few good speeches in the debates last night, but in the end only one member –  ACT’s David Seymour –  was actually willing to oppose this piece of theatre.    Perhaps political parties were reluctant to be wedged – being seen to oppose a bill that (appears) to limit foreign influence – but I doubt that really explains much.  It probably suits National quite as much as Labour –   even allowing that they are serious about their process concerns around urgency –  to be seen to have “something done”, even as nothing much substantive changes.

Outside political parties, I guess views can differ.  I noticed Professor Anne-Marie Brady welcoming the bill (she was responding to my lament that Jami-Lee Ross had made a forceful speech about the bill avoiding all the real issues, yet voting for it)

I disagree with on that.  It is probably worse than nothing because (a) the donations it will actually restrict are derisory in total value (see above), and (b) because it tries to fob off the public with a sense of “something being done”, even as the real issue are almost entirely avoided.  The public typically has a limited attention span for such issues, and this will have people who’ve had only a half an ear to the issue nodding along with the “at last something is being done”).  But the CCP, the PRC Embassy, those regime-affilated business people –  resident here or abroad –  will know that nothing real has been done at all.  And in the entire parliamentary debate –  that I’ve read or heard – the elephant in the room, the CCP/PRC, is not even mentioned.  So at least one more election will pass with the ability to raise large amounts from PRC-affiliated sources will go on, even as the true character of the regime becomes more and more apparent. (Of course, any restrictions should apply to all foreign donations, but no serious observer supposes that the biggest issues at present are around the PRC).

Perhaps we will eventually see the Justice Committee’s report on foreign interference issues.  Simon Bridges implied this morning that it won’t be much longer delayed, although suggesting that there are likely to be two different reports.  But it seems highly unlikely we will be much further ahead.    The Committee has no personnel or expertise or analysis not already open to the government –  in fact, the RIS on today’s bill had the Ministry of Justice noting that they had paid attention to the submissions –  and there is no figure of any real stature (no Andrew Hastie, for example, in the Australian context) on the Committee, let alone chairing it.

Bu then there are no figures of any real stature leading our politics.    Today’s bill, today’s process, demonstrates that again.

My own submission to the select committee inquiry is here.   That submission included

There are some specific legislative initiatives that would be desirable to help (at the margin) safeguard the integrity of our political system:

• All donations of cash or materials to parties or campaigns, whether central or local, should be disclosed in near real-time (within a couple of days of the donation),

• Only natural persons should be able to donate to election campaigns or parties,

• The only people able to donate should be those eligible to be on the relevant electoral roll,

However, I summarised

But useful as such changes might be, they would be of second or third order importance in dealing with the biggest “foreign interference” issue New Zealand currently faces – the subservience and deference to the interests and preferences of the People’s Republic of China, a regime whose values, interests, and practices and inimical to most New Zealanders.  Legislation can’t fix that problem, which is one of attitudes, cast of minds, and priorities among members of Parliament and political parties.   Unless you –  members of Parliament and your party officials –  choose to change, legislative reform is likely to be little more than a distraction, designed to suggest to the public that the issue is being taken seriously, while the elephant in the room is simply ignored.    It is your choice.

Today’s legislation is just such a distraction.

Spin….just spin

I suppose all Prime Ministers these days feel the need to spin.

Ours was at it again yesterday.   She was talking over breakfast –  a vegetarian one the Herald account tells us – to the Trans-Tasman Business Circle.  Her topic?

The topic I have been given for today – ‘The Future of Work and how the government is preparing for the economic challenges of the future’

It is pretty much downhill from there.

Countries the world over are currently grappling with digital transformation, and transitioning their economies, and New Zealand is no different in that regard.

Even if you pardon that abuse of the language (“transitioning”), does anyone have any idea what this means. Individuals and firms are getting on with their lives, looking for opportunities, as it long has been and no doubt long will be.  Are technologies different than they were fifteen years ago?  Of course.  But is our economy that different than it was fifteen ago?  Sadly, probably less so than one would hope.

That isn’t the prime ministerial spin though

Where we are different, I believe, is in the way we are responding to those challenges, turning many of them into opportunities.

The country with weak productivity growth, drifting further behind the rest of the advanced world, and with declining shares of GDP accounted for by trade with the rest of the world.

As it happens, the annual national accounts were released later yesterday morning.   I was playing around with the data and might use it for various posts in the next few days, but since the PM was talking about “digital transformation”  I thought this chart was interesting.

cap stock 19.png

Now not all of these, by any means, are about the narrow “digital transformation”, but if such a thing were happening on a large scale, in which new world-beating opportunities were being developed and seized, these indicators are among those where we might expect to see it.  As it is, over the last few years things to have been more or less going sideways.

The PM went on to first offer some context

Firstly, the NZ economy is in good heart amid the global challenges and what many believe are new economic normals,

Well, okay, believe that if you want.  But most respondents to surveys don’t share your positivity, and in general they are less likely to be motivated reasoners than a PM.  And

Secondly, the Government and Reserve Bank are doing their bit to ensure that fitness endures and it’s important business continues to work with us too – after all, we mustn’t talk ourselves into a funk

We are right, you are wrong.  Get with the message.  Or at least that seemed to be what she was suggesting.  Just a shame the data don’t tend to support her.  I’m still not sure what the Reserve Bank has to do with “that fitness” (whatever it is) –  presumably she hasn’t had it schooled into her that the OCR is typically cut (in an economy without big positive productivity shocks) because demand is weak and things aren’t going that well.  Oh, and is she perhaps aware of those big new capital requirements the Governor is wanting to impose on banks, and hence on the availability of credit to the economy?  If she is embracing those, that would be an interesting call –  her Finance Minister has been very careful to disown all responsibility.

Anyway, she gets into her stride in a section headed “It’s the economy”.

All of you in this room will know that this Government’s approach to the economy is that it is not an end it itself but, rather, a means to an end.

Which might be news if, just perhaps, she could point us to any government in history, or even just New Zealand history, for whom that was ever not so.

That of course means building strong economic foundations. And on that front we’re doing pretty damn well actually, especially amid global uncertainty.

The argument must be weak so lower the tone of the language.  No one is going to dispute that successive New Zealand governments have successfully focused on budget balance and a modest level of debt.  What about her other claims?

So far our policies have delivered growth of 0.5 percent in the June quarter and average growth of 2.4 percent in the year ending June. That shows that the New Zealand economy continues to outperform those of Australia, Canada, the Euro area, the UK, and the OECD average – basically those we compare ourselves to.

That tired old line so beloved of whoever is in office, right or left, and their champions.  Never mind that we have substantially faster population growth than all of those countries except Australia and that any reasonable and honest use of GDP statistics in a a discussion about success, wellbeing or whatever, starts from a discussion of GDP per capita.    On that score, there is nothing impressive about even our recent record, let alone the longer-run picture.

Also, recent data shows New Zealand’s manufacturing and services sectors are both expanding.

Well, yes that is probably so, but…..when your population is growing by 1.5+ per cent per annum if those sectors (ie the bulk of the economy) were actually contracting it would be really quite alarming.

We have record low unemployment and annual wage growth is at its highest level since the 2008 financial crisis. Average wages have increased by 4.2% in the last year alone.

Yes, relatively low average unemployment –  consistent with the typical person being unemployed for “only” two years in a working life –  is one of the successes of the New Zealand policy framework.  But the current rate is nowhere near a “record low” –  not even during the 30+ years of the HLFS (that was just prior to the last recession), let alone the post-war decades prior to the quarterly survey getting going.

New Zealand continues to be a good place to do business, topping the World Bank’s 2019 Ease of Doing Business index. Our globally competitive economy is underpinned with stable political and regulatory systems, an innovative well-educated population and our proximity to 60 percent of the world’s population. We are a safe place to invest.

Such a great place to do business in fact that (a) business investment remains persistently weak, especially given the surge in the population, (b) our economy is becoming more inward-focused (trade shares have been falling) and (c) another tired old line –  we are close to 60 per cent of the world’s population –  that bears just no relation to reality whatever.  Yes, we are closer to the centre of gravity of world economic activity than we were 100 years ago – when we traded mostly with the then-dominant power the UK –  but these days the UK is still closer to India and as close to China as we are.  In both cases, far away.  Oh, and we are also a long way from those leading productivity economies in Europe and North America.

And last on this list

And you’ll note that when the Reserve Bank announced its decision to hold the Official Cash Rate at 1 percent last week, its analysis confirmed the economy is in good shape, amid global economic headwinds. The Bank pointed out that employment is pretty much at its maximum sustainable level, residential investment is increasing and that economic growth is expected to rise next year, due to the Government’s investments. While the RBNZ noted that global headwinds have impacted business confidence in New Zealand, it also said that our investments are forecast to support and grow the economy next year.

When the Prime Minister says “investments” here she really just means more government spending, most of it consumption or transfers.  Probably she didn’t read the Reserve Bank’s statement, but she will have had a personal briefing from the Governor.  He too is inclined to spin, but his document had a rather lot on the downside risks –  in fact they explicitly noted, and formed policy on the basis of, the balance of risks being to the downside.  And while the Bank had rather upbeat growth forecasts, few private economists shared their optimism.

I am not wanting to suggest things are disastrously bad, at least in a short-term cyclical sense in New Zealand, but at very very least the PM is gilding the lily.   Perhaps you might think that is her job, and on a bad day I could share the cynicism, but we really should expect something better from people who hold office as leaders.

But her own summary is this

Ultimately, we have a positive story to tell, including to investors, and one of my consistent messages is that we are a stable, reliable  investment option, with plenty of success stories. Now, domestically, we  all need to act like it.

I’m right, you are wrong, get with the message.   Or so it seems.     And, yes, we do have a fair measure of political stability –  no Brexits, no civil wars etc, no impeachment hearings (just the ongoing stench of the political donations scandals) –  but that doesn’t markus out from most advanced countries, those that have been performing pretty strongly –  actually securing the productivity gains on which so much else rests –  and those, like New Zealand, that haven’t.

The next section is headed “Govt doing its bit”.  Here there is a lot about capital investment

It won’t surprise you to hear me say – infrastructure, infrastructure and infrastructure. There’s no question that we have a range of deep policy issues to address as a nation, but unless we get the basics right of providing decent housing, transport and health and education services, we’ll only compound those more complex issues. That’s why the Government’s Economic Plan, which you will have heard many Ministers talk about, is designed to build an economy that protects and improves the living standards and wellbeing of all New Zealanders through ensuring we get those most basic fundamentals right.

That’s why we are investing record amounts in hospital and school building programmes – including the fact that in our first two Budgets we’ve invested $2.45b into upgrading and building new hospital and health facilities- that’s twice as much as the previous government managed in nine Budgets – alongside large investments in transport safety, regional roads, and public transport, and we’ve done that while maintaining a responsible budget surplus.

“The Government’s Economic Plan“: that’s a good line.  I hope it got a laugh.  But perhaps the audience were more polite than that.  Infrastructure?  Well, shame about the roads that aren’t getting built, even as the population grows rapidly.  And here is another chart from the annual national accounts, showing general government investment spending as a share of GDP.

govt GFCF

Nothing startling about spending in the first full year of this government.  But perhaps it will be different in years to come.

And then the empty boasts about housing

Not to mention our comprehensive plan to fix the housing crisis which includes delivery of: more state houses than any Government since the 1970s, banning offshore speculators, expanding Housing First to end homelessness, a $400 million package for a progressive home ownership scheme, and making saving for a house deposit easier by lowering the deposit required for a Government-backed mortgage or first home grant from 10 per cent to five per cent. These are real, tangible, things that will help New Zealanders and their families.

“Comprehensive plan” and yet not a mention of the only thing that would make a durable, substantial and sustainable difference, lowering prics of houses and urban land, land use reform.  Allowing people to borrow 95 per cent LVR loans – even as her Reserve Bank keeps on LVR restrictions on private credit –  is at best papering over the cracks of the failures, chosen, of successive governments, including her own.  But give her credit for consistency:  Labour leaders (whether Little or Ardern) have never been willing to champion serious land use liberalisation.

A little further one and we get this recapitulation

Ultimately, this [Infrastructure Commission report] should all be sending two really strong signals. That we are planning for the future and that now is the time to invest. New Zealand is doing well and there are enormous opportunities if we act now. The best thing for the NZ economy at the moment is optimism, planning and investment action. We’re doing some pretty heavy lifting to shore that up in terms of spending and infrastructure investment, the RBNZ is doing its bit with record low interest rates – the private sector needs to ensure it’s on board too.

But, our economy (a) isn’t doing that well (see above) (b) and firms –  people with shareholders’ money on the line clearly aren’t seeing “enormous opportunities” to invest, either now or (in fact) for decaders past.  If it were otherwise now then, all else equal, interest rates just wouldn’t be this low –  as a macro 101 reminder to the PM, interest rates are low because demand for resources at any higher interest rates would be even weaker.

But the PM enjoins us to “only believe”, to join some sort of cheerleading squad building castles in the air.

In fact, one of my staff members asked an economist earlier this week to sum up the economy in one sentence and was told – “it’s ready for lift-off”.  I could not agree more.

Perhaps there is such an economist.  Perhaps he/she doesn’t even work in DPMC/PMO. Perhaps there even will be a bit of a recovery next year.  But just nothing suggests this economy is “ready for lift-off”.  The basic imbalances and severe structural problems haven’t been addressed, haven’t changed.

She goes on.  There is the claim

we have laid out a clear agenda. Yes, it includes change, but by now you’ll all know what that agenda entails and how we’ll deliver it.

Somehow, I suspect the farmers angsting about the current water proposals don’t see it that way.   And the government might have passed a Zero Carbon Bill, but (whatever its merits) it involves almost no substantive certainty about anything affecting business.  Do we know what is happening about Fair Pay Agreements?  And so on.

The speech goes on into a variety of other areas.  The last I wanted to comment on was this –  something to look forward to next week

Today I am also able to provide you with some insight into an upcoming announcement for the Forum. On November 25 the Forum will publish its Strategic Assessment of Future of Work Priorities. This presents four initiatives as priorities:

  • The first is Industry Transformation Plans which will ensure we add value to key sectors of our economy and leverage new opportunities. These plans – for the food and beverage, digital technology, forestry and wood processing, and construction and agritech sectors will describe an agreed vision for the future of each sector, and set out actions required to realise this vision.

(So actually, some of the “clear agenda” isn’t laid out yet, but will be next week?)

Presumably the Prime Minister takes this stuff seriously, but really who supposes that a bunch of central planners, bureaucrats and their corporate equivalents, are really likely to come up with anything useful in these “industry transformation plans”.  Haven’t we had numerous such plans before, stretching back many decades, and precisely what useful has come of them?    Market economies just don’t succeed with “agreed visions” across government and the upper tiers of existing industry players, but by competition, trial and error, creative destruction, unexpected discoveries…..all supported perhaps by governments willing to do what it takes to put a supportive overall policy environment in place.   Our goverment, much like its predecessors, is all too fond of the status quo, and unwilling to –  probably uninterested in –  getting to the bottom of why that continues to produce such mediocre economic results.

As a hint, the real exchange rate –  a key relative price that never seems to make it to the PM’s upbeat economic speeches –  remains well out of line with what you might expect for a country with such a disappointing long-run trade and productivity record.  It might be consistent with that performance, but simply isn’t consistent with delivering something much better, that “productive and sustainable” mantra ministers always keep reciting, while never doing anything much to bring about.

I guess Prime Ministers feel the need to spin, perhaps especially those who aren’t willing to do much substantial.    But it is a shame there isn’t a lot more honesty about the underwhelming state of the New Zealand economy and the reluctance of our policymakers and their advisers to do anything much about changing it.  Sheer spin might get a good headline in the next day’s newspaper, but longer-term it just feeds the growing cynicism about politicians and the political process.  It is cheap, has some short-term sugar-high effect, but is pretty deeply corrosive.  Why take seriously anything they say?

Unserious defenders of NZ national interests

Our government finally made sufficient obeisance and secured a modest upgrade to its preferential trade agreement with the People’s Republic of China.  That included New Zealand agreeing (page 4) to take twice as many PRC-funded ideologically pre-screened Mandarin Language Assistants in our schools (rather than, say, properly funding language learning in schools ourselves).   The values-free cheerleaders for New Zealand deference and subservience to Beijing were all out praising the deal, and if the shameless National Party trade spokesman Todd McClay –  the one who last year was defending the PRC brutality in Xinjiang as being no more than a few vocational training schools and really none of anyone’s business –  was a bit carping and critical, he and his party were probably only critical that the current government does not (quite) do the full kowtow (they did actually sign that 22 country letter on Xinjiang, even if not one of them –  not an official, not a Minister, certainly not the Prime Minister –  will say a word about it).

Remarkably, for a pretty secretive government, sometimes one gets more coverage from the PRC government side than from our own.  The PRC Embassy here often has interesting statement or commentaries on its website.  There was such a commentary this week about the Prime Minister’s meeting with Li Keqiang in Thailand, including the prefential trade agreeement update, although for some mysterious reason I couldn’t see it on the PRC New Zealand embassy website but only on the PRC US embassy website.

Two lines caught my eye. There was this from the Chinese side

The Chinese side is committed to creating a market-oriented, and law-based international business environment, and hopes that the New Zealand side will create a level playing field in New Zealand for Chinese companies to invest and start business.

(One might scoff at the first half of that, but my interest was the second half)

and this describing the New Zealand government’s response

The New Zealand side is willing to provide a non-discriminative environment for companies from all countries investing and starting business in New Zealand.

Others noticed it to.  Here was the Executive Director of the China Council, the government/business propaganda arm of the New Zealand/PRC relationship

Pretty predictable (anything for the PRC, if only we – they – can get some more deals in the short term, is pretty much the China Council stance), but pretty unfortunate too.

The government is, or at least says it is, reviewing the Overseas Investment Act.  It was September last year when they issued terms of reference for the review.    There was a consultation document released in April this year, with a very short period for submissions, because –  according to the Cabinet paper released under the OIA – they wanted to ensure they had legislation passed this parliamentary term.  And yet here we are, now getting on for mid-November and nothing more has been heard.  They don’t seem to have even published the submissions yet.

National security was one of the dimensions covered (albeit superficially) in the consultation document.    Now ‘national security’ is one of those catch-alls that can be grossly abused –  see Trump’s grounds for steel tariffs on Canadian imports –  but the fact that it can be abused does not change the other, rather more important fact, that national security is an important issue, there are real threats (actual/potential), and one of the key roles of any government is to protect national security.    And, on the other hand, business interests have no particular concern for national security, especially if it gets in the way of their activities.

The worry here –  as the Prime Minister’s commitments are reported by the PRC –  is that neither does the government.    We seem to have governments more interested in enabling New Zealand businesses abroad, than in protecting the security, values, and integrity of New Zealand.

I generally have a pretty open approach to foreign investment.  It is often economically helpful and generally mutually beneficial.  Among firms and individuals from free and open societies, sharing similar values, and where companies are free to pursue their interests not those of their governments that is a pretty strong starting proposition.  Perhaps even more so when it involves investment from companies in countries near the frontiers of economic performance and productivity.  Personally, I’d favour removing pretty much all restrictions on such investment from abroad (perhaps preferably reciprocally, but the benefits to New Zealand mostly arise from opening up ourselves –  rather like removing all New Zealand tariffs (something successive governments refuse to do) would benefit New Zealand consumers).

I wrote about this briefly some months ago when I was lodging my own submission to the Overseas Invesment Act review, including how we should think about investment from the People’s Republic of China  and why treating all countries similarly simply does not make much sense (since neither the opportunities nor the risks are the same).  Here is what I wrote then

These days, New Zealand does not get much foreign direct investment –  and especially not much in the way of greenfields new developments.  I don’t think the screening etc regime is the main reason –  mostly, I suspect, we don’t have that much foreign investment because (a) there are few opportunities here, and (b) for the same sorts of reasons business investment generally has been weak for decades (high cost of capital, high real exchange rate, high taxes on business profits –  in that case, especially for foreign investors).  But I’d generally favour a more liberal environment, for almost all industries and for investors of almost all countries.

It is also worth recognising that most of any benefit (to productivity in New Zealand for example) from foreign investment will come from investment by firms based in rich and advanced countries.  Of course, there might be rare exceptions –  a firm based in Zambia, Laos or El Salvador –  but they will be exceptionally rare (the best ideas, technologies, management systems etc) will be in the rich countries –  part of why they got, and stay, rich.  So I’d favour a pretty-much open slather approach to foreign investment –  existing assets or new –  for investors based in rich countries (the OECD membership might be a decent starting point, and one could add in places like Singapore and Taiwan.

For most of the poorer or smaller countries, I really don’t care much what the rules are.  Probabilistically, there is almost nothing at stake (at least in economic terms) in maintaining restrictions on Zambia, Laos, El Salvador (or 100 others) if that is what the political process demands.  But, equally, there isn’t much risk or downside to opening up to them either, especially if one is focused on the benefit of New Zealanders being (generally) able to sell to the highest bidder.

There are various odious regimes in the world.  Most them don’t matter much to New Zealand at all (thinking places like Equatorial Guinea).  But the PRC does and in my view we should –  while the regime remains as it is – be treating investment from there quite differently, for various reasons.    One is a straightforward economic one.  Almost any large PRC firm is either an SOE or has a significant element of state/Party control to it.  We spent years here trying to reduce the hand of the state in direct business operations in New Zealand.  State entities typically don’t run businesses well, don’t allocate investment efficiently, and so on.  There is no more likelihood (to put it mildly) that PRC state-controlled companies will do so than the New Zealand government ones will –  and at least the New Zealand government ones are ultimately answerable to New Zealanders.  Such investment is likely to be a net negative for New Zealand even if the price paid to the initial New Zealand vendor is higher than that vendor could have got from another –  private –  purchaser, whether from New Zealand or another country.

But the deeper reason is that the PRC is a big and powerful totalitarian state, that has repeatedly displayed aggressive intent, which has values antithetical to those of most New Zealanders.   Individual PRC buyers may well be perfectly decent well-intentioned people –  as plenty of 1930s Germans were too –  but a totalitarian state has, and repeatedly demonstrated, its leverage over its own people, by fair means and (too often) foul.  We would simply be ill-advised to allow PRC-associated interests to have significant investments in many sectors in New Zealand.  One could think of media or telecom companies, or tech firms.    The PRC banks operating here should be a matter of concern, especially if they get materially larger than they are now.   But the concern should range wider.  For example, the greater the control PRC interests have of elements of the dairy industry, the more difficult New Zealand might find it to be handle the sort of economic coercion the PRC has attempted to engage in re various countries in recent years.

And, of course, to circle back to my earlier point, it is not as if the PRC is one of the world’s advanced economies.  Productivity levels languish far behind even New Zealand’s modest levels, and everyone recognises the dependence the regime has had on industrial espionage.  Deep pockets aside –  with a mix of market and non-market motives –  how much genuine benefit to New Zealanders is there likely to be from PRC foreign investment over time?

It is possible that this sort of restrictive regime could come at some economic cost, in terms of lost productivity opportunities for New Zealand. My sense is that it would probably be quite a small cost, but we can’t be sure.  Perhaps more importantly, many precautions have a cost –  whether it be a national defence force, Police, anti-virus software, or a lock on your front door.  The PRC is a threat to New Zealand and countries like us, and we need to be willing to spend some resources (perhaps sacrifice some short-term opportunities) to establish some resilience to those threats.

But, of course, our elected “leaders” and business establishment figures have no interest in any of this.  For them, it seems, the character of the regime matters not a jot, it demonstrated track record at home, abroad, and in New Zealand matter not a jot.  There are deals to be done, donations to be collected, and  –  if there are any risks –  well that will be someone else’s problem another day.  And in the process they’ve allowed our political system to become corrupted, indifferent to the character of the regime, indifferent to the values of New Zealanders.  But their “friends in Beijing” are no doubt happy.

I didn’t post a link then to my short submission, but I will do so now.

Submission on. reform of Overseas Investment Act May 2019

Some excerpts.  First, the liberalising proposal

As a general proposition, I suggest that the government should look at a model which more clearly distinguishes between countries which, broadly share similar values, interests, legal systems and approaches to business and remove all (or almost all) restrictions on foreign investment originating from such countries. A starting point for such a list might be the OECD countries plus Singapore and Taiwan. If the beneficial owners of a potential investor are predominantly from these countries, it isn’t obvious that the net benefits from screening would outweigh the costs, including deterrence of investment, of such a regime. Much of world cross-border foreign investment originates from these countries (and the countries at or near productivity frontiers are included in this group), and to the extent that there are prospective economic gains from liberalising the regime, those gains are likely to arise in respect of these countries.

And on the other hand

And at the other end of the spectrum should be a small list of named countries from which we should simply not welcome foreign direct investment, and where the presumption should be against granting approval for any but the smallest and most innocuous of investments. Such a list might include countries subject to United Nations sanctions (notably North Korea), mostly for global good-citizen reasons, and membership of the list might change over time – Germany might have appeared in the late 1930s, the Soviet Union and its satellites during the Cold War – but the key country that should feature on any such list today would be the People’s Republic of China.

In other words, the issue is not specific countries for all time, but specific assessments of the character of regimes, their control over business, and the nature of any threat.

The consultation document makes every effort to be neutral as between countries. But that is a mistake. It is right to recognise that the source of potential threats can change over time, but unless the government is willing to openly confront the nature of specific potentially-threatening countries, it is difficult to build a regime that will serve well both the national security and economic interest imperatives, and provide a clear framework for potential investors (and potential vendors).

What of the PRC?

The issues around the PRC are twofold. First, many of the larger potential foreign investors are state-owned enterprises (or state-controlled ones). We moved to reduce the role of state-owned companies in our economy, for good sound efficiency reasons, and we should establish a presumption in our foreign investment regime that foreign state-owned enterprises (especially ones that cannot operate at a genuine arms-length from government ownership/control) are unlikely to offer potential efficiency gains for the New Zealand economy. And second, because the People’s Republic of China is a regime (a) in which no one can operate fully at arms-length from the authorities (Party or state), (b) has a demonstrated record of not operating as a market economy, (c) shares almost none of the values of New Zealanders, and (d) represents a clear potential threat to the integrity and security of other countries, including in any future period of conflict. The fact that there may be many good, well-intentioned, investors from the PRC should simply not be relevant here, any more than the presence of decent well-intentioned Germans in the late 1930s should have left countries relaxed about German foreign investment at the time. The issue isn’t the individuals, but the authorities to which they are subject.

The risks around foreign investment from the PRC are not restricted to more-obviously sensitive assets (eg major media outlets or telecommunications systems) but apply more generally, partly because of the importance of PRC state-sponsored industrial espionage, but also because of the pervasive use by the PRC system of all sorts of potential sources of influence or connection. For example, vertically-integrated production and supply chains (including in the dairy industry, or the tourism sector would more difficult to withstand PRC attempts at economic coercion of the sort seen in various other countries in the last decade Investment from PRC sources represents a different and, generally, much more severe set of risks than that from Singapore, South Korea, Ireland or Canada.

More generally

The issue can be thought of in terms of a 2×2 matrix: there are benign countries large and small, and more troubling countries large and small. It is the larger and more troubling countries our restrictions should be focused on, and with regard not just to the current situation and immediate threats, but to maintaining resilience over, say, a 10 or 20 year horizon.

And to revert to the PRC

It is possible that such a near-complete ban on PRC-sourced foreign investment could come at some – likely modest – economic cost, the character of any such cost should not be seen as much different in kind to the price we pay for national defence and security systems. Without that expenditure, private consumption could be higher now – and potentially for decades to come – but we choose not to take that option because the recognise that there are risks and threats.

In this, as in other areas of public life, we shouldn’t be afraid to name the potentially hostile state and act accordingly, even as we would welcome such a state back into the fold when if the character of the regime changes. Germany and Japan were once our greatest threat, and are now close allies. They changed their regimes, systems, and strategic intent. When and if the government of China does, we should welcome foreign investment from there, commensurate with the values and practices of the new system. For now, however, we allow our system and society to be corroded from within to the extent we open our economy to significant PRC foreign investment, whatever the apparent short-term gains to individual vendors might be. It isn’t, by any means, the only (or perhaps even most important) set of PRC risks and threats but it is the one that is the subject of this consultation.

Businesses won’t care.  Governments should.  Ours appears not to.  The focus always –  be it on defence, the political system itself, or whatever (foreign investment, Confucius Institutes) – seems to be to minimise the issues, do as little as possible, try to pretend to the public there really isn’t an issue or potential threat at all.  That is pretty shameful and inexcusable.  That is our Prime Minister (and, of course, her chief rival has form suggesting that if anything he’d be worse on this score).

Talking of long-delayed inquiries, the Justice Committee’s inquiry into foreign interference –  the one the government didn’t want to open for public submissions at all –  has still not reported, and no reform legislation has been presented to Parliament either.   The big issues here are less about legislation than about will and mindset.  But again all the evidence points in the direction of big political parties preferring to minimise the issues to the very greatest extent possible.  Jian Yang, and the National and Labour Party “friends in Beijing” will be happy.

Lighthouses warn people away from the rocks

In a few weeks time Christians will begin to mark the season of Advent.  One of the texts often read in liturgies in that season is from the prophet Isaiah.

The people walking in darkness have seen a great light; on those living in the land of deep darkness a light has dawned.

At The Treasury yesterday, a visiting academic proposed such a vision for New Zealand’s place in the world, as the Pharos state.

Bernard Cadogan is a New Zealander now living in Oxford.  According to his bio

Dr Bernard Cadogan has his doctorate from Oxford University on Empire Studies and constitutional theory. He served Hon Bill English (1996-1999, 2005-8), the National Party Opposition (1999-2003), Hon Trevor Mallard (2003-5). He lives at Oxford UK with his wife and three children.

He was also, apparently, a foreign affairs adviser to Bill English in the latter’s brief stint as Prime Minister and has been a consultant to The Treasury on various occasions and issues.  He is formidably well-read, very fluent, often stimulating….and yet, so it seems to me, much better on history than on contemporary politics/policy, and really rather at sea when it comes to economics and economic policy.

I thought I’d written about his previous, extraordinary, Treasury guest lecture in 2016, given just a week after the Brexit referendum (a topic on which he had been providing consultancy services to Treasury), but it seems I never got round to it.    My notes record talk of “pogroms by ballot box”, of an EU that is “virulently alive” while there is “something dead in the British Isles”, comparisons with the Glorious Revolution of 1688, a summary remark along the lines of “darkness won: the fog has rolled back in”, the Brexiteers as “sons and daughters of the counter-enlightenment”, depriving young people of “a second European homeland so that some might have a Narnia”, and so on.   As it happens, the text of that earlier address is still on Treasury’s website –  which enables me to quote in its full “glory” this quote, only the gist of which I’d managed to jot down at the time.

Irrational romantic nationalism and the archaic narratives of historians and of the nationalist culture industry have prevailed over rational economic argument. Grub Street and Grub Street politicians from “Spectator-land”,  with the prose skills of another era, have worsted the experts and the technocrats, and rendered nugatory the best quantitative techniques.

You get the sense that Dr Cadogan wasn’t very keen on Brexit.

In yesterday’s address there was none of that tone at all.  It was quite a remarkable transformation, especially when Brexit still hasn’t happened –  if I heard correctly that might have something to do with consultancy services Cadogan is now offering to parts of the UK government.  But it seemed to be there by counterpoint, in his theme that in this troubled and turbulent world

Throughout his talk Dr Cadogan uses the image of the great lighthouse of Alexandria to represent New Zealand’s personality in global affairs, as a source of hope and comfort to countries and peoples sailing turbulent waters.

It was bringing to mind more of Isaiah

40 Comfort ye, comfort ye my people, saith your God.

Speak ye comfortably to Jerusalem, and cry unto her, that her warfare is accomplished, that her iniquity is pardoned: for she hath received of the Lord‘s hand double for all her sins.

The voice of him that crieth in the wilderness, Prepare ye the way of the Lord, make straight in the desert a highway for our God.

Every valley shall be exalted, and every mountain and hill shall be made low: and the crooked shall be made straight, and the rough places plain:

It was, and is, more than a bit of a mystery as to why anyone much –  at least in the advanced world –  should look to New Zealand for anything, let alone “hope and comfort”.  Cadogan never did address that point, apart from some quick passing reference to questions he gets abroad –  presumably from people within his own ideological bubble – about “how does New Zealand do it?”.  “It” here also never being defined, but I presume it had something to do with the popular adulation, in a few quarters abroad, for our current Prime Minister (shorn of any actual policy programme).

The lecture began with a painting by Nicholas Poussin in which the (small) servant Cedalion guides the giant Orion towards the sun, and healing.  Small nations may, Dr Cadogan asserts, have special powers –  at least if they can avoid getting stomped on by giants.   And New Zealand….oh New Zealand,

  • that radical democracy (the “most radical”)
  • exemplary in so many respects
  • admired for our democracy, values, responsibility, human rights, decency
  • a successful market economy,
  • excellent institutions,
  • where the Treaty of Waitangi combines utopianism and justice,
  • and where there is no hatred, no contempt, no ideologues (he seemed particular exercised here about some UK former junior minister, now ennobled as Lord Freud).

(He claimed that Henry Kissinger had once said that law was New Zealand’s greatest gift to civilisation. I’m not sure if someone was getting confused with Solon, or even Coke or, say, Blackstone.)

We, in Cadogan’s view, have a story to tell the world, we could be a “moral realist” “force multiplier” to the world.

There have been times in our past when a good number of serious people abroad have looked to New Zealand as some sort of exemplar.  Like them or not, the reforms of the Liberal governments in the 1890s attracted many visitors and attempts to explain the New Zealand story over the next couple of decades.  Probably not entirely unrelatedly, New Zealand was also among the handful of most prosperous places on earth.

There was a somewhat similar effect in the wake of the reforms of the late 80s and early 1990s.  Like them or not, they were adopted with energy, verve, vigour, rigour and with some genuine innovation. By this time, people –  here and abroad –  knew that New Zealand had fallen well behind (economically, and in terms of what a strongly performing economy could offer) and the reforms were some sort of beacon of hope, that would put New Zealand back on a high-performing path.  You still find the occasional residue of that sort of sentiment –  although mostly from people who haven’t looked at any data for the last 25 years.     In that period there was, at least among some on the left, some admiration for the New Zealand ban on nuclear ships –  some genuinely hoping that it would show the way to other countries (typically it didn’t).

But quite what are we to suppose that people –  elsewhere in the advanced world – should look to us now and admire or envy?  I’m at a loss.  A questioner in yesterday’s seminar pointed to the disgrace that is our housing market, the rise of homelessness etc.  I’d, of course, frame the issue more broadly, and highlight our continued relative economic decline.  In 1900, you might have missed great art and architecture, museums etc if you came to New Zealand, but at least average incomes would be as high as on offer anywhere.  Now, you face distance, a pretty thin representation of the best of our civilisation, and you get to be materially less well-off than you’d be in most other advanced countries.   Are we “leading the way” on climate change, or any other left-wing causes?  Not that I’d noticed.   No doubt there are niche areas where New Zealand people are well-regarded (one hears it re trade negotiations, but then again why not unilateral free trade?) and few people are ever likely to express much angst about New Zealand (a threat to no one).  But a light to the world?  Really?  Who is looking?  Who cares?  Where, for that matter, are these “values” Cadogan talks of –  none that are admirable on display re the PRC (and for a lecture supposedly on geopolitics, there was almost no mention of China).

Another questioner noted that for all Cadogan’s praise of our democracy, actually there were few checks on the executive, great concentrations of power, and little effective accountability.  It more or less stumbles on, but to what end?  And how resilient would it prove to be if really put under pressure?  The questioner might have added specific points about how weak the media generally is, the limited range and poor quality of much of the public debate, the weak role academics and think-tanks play here, and the degradation of the capability of the upper reaches of the public service.

Yet another sceptical questioner –  Prof Girol Karacaoglu from Victoria University –  noted that for all Cadogan’s talk about New Zealand exceptionalism, he (Karacaoglu) was reminded of a line from a book he’d read –  John Gould’s  The Rake’s Progress – soon after coming to New Zealand 40 years ago, suggesting that things in New Zealand both good and bad tended to follow, perhaps 15 years behind, trends from abroad.

Are there valid points in what Cadogan was saying?   Yes, although some probably don’t carry much substance.  Are we a great power or a small player?  A small player.  Ever was and probably ever will be.  Do small countries survive the rise and fall of great powers?  By and large, yes.   And are there areas in which it is more likely that we can learn from other small countries –  and perhaps work effectively with them – than from very large countries?  No doubt.

Cadogan urges a peripatetic “colloquy” of small countries –  he listed Norway, Sweden, Finland, Denmark, Netherlands, Portugal, Switzerland, Ireland, Australia and Canada (the latter two far from small) and “perhaps” Uruguay.  This grouping could, he suggested, learn from each other.   It is hardly a new idea, and of course in many areas of policy there are just such groupings (eg a “small inflation targeters” grouping of central banks).     But it wasn’t really obvious what New Zealand had to offer or –  at least on some key issues –  learn.    Our strategic position is very different from almost all these countries.  Which is a variant on the point that our geography is very different –  incredibly remote –  and there are few/no relevant national comparators (and not very encouraging subnational ones) when one contemplate the implications of that remoteness.    Perhaps Uruguay fits the bill, but for all its relative success in the last decade or so, it remains materially poorer and less productive –  with less of a record of political or economic stability – than New Zealand.

Cadogan seemed very taken with Ireland –  he’s an Irish citizen too apparently – but showed no sign of appreciating that for all of Ireland’s exaggerated GDP per capita, once you look at the bit of economic activity benefiting the Irish people, Ireland’s story (prosperity) is nothing out of the ordinary: it is a fairly prosperous (but not first rank) European economy, and if there are lessons for New Zealand they are mostly about what we can’t do (not being a short distance from hundreds of millions of other very prosperous people).

There was upbeat talk about what a difference a New Zealand Nokia –  a big brand signifying New Zealand –  might make: Cadogan saw such a brand as a “sports lifestyle” one that would “walk through the walls that ideology imposes”.  Perhaps, but isn’t this just wishful thinking?   A bit like the talk, inspired by mention of the top Swiss universities, of what a difference it might make if New Zealand had two really good universities, one in sciences and one in humanities.  And yet, starting relatively poor and very distant, there was no hint of how this alternative world might come to be.

There are plenty of places in the world worse than New Zealand. But the notion of the world –  advanced world –  looking to New Zealand as some sort of lead, exemplar or guiding light seems little more than ludicrous in our current diminished state.    If anything, we might be a bit of an embarrassment –  the nice little country, that did so many reforms, and yet look at them now, still drifting  ever so slightly further behind, without even a political system or civil society to insist on something better, to set a different course.  And so remote that we don’t ever matter much to most of the rest of the world.  Sure, we don’t have Donald Trump –  but, fortunately, neither does anyone else.     But we have a (former?) CCP member, former member of the PRC military intelligence system in Parliament (chairing a Select Committee no less), and no one in the establishment here says a word –  at least in the US there is disquiet, and more, about Trump.

Lighthouses –  grand or otherwise –  warn sailors off rocks.  I noticed in the NZ History Twitter feed that yesterday was the anniversary of a dreadful maritime disaster here in 1894 (one of the two or three worst days, per capita, for the peacetime loss of New Zealanders in history) –  no mention of a lighthouse in the write-up.  If New Zealand is any sort of lighthouse to the world –  on these rocks pointed at the heart of Antarctica –  it is perhaps in the form of the salutary lesson: don’t do as we did, don’t end diminished as we now are.

Fluent and stimulating as Cadogan can be, it might also be a bit more encouraging if our Treasury itself showed signs of leading the way towards a much better-performing economy.  Perhaps we never again can lead the world –  as we were doing 100 years ago –  but whether it is economic policy, housing, or just the quality of our diminished government institutions themselves, we have to be able to do better than we are now.

 

On the anniversary of the CCP seizing power

It is 70 years today since one of the dark days of the 20th century, when the Communist Party seized power in China, and renamed the country the People’s Republic of China –  rather better surely would have been Party’s Republic of China?

Of course, there were a fair number of dark 20th century days, mostly associated with one or another of the totalitarian regimes.  But when thinks of the CCP one can combine (a) the number of people in China, (b) the length of time the regime has persisted, and (c) the very great evils the regime has visited on its own people (and others).  I’m not going to argue it was necessarily worse than when the Nazis came to power in Germany: tens of millions then lost their lives, but the regime was gone again in little more than 12 years.  Or than the Communist Party coming to power in Russia, which opened the way to all manner of Communist regimes, including in China, as well as the brutality and depraved indifference (mass starvation) and loss of freedom visited on its own people and others.   On a smaller (but still large) scale the Rape of Nanking and the Japanese invasion of China would be up there.  But as a marker of evil in our world, 20th century (and now 21st) style it is a low that is hard to beat.    Absolutely dreadful as Rwanda in the 90s, Cambodia in the 70s, various other ethnic cleansings, and even the dropping of the atomic bomb. were, those were all shortlived (mercifully) and affected a handful of people by comparison with the PRC and the Party that controls it.  After all, almost 20 per cent of the world’s population lives under this particular longrunning tyranny.

And yet among too many of the “elites” in our society – whether elected or not –  that doesn’t seem to be the take on the PRC at all.     The PRC model might not be the one they’d want for their own children, but the fact that hundreds of millions of others live under such a regime (tens of millions more either starved by the depraved indifference of the regime, or murdered by the forced abortion policies of the regime) bothers them not in the least.    It isn’t just New Zealand, of course, although all indications are that our “elites” have lost of any sort of moral or values-based perspective on the PRC regime to at least as great an extent, probably more so, than so-called leaders in many other Western countries.  After all –  and not the worst of it – they tolerate a Communist Party member and (former?) member of the PRC military intelligence system in our Parliament, not as some rogue independent, but as a (recently-promoted) member of our largest political party.  And worse, so we are told by a well-connected person, they are so lacking in any decency or moral seriousness, they make light of the fact.

spy

Meanwhile, other parties in Parliament make nothing of this, and so become complicit.

Around the world, all manner of well-known, powerful or influential people in recent weeks will have been invited to functions, hosted by PRC embassies, to mark the beginning of the CCP tyranny.  Others –  people in embassies in Beijing –  will no doubt have been invited to this afternoon’s lavish military parade.   You’d suppose that decent, honourable, people would simply say no.  I’m not suggesting our authorities should have no relations with the PRC but an invitation to such an event in New Zealand might have been met by sending along, for as short a period as decently possible, a mid-ranked MFAT official.

Somewhat to their credit, the PRC Embassy in New Zealand maintains quite a useful website, with speeches and articles that typically tell one more than would ever be secured from the New Zealand side of such exchanges.    Last week there was a big reception, hosted by the Ambassador, at Te Papa to mark the Communist takeover.   The “great and the good” (well, I’ll use the label, even if there is no substance to it) seem to have flocked to it.

On September 24th, the Chinese Embassy in New Zealand held a reception to celebrate the 70th anniversary of the founding of the People’s Republic of China at the Museum of New Zealand Te Papa Tongarewa. Over 500 people attended the reception, including the Acting Prime Minister and Foreign Minister Rt. Hon Winston Peters, the Minister for Ethnic Communities Hon Jenny Salesa, the Acting Secretary and Deputy Chief Executive of MFAT Bede Corry, the Deputy Secretary of the Americas and Asia Group of MFAT Ben King, heads of major government departments and members of parliament, well-known members of the wider community in New Zealand, members of Diplomatic Corps, overseas Chinese, representatives from Chinese institutions and international students.

I’m not holding it against resident PRC citizens that they would attend such an event –  it might not have gone well for them or their families had they declined.  But what of all those prominent New Zealanders, from the acting Prime Minister on down?  Not one of them had to attend.  Every one of them made a choice to do so, a choice that said that what the regime stands for – and has stood for over the decades – didn’t matter to them one bit.    Perhaps the PM herself would have gone if she hadn’t been extolling –  emptily, as this occasion demonstrates –  the idea of a values-driven approach to policy and international affairs?  The acting Prime Minister is photographed standing with the Ambassador, unbothered (apparently) that she represents the latter day manifestation of something like the Nazi Party ca 1938.

(There was another such function in Auckland, with only a slightly less ‘distinguished’ attendance list, including such people as the National Party president, the Mayor of Auckland, and Don McKinnon, all known for their deference to the regime in Beijing.)

We are told that a Deputy Secretary of MFAT gave a speech on behalf of the New Zealand government (less bad than the Minister I suppose).    According to the embassy

MFAT’s Deputy Secretary of the Americas and Asia Group Ben King delivered a speech on behalf of the New Zealand Government, extending warm congratulations on the 70th anniversary of the founding of the People’s Republic of China.

How many tens of millions of dead would it have taken for Mr King to have found a conscience and either refused to speak or spoken out (career-limiting of course) to regret the founding of any tyrannical regime and this one in particular?  King’s speech doesn’t appear on the MFAT website, but I have requested a copy. I’m sure it will have been cleverly drafted, but not in the way that will avoid the clear immoral choice successive New Zealand governments have made around the PRC in recent times.  Values are things that have a cost, and when it comes to the PRC it isn’t clear that our politicians or officials have any values at all.  There is no sign any price is worth paying ever.  Some, of course, are particular craven in their pandering, their praise, and their lack of interest in the character of the regime (Simon Bridges as just the most recent egregious example).

Communist Party regimes around the world have proved fairly economically disappointing.   In whatever precise form the regime takes, Communism hasn’t proved incompatible with improving material living standards.   The USSR in 1991 had substantially higher material living standards than Russia had had in 1917.   The same goes for the eastern-bloc countries the Soviet Union controlled for several decades –  wealthier at the end than at the start.   Data on Laos is scarce, but no doubt material living standards are higher than they were several decades ago.  Even Cuba, for all it failures, has GDP per capita higher than when Castro took power.      Quite possible, material living standards even in North Korea (which now eschews the Communist label) are better than in 1950.  But what of it?  Almost every country in the world is richer than it was, and yet useful idiots all round the West rush to use the CCP line about how somehow the regime has “lifted out of poverty” many hundreds of millions.

The best simple test of the economic value-add of Communist regime might be to compare the economic performance of Communist countries with non-Communist one with similar cultural backgrounds, similar geographies etc.   The simplest examples, of course, being East and West Germany, and North and South Korea (the north have once been the more advanced part of the peninsula).    But we could, say, compare Austria with Czechoslovakia (until 1918 they were all part of one polity): in 1937 GDP per capita in two countries was roughly similar  but after 40 years of Communism Czechoslovakia (richer than it was 1937) had about half the per capita GDP of Austria.   Or Cuba and Costa Rica –  with pretty similar levels of GDP per capita in the 1950s, Cuba at about 75 per cent of Spain’s GDP per capita, Cuba now lags badly behind.  Or contrast Laos with neighbouring Thailand.  Vietnam with Malaysia.

And, of course, the PRC with Taiwan, Japan, Singapore, South Korea…..well, even with today’s Russia.    Sure over 70 years the material lot of PRC citizens is generally better than it was, but the level of income now lags far behind those other countries.    China once led the world economically, but now –  even after decades of catch-up growth (and some doubts about their data), their average GDP per capita (in PPP terms) is still only just reaching the world average.  Almost certainly, the Communist Party has materially held back the economic development of China and thus the income prospects of the the citizens of the PRC.

Perhaps it would be a little different if Communist rule –  anywhere, let alone China –  had been some staggering economic success.  Then an honest representative of the CCP (is there such a thing?) might reasonably ask whether materially higher living standards than were on offer in comparable, but freer, societies was not a trade-off worth making.  That is, implicitly at least, the situation in Singapore –  not free (although not PRC unfree either) but really rather prosperous, almost up at the global productivity frontiers.  But this is the PRC we are talking about.  It might buy a lot of stuff, including from New Zealand, but it has crippled the economic prospects of its own people, and taken their freedoms in the process.

Yet this is the actual regime ministers, head of departments, and other “leading” citizens have been celebrating:

  •  one where citizens don’t have the vote,
  •  one where citizens have little or no effective freedom of expression,
  •  one where the surveillance state becomes more intrusive by the year,
  •  one that holds Canadian citizens hostage, not for any real crimes, but as leverage against the Canadian government,
  •  one that engages in forced organ transplants,
  •  one that has unilaterally seized and militarised much of the South China Sea, in defiance of international agreements to which the PRC was a party,
  •  one that holds a million or more Uighur people in concentration camps,
  •  one that remains openly determined to absorb free and democratic Taiwan into the PRC, if necessary by invading it,
  •  one that increasingly deprives citizens of any freedom of religion, which might be seen as a threat to the pre-eminence of the Party

and so we would go on, barely mentioning Tibet, state-sponsored intellectual property theft, the absence of the rule of law, or the activities abroad of the likes of Jian Yang, Yikun Zhang, and their counterparts in numerous countries around the world. And it is not as if the regime is getting less tyrannical, more willing to limit the Party’s pre-eminence.

But never mind, there are drinks and canapes to consume, deals to do, donations to secure…….against which the sort of traditional values of New Zealand citizens (including many ethnic Chinese who came here to escape the regime) are set at naught and dishonoured every day, but this day perhaps more than most.

How will history judge these people – our politicians, our prominent business leaders, our journalists who take trips to China and then write PRC-favourable stories, the government-funded propagandists at the China Council, and so on?  Not well, one hopes.  No doubt, they all manage to tell themselves that somehow they have the ‘best interests of New Zealand” at heart and perhaps they even believe it, but they are deluding themselves, and dishonouring all those who value freedom, whether here, in China, or anywhere else around the world.

They shame us:

Jacinda Ardern

Simon Bridges

Winston Peters

James Shaw

Todd McClay

Gerry Brownlee

David Parker

Don McKinnon

Stephen Jacobi

Peter Goodfellow

and so on, including the galaxy of MFAT officials, other senior officials, university vice-chancellors, private business people, much of the mainstream media.

But if it is 70 years today since the CCP tyranny was established, it is also 30 years next month since the Berlin Wall fell and way was opened decisively for the end of Communism in Europe.      Evil regimes don’t last forever.  For the sake of the world, and for the 1.4 billion people in China, we should hope this one ends soon, and give no aid and succour –  or simple encouragement by turning up to share celebratory drinks – to the evil regime and its leaders while they last.