Eaqub on NZ policymaking

Shamubeel Eaqub’s column in yesterday’s Sunday Star-Times got me thinking.

The column is headed Policy flip-flopping on the road to progress although Eaqub seems to lament two quite different things.  The first is what he suggests is a tendency for policy to reverse course depending on which party is in office.

On tax, we have seen little leadership. The Helen Clark-led Labour government raised income taxes for high income earners, because they wanted a progressive tax system.  The John Key-led government then lowered those taxes, as it took its turn at the policy-making helm.

This kind of turn-based policy making which favours ideology is bad. It creates instability and loses sight of the long-term issues governments should be dealing with.  Instead we need a long-term and deliberate approach which can overcome this kind of policy yo-yo.

And the second is something about failures of New Zealand policymaking more generally

Bad policies often hang around like weeds, because we don’t have a good system to review past policies and undo them if necessary.

The demands for action and leadership are justified. But we should not be so hasty to deride collaborative and transparent approaches to policy development.

They are a good counter to the current way that has allowed big social and economic issues to accumulate over decades.

I’m not convinced on the first score.  For decades now, the similarities between our two main parties have been much more apparent than the differences.  Even in the brief periods of radicalism, Labour briefly wrong-footed the National Party in the mid 1980s, then National had its own brief spurt of reforms in much the same general spirit, and then before long both parties had settled back to doing not very much at all.  In many ways, the similarities aren’t so surprising –  there is plenty of political science and economics literature to predict that sort of clustering to the centre.

There are exceptions of course –  such as the maximum marginal tax rate example Eaqub describes.   Another example might have been the 90 day trial periods promised (and implemented) by National in 2008, and being partially unwound now.   And the exceptions aren’t necessarily a bad thing.  We do, after all, live in a democracy, where parties compete for your vote.  One likes to think that at least some of that competition might be based around different visions, and differences of the best practical ways to achieve even agreeed outcomes, not just on (say) who has the cutest kids or makes the best pizza.  Reasonable people will, at times, take a quite different view on (a) priorities, and (b) mechanisms (not just what “works” but what is “socially acceptable”).   The hankering for “a long-term and deliberate approach which can overcome this kind of policy yo-yo” has disconcerting similarities to the talk of the alleged superiority of the approach adopted in the People’s Republic of China: one party, and now one leader, indefinitely supposedly facilitates good long-term reform.  None of that pesky competition of ideas, interests, and individuals.  Shame about the outcomes there.

So which party is in office is supposed to make a difference –  and not just to the faces on the covers of the women’s magazines.

But I’m much more sympathetic to Eaqub in his concern about longer-term policymaking and associated advisory capability.   And that probably does spillover into Eaqub’s concerns about some of those short-term initiatives parties promise to win elections

Too many policies are populist, turn-based or just ill-thought out

Eaqub laments the state of the public service.

The civil service has a role here, as the generators and repositories of policy ideas, rather than just the delivery mechanism of ministers’ ideas that it has become.

Beaten into submission over decades, our civil service is more likely to say “more research required” on a problem, like an academic, rather than offer a well-formed recommendation.

In some respects it is hard to disagree.   Observing the quality of the analysis and advice coming out of The Treasury and MBIE instills no confidence whatever.  But while ministers have not often not welcomed, and at times actively discouraged, free and frank advice, the problem isn’t only with politicians.  The Treasury’s continued failure to have a compelling narrative of why our economic performance continues to lag behind isn’t really Bill English’s fault –  it is the failure of the institution itself (more interested, apparently, in well-being studies) and perhaps of those –  the State Services Commission –  that appoints heads of government departments.  Sir Robert Muldoon –  no great fan of The Treasury –  didn’t prevent The Treasury being well-positioned in 1984 with ideas, analysis and energy that helped facilitate the reforms of the following decade.  But that was probably an historical exception, and perhaps it is unrealistic –  even in a small country –  to really expect the public service to lead in ideas-generation around desirable reforms.  Apart from anything else, the incentives are all wrong, and the inevitable constraints militate against it.

Perhaps we have bigger weaknesses than our public service?    Think-tanks are few –  and our most consistently fertile one (the New Zealand Initiative, and is predecessor the Business Roundtable) tends to be located towards a libertarian end of the spectrum where very few likely voters are.  And in many areas, the contribution to policy-related analysis and debate from university academics is pretty thin, or often almost non-existent.  There are understandable reasons –  the PBRF ranking/funding model prioritises refereed journal articles and academic books, and recruitment policy (no doubt for good short-term economic reasons) often prioritises cycling through young foreign academics with little knowledge of, or interest in, the specifics of New Zealand.   Whatever the reasons –  and some of them may just be the limits of a small country – the policy-related inputs are often pretty thin.

But I wonder if the bigger issue still isn’t the lack of demand for anything different.  After the ructions of the 80s and early 90s there seemed to be both a shared elite consensus that reforms had been done pretty well, and it was only a matter of time until we saw the fruit.  And when the fruit (mostly) didn’t show up to the extent hoped for, there was a shared reluctance at a political level to risk more change –  perhaps particularly on the left (where the Labour Party had split).   For many people, life in New Zealand isn’t too bad at all, so why risk rocking the boat –  memories (and folk memories now) of the 80s and 90s.

And the “policy elite” (whether or a broadly-left or broadly-right persuasion) still mostly tend to hold some views that probably haven’t served New Zealand that well.  For example:

  • the broad-based low rate (BBLR) tax system, which keeps getting praised (including abroad) but typically isn’t imitated.   We tax returns to savings materially more heavily than most countries do, and that is increasingly true of business investment too,
  • the deep-seated belief that high levels of immigration are a “good thing” –  generally, and for New Zealand (even as the proponents are unable to produce evidence of those benefits for New Zealand).  The belief might be rooted in history (settler societies and all that), general economics literature, and the dread fear of being accused –  eg by the NZ Initiative –  of “racism” or “xenophobia, but whatever the reason, it no longer serves us well,
  • the endless deference to the People’s Republic of China, and the narrative that has somehow been allowed to grow up that somehow our fragile prosperity depends on keeping on side with the PRC,
  • the indifference to the fact that New Zealand has had consistently the highest real interest rates in the advanced world (and amomg the slower rates of productivity growth) –  the rhetoric for a long time (again a legacy of past decades) was that such differences can’t persist, unless they are risk-based,
  • a shared belief in the importance of technology and the tech sector, and more of a desire to belief than a willingness to ask hard questions about the likelihood of such industries developing, and remaining, here,
  • the implicit belief that our physical location doesn’t matter much (occasional talk about “costs of distance” notwithstanding) and thus an implicit view that analysis fit for small northern European countries is just fine for a really remote South Pacific one,
  • a largely shared indifference to the persistence of a very high real exchange rate.  Some of this indifference no doubt relates to the memories of controlled exchange rates past, or to journal articles characterising exchange rates as random walks, but again whatever the reason, it holds people back from seriously engaging with this symptom of our problems.

Of course, there are other issues on which the “policy-elites” are on the side of the angels –  there is probably a pretty strong consensus on raising the NZS age and even age-indexing it in future –  but there are high political barriers.

And other issues like house prices – perhaps even family breakdown –  where New Zealand’s policy failures aren’t much different from those in many other parts of the Anglo world.

Probably it is much easier to do reform, and even craft some sort of elite support for it, when the issues look like ones that involve converging towards what everyone else is doing.   That was, more or less, the story we told in the 80s and early 90s.  Even when the details of things done here were sometimes world-leading, the overall narrative was one in which we had failed to open up and reform in a way that other countries had, or were doing.  We just need to catch-up, and in the process could do some innovative stuff.

But what of now?  No country anywhere is doing much to do structurally with house prices –  and for most people in most of the rest of the world, those successful parts of the US without the problem seem to be treated as little more than a curiousity, of which most are barely aware.  No one is fixing the “family breakdown” issues either, and so we drift like the rest.

And addressing our economic underperformance looks as though it might require stepping away from some of the OECD rhetoric.   That can be hard to do (perhaps especially for officials), absent some compelling figure with an alternative narrative and the political skills to take people with him/her.

To get back to Eaqub’s article, he began by noting that

When a new government forms, there is usually a flurry of studies, task forces, working groups and advisory panels.

That has been right, at least with recent governments.  But perhaps what is most notable about many of those groups is the typically limited resources and limited time they are given.  He cited the Jobs Summit –  done over a couple of months, culminating in a one-day jamboree –  or the 2025 Taskforce (so under-resourced the one foreign appointee couldn’t really believe it). But he could have mentioned the current Tax Working Group too, which is operating on pretty tight deadlines, with limited specialist expertise.   Some of these groups, even with limited time/resources, have produced some useful material.  But they are often more about political management than about actually getting to the bottom of some serious and knotty problem.

This post has been pretty discursive, probably more useful for clarifying my thinking than for anyone else.  I think my bottom line is something along these lines:

Political flip-flopping is the least of our problems.   And the public service –  while quite degraded in its policy capabilities –  is perhaps not a body one could ever hope for much from on a sustained basis.  Our university and think-tank sectors are weak, when it comes to policy analysis and associated innovation.  But perhaps the biggest obstacle to change –  whether around the issue this blog most often focuses on, productivity underperformance, or most others –  is the absence of any political (or, presumably, public) demand for different outcomes, buttressed by “policy-elites” who seem to share assumptions and presuppositions that might have looked fine 25 years ago, but which –  on my argument – don’t do so now.  Without alternatives –  that might go over well at the OECD, the IMF or the like – it is just easier to hold on to those presuppositions, and the comfortable life most enjoy.       It is a recipe for continued drift, which is of course what we saw under the last two governments and what we seem set for under the current one.   It isn’t obvious what, or who, might credibly lead us to something different.

From the weekend current affairs shows

Two of the government’s top four ministers appeared on the weekend TV current affairs shows. It wasn’t encouraging.

The Minister of Finance appeared on TVNZ’s Q&A.   There was a great deal of talk about boosting wages –  after several years in which real wage growth has outstripped (almost non-existent) productivity growth.  But nothing about credible steps that might lift productivity growth itself.  It is easy to spend money, but much harder to generate the foundations for higher incomes in the first place.   And there seemed to be no recognition whatever that the real exchange rate has been increasingly out of line with the dismal productivity performance

rer and rel GDP phw

or, not unrelatedly, that the export share of New Zealand GDP has been shrinking, not rising.  And, of course, no plans, no suggestions even, as to what might be done to reverse this decline.

There was talk of the tax system having, it was claimed, underpinned a “speculative economy”, but no sense of how the Minister of Finance saw possible tax system changes producing materially different outcomes –  notably around house prices –  than they have in Australia, the UK, Canada, or much of the coastal US.    Nothing, of course, about fixing the fundamental problem: land-use restrictions, the effects of which appear to have become increasingly binding (some nice new evidence on just that point from Australia was published last week).

There was blather about the forthcoming ‘wellbeing budgets”, built on The Treasury’s living standards framework, but no sense of how decisionmaking was going to be improved or economic (or other) outcomes improved.

There was a lot of talk about the “future of work” –  one of the Minister’s favourite themes –  and the potential to support workers facing displacement by the advance of technology etc, at a time when the employment rate and the participation rate are both higher than they’ve been at any time in the 30+ years history of the HLFS data.

There was enthusiastic talk about the economic benefits of immigration, but no evidence or argumentation.  And for all the talk about “skills gaps” no recognition of the OECD data suggesting New Zealand workers are among the most skilled of any in the advanced world.  And for all the allusions to the role of immigrants in building houses, no apparent recognition of just how few construction workers are among the immigrants, or of the new research published by the Reserve Bank of which the authors note (and which in many ways just repeats what New Zealand economists knew decades ago)

The estimates further suggest population change may be ‘hyperexpansionary’ as the residential construction demand associated with an additional person is higher than the output they produce. In these circumstances, population increases raise the demand for labour and create pressure for additional inward migration, potentially explaining why migration-fueled boom-bust cycles may occur.

And that was just the Minister of Finance.

On Saturday, the Deputy Prime Minister and Minister of Foreign Affairs had been interviewed on The Nation.   When I read the news story about the interview I couldn’t quite believe what I was reading, and went back to watch the interview to see if Winston Peters was being fairly reported. He was.

It was bad enough to find New Zealand’s Minister of Foreign Affairs appearing to defend Donald Trump’s tariff policy.   I can understand that it might not have been diplomatic to have openly attacked them as rushed, ill-considered, dangerous and not grounded in any decent economic analysis.   In other words, stepping around the issue delicately would have been one thing.  But the defence of Trump was pretty shameful –  the more so in a week when the government of which he is Deputy Prime Minister was signing up to what it would have us believe was a new “free trade agreement”.

But rather than oppose the move as detrimental to free trade, Mr Peters said Mr Trump was reacting to unfair deals.

“What’s Donald Trump’s biggest complaint? It’s that countries shouting out ‘free trade for America’ don’t practise free trade themselves. In fact it’s New Zealand First’s and my complaint that the countries we deal with apply tariffs against us whilst we’re giving them total and unfettered access to our country. It’s simply not fair.”

He said Mr Trump’s move was “not Luddite, it’s not old-fashioned”.

“It happens to be an economic fact which some propagandists of the free market tenet should face up to, and describe why it’s not fair for Donald Trump to do what he’s doing.

Do the Minister of Finance, the Minister for Trade and Export Growth, and the Prime Minister agree with this sort of “trade as zero-sum” analysis and approach, that threatens to further undermine the WTO arrangements governing world trade, which have been of considerable value to New Zealand?

But our Minister of Foreign Affairs hadn’t finished.    He also went on record as one of the few people left, outside the Russian government, asserting that Russia had not been attempting to meddle in the US 2016 election.    Reasonable people might differ on whether there is any real evidence that such meddling made any material difference –  as staunch an anti-Putin anti-Trump observer as Masha Gessen remains very sceptical.  One might even take the view that it is not really any of New Zealand’s business.  But for our Foreign Minister to actually be weighing in in defence of Putin should be inconceivable, inexplicable, and indefensible.  Sadly, it is now only the latter two.

But even that was just the entree.  The crowning outrage was the attempt by our Deputy Prime Minister and Minister of Foreign Affairs to suggest that the Russian authorities had no part in any responsibility for the downing of the Malaysian airliner over Ukraine and the deaths of 298 people.  Sure, Vladimir Putin himself didn’t the fire the missile (leaders rarely do) but as David Farrar summarises it

the Dutch investigation found the Buk missile system was transported from Russia on the day of the crash, fired from a rebel controlled area and returned to Russia after it was used to shoot down MH17.

If the Minister just wanted to mount an argument that our firms can still trade with evil regimes –  a point he went on to make – that would be one thing.  After all, our governments have been pursuing deals with Saudi Arabia, even as it is primarily responsible for the ongoing disaster in Yemen.  If he wanted to make an argument that there are bigger threats to the world than Russia –  China say? –  reasonable people could also debate that proposition.

But to minimise the Russian regime’s responsibility for what was an act of mass murder of innocent, otherwise uninvolved, civilians is just shameful, indeed disgraceful.  It shouldn’t be allowed to pass quietly by by the Prime Minister, the rest of her Cabinet, or (say) the leaders of the Green Party on whom the government also depends.   What sort of country would we be becoming if a senior minister can get away with lines like this?

It seemed to be a weekend for trivialising the really dangerous stuff by use of spurious –  and insulting –  comparisons.   In the same interview, Peters seemed to compare Russsa’s actions in Ukraine (or the US) with Australia’s in legally deporting from Australia non-citizens convicted of committing crimes in Australia.  And in another interview a few days ago Peters seemed to be attempting to draw parallels between the activities of the government of the People’s Republic of China in the Pacific (and presumably New Zealand) and those of private citizens among the Samoan and Tongan diaspora in New Zealand.

Amidst fears about outside influence from the Chinese in the Pacific, Peters is quick to note that New Zealand possesses some influencers of its own.

“One of great forces in Tongan society is the Tongan society in New Zealand, that’s where an enormous amount of remittance money is coming from, and that’s the same for Samoa.

“So when you talk about outside influences, bear in mind that we have massive outside influences on Samoa.”

If you refuse to actually confront real threats, that is one thing, but don’t insult us – or our friends, allies, and even our citizens –  with such efforts at trivialising those threats, those behaviours.





Bad economics from the China Council

For several years, Donald Trump has made much of the bilateral trade deficits between the US and Mexico, and between the US and China.   That rhetoric was to the fore again last week when Trump announced the imposition of steel tariffs.  This was from one of Trump’s tweets on Friday

Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!

I’m not aware of a single economist –  with the possible exception of Trump adviser Peter Navarro –  who regards this focus as meaningful or as sensible economic analysis. At an aggregate level, a country’s overall current account balance is a reflection of the savings and investment choices of its own residents.  Thus, if for some reason one were concerned about a US current account (or trade) deficit, one thing that might make a difference could be a cut in the US fiscal deficit (lowering public dis-saving).

The mercantilist mentality, revived by Trump, sees trade deficits as, in some sense, a loss to the country, perhaps by analogy to the situation of a company running deficits (losses).  But the parallel is simply wrong.  Trade deficits are no more presumptively bad than trade surpluses are presumptively good.   Both can be reflections of bad policies, or indeed of good policies.  To the extent that the purpose of economic activity is to consume, trade deficits typically mean that of what your country produces not much is sold abroad, relative to what is purchased from abroad.  If product isn’t sold abroad it is available for domestic consumption.  And trade surpluses can be indicative of a deflationary impulse emanating from your country –  you are selling stuff abroad (absorbing demand from other people), but not matching that with an equivalent demand for the stuff others have produced.

I don’t want to be read as taking these arguments too far.  There have been plenty of trade imbalances (current account imbalances) that proved to be quite unsustainable, and the subsequent adjustment process was often quite messy and costly.  In the very long-term, and roughly speaking, people consume what they earn.  So sometimes, large aggregate imbalances can be a prompt to review policies.  Large surpluses in a fixed exchange rate country, for example, might finally trigger an upward exchange rate adjustment (as in China a decade ago).

But the argument is even more than usually flawed when focused on individual bilateral surpluses/deficits, which have almost no economic meaning.  That, in turn, is so for a variety of reasons.   At a statistical level, in an age of global value chains, any finished product (especially manufactured products) is likely to have been added in a number of countries, but the country where the finished product is exported from will record all the value in its gross exports.   An Airbus aircraft, for example, might have its final assembly in France.  If the plane is sold to, say, a Turkish airline, the full value of the plane will be included in the Turkey-France trade balance, even though much of the value might have been added by firms in, say, Germany or the UK.

And at an economic level, since money is fungible –  and we aren’t in a world of 1930s bilateral clearing agreements – why should anyone in the United States care whether there is a trade deficit with Canada and a surplus with France, or vice versa?   What is earned in one place can be spent in another.   Almost all of us, as individuals, have a goods deficit with the local supermarket, offset by the primary income surplus derived from selling our labour to some other firm.

At a country level, a country exporting mostly, say, diamonds might have a huge trade surplus with Belgium and Israel (places with specialist diamond-cutting industries), and large deficits with most other countries (spreading consumption more broadly).  What of it?  New Zealand won’t export many dairy products to, say, Ireland or Denmark, but might to desert places with not much of a dairy industry.  And what of it?

None of this is to suggest that there aren’t bad policies, or policies which distort the trade numbers.  But if the policies are bad –  eg China’s restrictions on access to its markets for service sector firms, or lack of market disciplines on firms in some sectors with major overcapacity, large US fiscal deficits when the economy is back near full-employment, or New Zealand policies which, in effect, subsidise export education by bundling immigration access with the commercial product –  they are bad on their own terms, regardless of any impact on particular bilateral trade balances.

But this isn’t a post about Trump and his take on economics. It was prompted by a rather similar outbreak of Trumpian economics from someone local who really should know a lot better.    I wrote last week about the speech from Stephen Jacobi, the Executive Director, of the New Zealand China Council attempting to push back against concerns raised in various quarters about the influence activities in New Zealand of the People’s Republic of China and the Chinese Communist Party.  Jacobi doesn’t have any specialist background on China –  he’s a paid advocate –  but he does apparently have a strong background in trade issues, from his time at MFAT, and subsequently as a lobbyist for trade liberalisation.

But his latest statement, released on Friday, left me thinking he must have put any economics to one side.    We were told that

China trade surplus shows relationship working in our favour

March 2, 2018

New figures out today showing a $3.6 billion trade surplus with China demonstrate the value of our growing economic connections with China, according to the New Zealand China Council.

It does no such thing.   Bilateral trade surpluses aren’t “a good thing” (or a “bad thing”) and bilateral trade deficits aren’t “a bad thing” (or “a good thing”).  They just are.

Here is a chart showing the bilateral goods and services trade surpluses/deficits for the top 25 “trading partners”, taken straight from an SNZ table.

bilateral trade surpluses

It is a mildly interesting chart, but I’m not sure it tells us much about anything, and certainly not about trade or economic policy.   Should we think better of Algeria and Sri Lanka  (which presumably have a taste for milk powder) than of Switzerland and Thailand?  I can’t think why we should.  And I suspect that if the bilateral balance with China ever swung into deficit –  and it does move around quite a bit with milk powder prices –  Mr Jacobi would be the first to (rightly) push back against true local mercantilists suggesting that such a deficit was reason for concern.

It isn’t even as if the trade by New Zealand firms with Chinese firms is extraordinarily large.  It is about the same size as our trade with Australia –  a country with about 2 per cent of China’s population.  Overall exports/imports as a share of GDP aren’t large at all for a country our size.  And here is quick table New Zealand China-based economist Rodeny Jones put out last week

NZ has only middling trade exposure to China by regional standards:

% of exports to China/HK 2017

Taiwan 41%
Australia 37%
Korea 32%
Singapore 27%
Philippines 25%
NZ 25%
Japan 24%
Malaysia 19%
Thailand 18%
Indonesia 15%

Mr Jacobi’s argument has the feel of rank opportunism.   Perhaps that might be acceptable in a corporate lobbyist (although I doubt it in the longer run) but Jacobi’s salary as Executive Director of the New Zealand China Council is largely paid by the New Zealand taxpayers.  We deserve better.

As it is, Mr Jacobi’s questionable economics is just the basis for another bid for New Zealand to maintain its subservient, deferential, attitude towards Beijing, and not get bothered about an expansionist hostile power seeking to exert influence in New Zealand politics.

“We need to see China as more than just a market. In New Zealand, China is looking for a long term, reliable partner which means working hard to build cooperation, trust and mutual respect even despite our obvious differences.

Indeed, the PRC is more than “a market”.  It is the government of a repressive dictatorial state, unable to produce for its own people the sorts of living standards places like Taiwan and South Korea have achieved, with an active agenda –  hardly masked –  of projecting its powerful and fundamentally different values [Jacobi’s own term from his recent speech] into countries and regions around the world, defying international law, and attempting to cow any country that makes a stand for its own values and its own self-respect.  It isn’t a regime worthy of trust, or respect.  Perhaps there are some trade opportunities for individuals, but it should be a clear case of “seller (or buyer –  but the sellers tend to have more concentrated interests) beware”,  in which it is more recognised that every time you defer to the regime, you advance an evil cause.

A bit like our politicians really.  Just occasionally, there is reason to think that perhaps our Minister of Foreign Affairs might take a different view.   There were the very delicately-phrased words in his speech the other day about Chinese activity in the Pacific.  There was the response, in after-speech questions, about the memorandum of understanding the previous government signed with the PRC on the Belt and Road Initiative (“I do regret the speed with which the previous government signed up”).

But what does it amount to?  Here is Winston Peters on Q&A yesterday, from the transcript

CORIN You know full well that the Chinese will be watching every word you’re saying right now. Are you worried that there could be—? They don’t like public declarations about the South China Sea from New Zealand. I know that. Are you concerned?

WINSTON No one has been more respectful of the place of modern China in the world than New Zealand First and Winston Peters.


CORIN So do think there is too much? Because, I mean, we’ve got Anne-Marie Brady’s report. We’ve got Rodney Jones, Michael Reddell, others raising concerns and wanting a debate about Chinese influence in New Zealand – politics, but wider life. Do you think there is too much influence?

WINSTON Look, if you’re concerned about too much Aussie influence when it comes to banking you should say so upfront, and I have. If you think there’s been too much untoward American influence in this country in some ways then we should be upfront and say so, and I have. It doesn’t matter where it emanates from.

And thus our Foreign Minister, in his own inimitable style, but in much the same patterns as decades of his predecessors, trivialises the issue.  Just like Mr Jacobi in that speech a week or so back,

Of course, the other side of politics is no better.   Simon Bridges was also on Q&A.  Here he is on the Belt and Road initiative, a mechanism for Chinese power projection in many countries, partly (but not exclusively) by loading pliant recipient countries up with debt they have little prospect of servicing.

[UPDATE: Just after completing this post I noticed this new report on the debt aspects of OBOR.]

CORIN Give me an example of what the Belt and Road means?

SIMON Well, it means economic opportunity, and what do I mean by that? Infrastructure. You’re seeing China invest significantly in infrastructure around the world–

Never mind the strategic foreign policy perspectives, but there might be some consultancy opportunities for New Zealand firms.  It is reminiscent of Lenin’s line about the capitalists selling the rope they will, in time, be hung by.

I also heard Bridges on Morning Report this morning. It was straight out of the John Key playbook.  We will “engage positively”, and might even (quietly) mention the rule of law, democracy etc, all while avoiding the issues that should matter rather more to other countries, including New Zealand –  the expansionist efforts of the PRC beyond its own borders, and the influence activities in an increasing range of other countries, including our own.  I haven’t yet heard Bridges grilled about his MP Jian Yang, but on what we’ve heard so far there seems no reason to believe that he has departed from the Key/English approach (largely shared by the Labour Party) –  selling out our birthright, little by little, for the proverbial mess of potage.   Keep the deals flowing for the selected business elites, keep the party donations flowing and never mind any self-respect, or frank discussion of the nature of the regime, and the nature of the threats it poses.




New Zealand and the PRC: links and questions

Anne-Marie Brady has been at the forefront of identifying, and highlighting, the ways in which the People’s Republic of China, through the Communist Party’s United Front work programme, appears to have been attempting to influence, and interfere with, public life in New Zealand –  both among the local ethnic Chinese community, and more generally.  Her Magic Weapons paper remains required reading, and for all that apologists have attempted to brush aside the issues raised in the paper, no one has made any serious efffort to engage with, and refute, the concerns she has raised.

Most other New Zealand academics, with familiarity with the Chinese language, have stayed silent.  But another person –  with Chinese language –  who has written, quite extensively, about the New Zealand situation is the author of the pseudonymous blog Jichang Lulu.    He has a new and substantial piece (if characterised by an idiosyncratic style) on the United Front activities in New Zealand, which is likely to repay reading for anyone interested in these issues.  Whoever the author is, his usual focus is regions far from New Zealand (Nordics) but has been paying a lot of attention to the New Zealand situation in the last year or so and appears to be quite well-connected.   I linked the other day to his detailed piece on PRC efforts to attempt to bring Norway and Mongolia to heel.

Much focus in recent months has been on National Party list MP Jian Yang.  But, of course, National is in Opposition at present. Jichang Lulu has raised specific concerns about senior Labour backbencher Raymond Huo, who also appears to have close connection to the PRC regime.   From his latest post

According to a source with knowledge of the matter, recent requests from a CCP-unfriendly NZ Chinese organisation to have ministers send Chinese New Year greetings were reportedly redirected to Raymond Huo, effectively making the ruling party’s leading United Frontling, whose PRC-consonant views are wellknown, the government’s gatekeeper to contacts with the Chinese community. In contrast, ministers and other politicians didn’t hesitate to attend celebrations with PRC diplomats. In other words, the Party-state, through its local advocates, can vicariously veto official support for something as apolitical as a calendrical festivity, at least when the persons seeking such support happen to have Chinese surnames.

Huo currently chairs Parliament’s justice committee –  responsible for the triennial review of the election, and for handling new electoral legislation more generally.  And the way governments typically turnover their members, there has to be a pretty significant chance that he’ll be a member of the executive before this parliamentary term is out.  Much focus in recent times has been on past and present ties of senior National Party figures to PRC interests.  But with Labour in government –  and their party president an effusive public supporter of Xi Jinping –  it is about time harder questions were asked of the new government.

Another thing worth reading (although behind a paywall) is an article in The Australian today under the heading Cold War: Freeze on China Ties.  It builds on reports last week that

university leaders were concerned about Chinese government attempts to dissuade ­students from coming to Australia to study. In an escalation of the pressure on universities, school visits have been cancelled, senior educational meetings in Beijing have been “postponed” and messages warning of the dangers of studying in Australia have been posted on the website of the ­Chinese embassy in Canberra.

claiming that

China is putting Australia into a diplomatic deep freeze, stalling on ministerial visits, deferring a trip by our top diplomat and putting off a broad range of lower-level ­exchanges to pressure Malcolm Turnbull over the new foreign ­interference laws and naval challenges to disputed Chinese claims in the South China Sea.

Government sources are reported as conceding that “there is a diplomatic and ­bureaucratic stalling over a range of visits, as Beijing voices its ­displeasure at foreign-­interference laws”.

I guess this is the sort of thing that the subservient apologists in our own political, bureaucratic and business establishment worry about.  But perhaps it should prompt them to think again about the nature of the regime they want to cosy up to.    The PRC might have some capacity to hurt individual New Zealand economic sectors –  as, say, the Mafia or organised crime might in other countries – but our prosperity as a nation is simply not based on those firms’ trade with China.   And sometimes, just occasionally, there are advantages to distance: Korea, Vietnam, or the Philippines (let alone Taiwan) have to live with the PRC on their doorstep.  We don’t, and it is surely time to reflect on what manner of regime they abet, whether actively or by silence.

The other day, New Zealand Prime Minister gave her first major foreign policy speech.  As far as I could tell, it was better than it could have been on the PRC.

China’s global influence has grown along with its economic weight.  Its leadership on issues like climate change and trade liberalisation could add momentum to our collective efforts in those areas.

Naturally, there are areas where we do not see eye to eye with China.  My government will speak honestly and openly with our friends in Beijing.  Whether it is about human rights, pursuing our trade interests, or the security and stability of our region.

Taking that approach isn’t about singling countries out, , but about taking a consistent approach on the issues and principles that matter to us.

It wasn’t very grovelly –  none of the nonsense Murray McCully was using just a few months ago about China saving us through the financial crisis of 2008/09 –  although anyone who thinks China is somehow at the forefront of global trade liberalisation hasn’t looked very closely (or doesn’t wish to).

By contrast, here is Julie Bishop quoted in that same Australian article

After Mr Trump said he would “love” Australia to join the US in military passages through Chinese disputed territorial waters, Mr Turnbull refused to say in advance when an operation would take place. Such an operation, which the US has conducted in the past, would contradict ­Beijing’s claims of sovereignty in the South China Sea and assert the right of free passage for international shipping.

In Australia, Ms Bishop said: “We have been traversing the South China Sea for many years in accordance with international law and we will continue to do that. Australia is an upholder and defender of the international rules-based order. We believe strongly in the principle of freedom of navigation and freedom of overflight, and we will continue to traverse the South China Sea as we have in the past”.

I’m no great fan of the current Australian government more generally, but there is a degree of realism about the nature of the regime, and its external threats, that seems deliberately absent from the utterances of our own leaders, of whatever party.

Prompted by the events of the last few days, I wonder whether journalists might consider asking a few questions of some of our political leaders:

  • what do the Prime Minister, the Minister of Foreign Affairs think of the PRC actions in recent days to remove the term limit on how long Xi Jinping can serve as President?  One might hope that any answers would be somewhat more serious –  more engaged with the level of international unease – than suggesting, say, that, after all, we have no term limits, and our head of state reigns for life.
  • since National Party president Peter Goodfellow and Labour Party president Nigel Haworth (and former Prime Minister Jenny Shipley) have quite recently been effusive in their praise of Xi Jinping and his approach (links in the Jichang Lulu piece), how do they view this latest step?  It is no good attempting to say “oh, we are just party functionaries we do the organising”: if you are willing to praise the foreign leader of an aggressive dictatorial state, that increasingly threatens not only the human rights of its own people but other nations, you owe us your take on this latest step.
  • and since Bill English refused ever to engage seriously on the issue of Jian Yang –  the former PLA intelligence official, who now concedes he misrepresented his past to enter New Zealand, and who maintains very close ties to the PRC authorities –  perhaps they could ask Simon Bridges, the new National Party leader.  Is he comfortable having such a person in his caucus, and (reportedly) as one of the party’s leading fundraisers.   Most likely, Bridges would fob journalists off as English did whenever anyone asked, or fall back on the slurs his shadow Attorney-General has relied on.  But even if he did, at least we would have a clearer steer on the character of the man, and the nature of the new generation of New Zealand’s political leadership.



A semi-official take on New Zealand and China

The New Zealand China Council was established by the government a few years ago.  It exists primarily as an advocacy body, using (mostly) taxpayer money

in support of deeper, stronger and more resilient links between New Zealand and China.

It has been very close to  the government.  The Secretary of Foreign Affairs and Trade, and the chief executive of New Zealand Trade and Enterprise are both ex officio members of the Executive Board.  The Council is chaired by one former Deputy Prime Minister (Don McKinnon), and another member –  with considerable ties to People’s Republic of China institutions – is former Prime Minister, Jenny Shipley.   The Advisory Board, another 20 people, includes as members several of those about whom questions have been raised in recent months (Jian Yang, Raymond Huo, and Naisi Chen)  –  as well as, somewhat surprisingly, a senior journalist.

The public face of the Council seems to involve relentless optimism about things that don’t obviously seem to require taxpayer-funded advocacy (eg the several tweets about the first New Zealand avocadoes into China) and rather gushy, one-eyed, takes on the PRC/New Zealand relationship, always extremely careful never to utter a critical or sceptical word about the PRC.  More recently, in response mostly to the issues raised by Anne-Marie Brady (and the Jian Yang story) they seem to have been pushed somewhat onto the defensive.

The Council employs a part-time Executive Director, Stephen Jacobi.  He spent considerable time at MFAT, but from his own account his focus was Europe and North America (including as our deputy high commissioner in Canada) and in trade negotiations.  Since leaving MFAT in 2005 he has run his own consulting firm, and been employed as the public face of various trade-related bodies, including serving as Executive Director of the NZ US Council from 2005 to 2014.  He is articulate and readily available to the media, but has no specialist expertise in China or (indeed) on the workings of New Zealand democracy.   That isn’t a criticism –  after all, neither do I –  just to note that his arguments, and evidence, need to be reflected on and carefully examined, perhaps having regard to the interests that are paying him, not as coming from an expert authority in the area.

I’ve written previously about one of Jacobi’s speeches, given late last year at a regime party to mark the PRC national day.  Those were pretty brief (and obsequious) remarks, albeit to a PRC audience.  And so it was interesting to see that last week he had delivered a much more substantial address, Dancing with the Dragon – Opportunity and Risk in the New Zealand China Relationship, to the Nelson branch of the New Zealand Institute for International Affairs.  There is also a much shorter op-ed by Jacobi in the Herald today, headlined on the China Council’s own website as “Anti-China narrative not the Kiwi way”.   I’m not going to comment specifically on that piece –  it covers mostly similar ground to the speech – except perhaps to suggest that deferring to vested interests (business and political) who want us to hurry along and simply accept that there is nothing to see here shouldn’t be “the Kiwi way” either.

What of the speech?

The first couple of pages (of eight) is reasonably unexceptionable.   There are lots of statistics about the growth in trade between New Zealand firms and Chinese ones –  curiously, only about exports, and barely a mention of (the benefits of) the imports.   There is some nonsense about New Zealand alleged heavy reliance on China in the ‘global financial crisis”, but on the other hand a welcome acknowledgement that the New Zealand – China trade agreement isn’t the only factor explaining the growth in two-way trade and investment.  Of course, there is no acknowledgement that the interest of the entities exporting to China –  many represented around his board table – might not always be the same as those of New Zealanders as a whole.

But then he turns towards addressing the (quite limited) New Zealand public debate on issues around the activities of the People’s Republic of China and the Communist Party which controls it.  Part of Jacobi’s rhetorical strategy  appears to be to imply that anyone raising concerns about the Chinese regime and the Party that controls it, is somehow anti-China/Chinese more generally.  It is never quite put that like  –  just insinuations –  but the impression is pretty clear. Mention the poll tax, for example, to play up the guilt, but never mention that we and China (pre-Communist) fought on the same side in World War Two.   And never, ever (that would be job-ending for Mr Jacobi no doubt), note that across the Taiwan Straits is a highly succesful, prosperous, free, and non-threatening ethnic Chinese democratic state.  Never, ever, mention the unease apparently felt among numerous New Zealand citizens of ethnic Chinese origins –  some of whom migrated here to escape the party-state and its evil –  about the effective control regime-associated groups have over most of the Chinese language media in New Zealand, and many community groups.

Around the world there has been growing unease –  including in such impeccably liberal circles as academics –  about the growing number of Confucius Institutes established as part of many Western universities.  With PRC funding comes PRC restrictions, on hiring and on the sort of issues lecturers are allowed to address.   There are several of these institutes in New Zealand universities – Canterbury, Victoria and Auckland  In various places overseas there has been a pushback and some major universities –  notably Chicago – have closed their Confucius Institutes.   I’m sure no one has a problem with the PRC government subsidising Chinese language learning in New Zealand –  any more than with Alliance Francaise or the Goethe Institute –  but not as part of New Zealand universities, subject to a foreign governments controls and constraints.

Why do I raise this?  Because Jacobi included this line

There has been pleasing progress in the number of primary schools teaching Mandarin, especially with the help of the 150 Chinese language assistants in New Zealand, but this has not followed through at secondary and tertiary level.

I presume this is a reference to things like the Confucius Classrooms programme (or here) .  By this means PRC-funded and chosen people are operating directly in our school classrooms.  One can only imagine the awkwardness if a student asks about Taiwan or Tibet, the rule of law, or freedom of speech.

Can anyone imagine us allowing Soviet funded teaching in our schools in the 1970s, or German-funded teaching in the 1930s?  But Mr Jacobi, and his government-funded council, simply avoid ever confronting the nature of the regime.  (I’m sure they are quite aware of it, but if the public ever got concerned it might threaten the Council’s easy life, and the business and personal opportunities of some of its members.)

And then Jacobi turns directly to the recent debate, such as it has been.

Public debate about the relationship is to be welcomed in a robust democracy like ours, although care needs to be taken to ensure that public debate remains civil and properly focused on the issues.

And who is going to disagree?  But then perhaps Mr Jacobi could point us to examples of where the debate has been less than civil and not “properly focused on the issues”?  I can think of the former Attorney-General at an election meeting attacking Anne-Marie Brady as somehow “anti-foreigner”, but then I’m pretty sure he and Mr Jacobi are on the same side.    I’ve heard various claims that people raising issues are being “racist” or anti all things Chinese, but I’m pretty sure that not once have those sorts of slurs –  the stuff Jacobi purports to dislike –  been backed up with arguments and evidence.  In this speech, Jacobi certainly makes no attempt to.  For a taxpayer-funded body it is a pretty poor show really.  But then, unfortunately, it is par for the course.    Neither politicians, nor outfits like China Council, have made any attempt to address seriously and directly the issues raised in Professor Brady’s Magic Weapons paper, or the issues around the background and ongoing associations of National MP Jian Yang.

Jacobi notes that occasionally the New Zealand government and the PRC disagree

While we do have occasional public disagreements, these have not detracted from the momentum in the relationship.

If so, presumably because when such “occasional public disagreements” matter, politicians and diplomats scurry round and assure Beijing it will never happen again.  It is hardly news that the New Zealand government has operated a policy of avoiding do anything that might upset Beijing.  Nor that the PRC is not some typical country which recognises that the possibility of robust differences of view characterises real mutual –  as distinct from subservient – relationships in this world.

Politically, even while we receive occasional Chinese naval ship visits, we continue to maintain close defence and intelligence relationships with our Western allies.

I’m pretty sure we never welcomed naval vessels from the Soviet Union or Nazi Germany.  But even setting that to one side, Mr Jacobi simply never addresses the  unease our traditional Western allies –  including through Five Eyes –  have reportedly come to feel about the New Zealand government’s relationship with the PRC.  And he does not even seek to address the PRC’s own strategic interests, which might include a fostering a more semi-detached relationship between New Zealand and the countries which share rather more of our “fundamental values” [Jacobi’s own term].

And then there is the attempt to play distraction, with the suggestion that all that is going on is “soft power”, and “everyone does that”.

New Zealand itself uses soft power with great effect when it seeks to portray a positive view of our country overseas, including by funding visits by journalists and other “influencers” to New Zealand.

Although Americans, Europeans and Japanese all use soft power, it is the Chinese use of soft power that is being questioned today.

If the PRC wants to subsidise artistic or cultural displays in New Zealand, to foster a positive view of the regime, probably not too many are going to object very loudly.

But that isn’t the sort of influence that Professor Brady was writing about, and Mr Jacobi is well aware of that.    We don’t have (for example) formerly-French members of the New Zealand Parliament, constantly liaising with the French Embassy, and in front of whom former diplomats are careful of what they say.  And even if we did, there is a much greater commonality of “fundamental values” between,  say, France and New Zealand than there is between the PRC and New Zealand.  The British government doesn’t attempt to control the English language media in New Zealand.    The US government (and government-controlled entities) doesn’t dangle post-politics opportunities in front of former senior politicians.  No other government I’m aware of attempts to exert tight control over the students’ associations of its overseas students, in the way that the PRC does with the Chinese Students and Scholars Associations (CSSA).

Jacobi goes on

Some prominent members of the Chinese community have faced intense criticism about their past and present connections with the Chinese Government and the Chinese Communist Party.

Chinese community networks have been described as being a conduit for Chinese representatives to promote a positive view of China and to subvert local decision-making.

The funding of New Zealand political parties has also been highlighted.

Some of this criticism appears to be linked to a similar debate in Australia, although I would argue that the situation in Australia is quite distinct – although we share many things, we have a different political culture, we are not a military ally of the United States and we see our role in the world differently.

In all that, there is just nothing specific at all.  Jacobi doesn’t, for example:

  • address why it is appropriate to have as member of Parliament in New Zealand a former Chinese intelligence official, former (at least on paper) member of the Communist Party, someone who now openly acknowledges misrepresenting his past on forms to gain entry to New Zealand (apparently because that is what the PRC regime told people to do),
  • address the PRC control of the local Chinese language media, and associated (and apparently heightened) restriction on content,
  • address how it can be appropriate for the Mayor of Auckland to receive anonymous donations (from China) of $150000 for his mayoral campaign.

He asserts that the situation in Australia is ‘quite distinct’, but makes no effort to back his claim.  If anything his three points reduce to little more than “we’ve decided to just ignore these things, and that’s the way we do things in New Zealand”.    There is an increasing volume of material on Chinese influence activities in a range of countries, and if the situation here is not that of, say, the Maldives, or Cambodia or even perhaps the Philippines, there is little to suggest that things are materially different here than in Australia, or Canada, or a variety of European countries.

Jacobi response is

Recent allegations here in New Zealand have sought to identify ‘smoking guns’ but mostly without the proof or evidence to demonstrate culpable wrong doing.

Everyone in New Zealand is innocent until proven guilty.

If there has indeed been misbehavior or unwarranted interference, a higher standard of evidence needs to be provided so that this can be investigated by the proper authorities.

Innocent until proven guilty is, rightly, the criminal standard.  If crimes have occurred, they will need to be proved to that standard to secure a conviction.  But as Mr Jacobi knows very well (a) someone in authority needs to take an interest for anything to be proved to that standard, and our leadership appears to have an active lack of interest in doing so, and (b) plenty can be inappropriate or threatening that need not be illegal.    I’m not aware, for example, that anyone has suggested that Jian Yang’s membership of the New Zealand Parliament is, or should be, illegal (unless concerns about his citizenship application come to something).    The argument is that it is highly inappropriate in the specific conjunction of circumstances (PLA and Party background, deliberate misrepresentation of his past, continued close association with regime representatives in New Zealand, failure ever to say anything critical about the PRC regime, and so on).   Perhaps Mr Jacobi has a compelling and specific alternative perspective?  If so, it would be very interesting to hear it, but that would require engagement, rather than lofty disregard (“someone else’s problem”).    Perhaps next time he talks to Jian Yang he might suggest that in an open and democratic society, making yourself available to the local media for a searching interview is the way things should be done.  As it is, Yang has not made himself available for a single English language interview since the story first broke in September.  And this is an elected MP, paid with public money.

Jacobi has a brief discussion of trade ties.

I was struck by a comment on Twitter this week which suggested that China could if it wanted to “paralyse New Zealand’s economy at will”.

I’m not sure why China would ever see it in its interest to attempt to do such a thing

As I’ve noted in various posts, China can’t paralyse our economy.  We make our own prosperity.  But they could make a great deal of difficulty for specific industries.

And they have form in this regard.  Specifics around experiences of Norway and Mongolia are here, and the PRC was active in using sanctions on specific sectors on firms in South Korea last year over the deployment of the THAAD missile defence system.  So for Mr Jacobi to say “I’m not sure why China would ever see it in its interests” to do such a thing in respect of New Zealand is either simply deliberately avoiding actual recent experiences with this particular regime, or saying “so long as we never upset Beijing” we have nothing to worry about.  (Of course, in Norway’s case, it wasn’t even the government that upset Beijing, but a (prominent) private entity, the Nobel Prize     committee).   Surely we deserve better than this from taxpayer-funded mouthpieces?

There is plenty more questionable material in the speech

Chinese economic policy is changing too – a move away from investment-led growth to consumer-led growth and the realisation that a significant and growing share of the economy is now in the hands of the private sector rather than state owned enterprises.

A new generation of Chinese leadership is in office – President Xi Jinping has consolidated his power at the recent Party Congress.

The leadership knows the old style of economic management cannot continue, but it looks at the ravages the global financial crisis caused the Western economies and is determined not to see the same thing happen in China.

Globally we see China’s economic weight continue to grow and the mantle of leadership pass from an increasingly inward-looking United States to a more confident China.

China has some way to go to “walk the talk” of openness and inclusion, particularly in terms of the way it regulates its economy, but the language from Beijing these days is more appealing to many than what we hear from Washington.

China too is grappling with the demands of a growing middle class becoming more impatient with the restrictions on human rights and personal freedoms.

All of which is clearly designed to suggest that things are improving in the PRC, when demonstrably they aren’t.

For example, the economy might largely (and formally) be in private hands, but Mr Jacobi –  and his MFAT funders –  know very well that the Party has been increasingly extending its tentacles directly into private sector entities, domestic and foreign, and that no business in China can be considered much apart from the regime.

And China “has some way to go to ‘walk the talk’ of openness and inclusion”?  Is there any evidence  –  even a shred –  of an intention to adopt a culture of”openness and inclusion”?  The environment for people less than enamoured of the regime just seems to be getting tougher as Xi Jinping’s power is further consolidated.   (Nonetheless, it doesn’t stop the presidents of the National and Labour parties gushing about Xi and the regime.)

And the “middle class becoming more impatient with restrictions on human rights and personal freedoms”.  Perhaps they are, perhaps they aren’t.  But really what matters is the regime, and its resolve.  At present, that doesn’t seem to involve more freedom.  The chilling new “social credit” control scheme is just another example.  But you hear nothing of any of this from Mr Jacobi, and his supporters, who just want to keep the deals flowing.

Some modest political/societal convergence might have been a plausible narrative 15 years ago.  It isn’t now.  And really I’m sure Jacobi knows it, as he’ll know the expansionism in the South China Sea, the military stand-off over the Senkaku Islands, the suborning of various regional governments, and so on.

Perhaps the most chilling sentence in the entire speech was this one.

A second consequence is that as China’s confidence grows they will become less willing to accept challenges to their political system and their own decision making processes. This will require careful handling on the part of New Zealand

Quite possibly, Jacobi is descriptively accurate, but it doesn’t lead him to suggest that we might be increasingly wary of the PRC regime, or uneasy about the power projection (including into New Zealand) that accompanies this greater confidence. It doesn’t lead him to point that true friends – and genuinely self-confident people  –  live happily, and embrace –  challenge, debate and scrutiny.  Nothing about self-respect.  Nothing about the shared interests of like-minded countries.  No, apparently for Jacobi we should simply double-down and “engage even more with China, not less”.

There was the, surely laughably deluded –  but perhaps just an attempt at distraction –  invocation of his former MFAT colleague’s argument.

Former New Zealand Ambassador to China Michael Powles has written recently about the need for New Zealand to “develop the already strong relationship with China to increase the prospects for New Zealand to have influence with China as it wields increasing regional and global power”.

Michael writes that New Zealand has a lot of experience in being a “small friend to a great power” ie with Britain and the United States – co-operating actively but also discussing differences frankly.

In what plausible world does any of this make sense?  Set aside the fact that to the extent that we were ever a “small friend” to great powers the US and UK, it was based on shared values, shared heritage, largely common interests etc.  Friends, even brothers, don’t always agree, but they share crucial commitments or interests.  There is simply no sign that the sort of values the PRC regime lives by  –  increasingly so at present –  are ones most New Zealanders any part of.  And nor is there any reason to suppose that China would be likely to heed New Zealand’s counsel around the exercise of its rising “regional and global power”.      New Zealand’s policy, after all, seems to be premised on not upsetting Beijing, and the PRC are better placed than we are to know what will upset them.

At the very end of his speech, Jacobi returns to one of his early themes

With this engagement invariably comes public debate – it is a debate worth having, but we are a better nation if we respect the people about whom we speak.

Frankly, I don’t respect Xi Jinping, or the PRC regime, or the Chinese Communist Party.  The Party has been a great force for evil in its own country –  depriving tens of millions of liberty, and even life, and presiding over a system that can’t even produce prosperity (unlike, say, Singapore or Taiwan, or South Korea or Japan).

I don’t have much respect for Jian Yang either.  He may be a perfectly pleasant person, may even have been a competent academic.  But that isn’t the issue.  He served –  voluntarily –  an evil regime, in its military intelligence system, he misrepresented that past to get into New Zealand and into Parliament.  And if he has ever had a Damascus Road experience –  now deploring the evil he once served –  the public has heard nothing of it.  Oh, and despite being an elected member of Parliament –  on the list, elected by all National voters –  he simply refuses to front the media.   You can avoid searching scrutiny in the PRC, but you shouldn’t seek to (and shouldn’t be able to) here.

I don’t have much respect for those who’ve, apparently successfully, managed to exert regime control over Chinese language media here.

And I have even less respect for the New Zealand politicians, and party leaders, from every single party (so it appears), who simply let this stuff go by, and try to pretend there isn’t an issue.

Oh, but those weren’t the people Jacobi was meaning?   I guess probably meant ethnic Chinese New Zealand citizens. But as a group, they simply aren’t the issue anyone (including Professor Brady) has been raising issues about in this debate.   If anything, part of the issue is about protecting the rights and freedoms of these people –  fellow New Zealanders –  from the PRC regime interventions, and attempt to exert influence and control.   But it suits those who want to avoid the real issues to pretend that the debate is about ethnic Chinese in New Zealand more generally, rather than about the activities –  some probably illegal, others just threatening or flat-out wrong – of a heinous regime.

I’ve been reading a lot about the interwar period recently.  As I’ve done so, the more apparent the similarities between the current situation vis-a-vis the PRC and that of the 1930s.  Parallels are never in the nature of exact mirror images.  And perhaps in the end the differences will prove greater than the similarities.     But the same expansionist tendencies, the same denials of personal liberties, the same making trouble among diasporas, the same border disputes, perhaps even (in the long term) the same economic weaknesses, and (on the other side) much the same –  India aside this time perhaps –  desperate desire to appease and pretend there is nothing much to worry about.  As I say, perhaps the parallels are overblown, but I suspect we’d get much more value from some serious engagement on those sorts of topics, rather than more taxpayer-funded efforts to pat the public on the head, suggest there is nothing to worry about, and bat away any critics –  expert ones like Professor Brady –  as somehow insufficiently civil or respectful.

On which note, where are the rest of the genuine China experts in New Zealand?  Presumably many of them will have perspectives on these issues?  I wonder if the media have approached these people –  mostly academics paid with public money, partly to advance knowledge, public debate etc.  If they won’t talk, one has to wonder why not, and what that would say about our self-respect as a society, and our willingness to nurture and cherish what made countries like New Zealand what they were at their best.

At very least we deserve rather better, and more substantial, engagement with the issues and concerns from our elected leaders, and from their paid voices (such as Mr Jacobi).

“We could be the next Albania” – Brady

To their credit, the Herald yesterday ran a substantial op-ed from Professor Anne-Marie Brady on the influence-seeking and interference by the People’s Republic of China (PRC), and the Communist Party that controls the state, in New Zealand.

Professor Brady has been in the headlines in recent days over a burglary at her Christchurch home in which several laptops, phones etc (but nothing else of value) were stolen, the burglary occurring after she had received a letter warning that she was being targeted by the PRC regime.   The media has –  rightly –  sprung to her defence, suggesting a need to get to the bottom of just what is going on.   Another article in yesterday’s Herald suggested that the Police weren’t doing much about the break-in until the Prime Minister herself expressed concern.  In general, it is a bad look (and bad practice) for ministers to be putting pressure on Police to investigate, or not investigate, particular cases.  But perhaps on this occasion the end might almost justify the means.

Professor Brady’s article ran under the heading ‘We could be the next Albania’,  a reference to the reported observation last year by a senior Chinese diplomat that (in Brady’s words) “favourably compared New Zealand-China relations to the closeness China had with Albania in the early 1960s”.    Having fallen out with the Soviet Union, Albania sought refuge in ties with the PRC (a relationship described by one Western scholar as “one of the oddest phenomena of modern times: here were two states of vastly differing size, thousands of miles apart, with almost no cultural ties or knowledge of each other’s society, drawn together by a common hostility to the Soviet Union.”) before later also falling out with them.

Brady reports, and presumably is in a position to know, that this “startling and telling analogy…disconcerted New Zealand diplomats”.   She perhaps over-eggs the Albania point, arguing that

In the late 1970s the relationship ruptured over China’s failure to deliver economic development assistance. By the end of the Cold War era, Albania had become one of the poorest, most politically divided, and most corrupt of the former Eastern Bloc states.

Perhaps, but if we look at Angus Maddison’s collection of historical estimates of GDP per capita, Albania had long (well before the Communist era) been one of the poorest of those countries and had not exactly been a byword for political stability either.  Their failings were their own.

But I guess the real point –  and probably the one the Chinese diplomat was getting at –  was that New Zealand was seen from Beijing (with perhaps just a bit of exaggeration for effect) as small, remote (clearly both true), somewhat detached from its former allies, and diplomatically and economically subservient.   True or not, the suggestion will have put MFAT noses out of joint.

Brady goes on

Xi Jinping has been emboldened to pursue an increasingly assertive foreign policy and insisting that its strategic partners such as New Zealand fall into line with its interests and policies.  Accompanying this more assertive foreign policy has been a massive increase in the CCP’s foreign influence activities. China did not have to pressure New Zealand to accept China’s soft power activities and political influence: Successive New Zealand governments actively courted it. Ever since PRC diplomatic relations were established in 1972, New Zealand governments have sought to attract Beijing’s attention and favour. New Zealand governments have also encouraged China to be active in our region.

And not a word of scepticism is ever uttered openly, whether by politicians or by the (mainly government-funded) entities like the China Council and the Asia New Zealand Foundation.   No doubt, in most cases they genuinely believe their stance (quiescence) to be in the interests of “New Zealand” –  however those interests are defined.  In all too many cases, it also appears to have been in the personal economic interests of those involved.

The real point of Brady’s article appears to be to encourage the new government to think seriously about doing things differently.   As she highlights, the Australian government is taking these issues much more seriously   (for those still sceptical of the significance of these issues, in addition to Anne-Marie Brady’s main Magic Weapons paper, various of the submissions on the new Australian legislation make sobering reading –  for example, no 20 (by an academic whose new book on the subject –  already the subject of PRC threats –  is due out next week), or no 33 (from a national security academic at ANU) or no 32 (from an ethnic Chinese group, the Foundation for a Democratic China).

Brady appears to think there is a realistic possibility of change

In order to deal with the issue it can’t just attack the policies of the previous government, it also has to clean its own house. Significantly, unlike the previous National government, Ardern’s government has not endorsed Xi Jinping’s flagship policy the Belt Road Initiative, bringing New Zealand back in line with its allies and nearest neighbours.

It will take strenuous efforts to adjust course on the direction the previous National government set New Zealand. New Zealand has to address the issue, but the Ardern government must find a way to do so that does not invite pressure it cannot bear from the CCP, which is watching closely.

But is there any sign that this government is any different?  I’d like to believe that not having yet endorsed the Belt and Road Initiative (a sprawling massive geopolitical play, designed to extend PRC reach and in some cases load up poor countries with additional debts in ways that further extend PRC political influence) is significant.    But the New Zealand China Council –  largely taxpayer-funded, and with the Secretary of Foreign Affairs sitting on its Council –  was promising late last year that early this year they would have a report out on how New Zealand can engage with the initiative.  And senior Labour backbencher –  chair of a major select committee –  Raymond Huo seemed right behind the initiative

Meanwhile, China-born legislator Raymond Huo believed the Belt and Road Initiative can help solve the problem of infrastructure development facing many developed nations.

“There is a dilemma. New Zealand, Australia and other developed countries including the US and Canada are all facing the same problem,” Huo told Xinhua.

“We haven’t done much upgrading, so we need money, we need capital, and we need the construction capacity. China has both,” he said.

Huo said he first realized the potential of Belt and Road Initiative when he attended two high-level conferences in China, and he believed New Zealand should seize the opportunities it offers.

Along with other experts on China and leading business people, he has established a think tank and foundation on the Initiative.

What other straws in the wind are there?

As recently as this week, interviewed on Radio NZ about the Brady break-in and other matters the Prime Minister refused to express concern at all about PRC influence-seeking and interference in New Zealand. At one level, it is fine to talk about being concerned about any foreign influence from any source (as we all should be), but there is a real and specific issue around the PRC, which needs serious political leadership to address.  But instead there is a void.

It isn’t just the Prime Minister of course. In a post late last year, I highlighted that her minister responsible for the intelligence agencies, Andrew Little, was specifically dismissive of concerns around the PRC activities.

Andrew Little, the Minister Responsible for the SIS, said he was not aware of any undue Chinese influence.
“I don’t see evidence of undue influence in New Zealand, whether it’s New Zealand politics, or New Zealand communities generally.

“We have a growing Chinese community. We have a strongly developing trade relationship and diplomatic relationship with China. I don’t think those things, on their own, connote undue influence.

“If there’s other things she says constitutes undue influence, we’d have to know what that is.”

It was documented in Brady’s substantive paper minister, a paper which has had substantial coverage around the world.

Then, of course, there was the Deputy Prime Minister and Minister of Foreign Affairs.  Out of office he had occasionally been heard to express concerns, including around National MP Jian Yang.   In office, at a New Zealand event marking 45 years of diplomatic relations with the PRC, he wouldn’t even address the issue, stressing how cordially he would raise (privately) any concerns he ever had, and went on to suggest that, after all, one had to break a few eggs to make a omelette, and really no should get too bothered about human rights issues in China either.

“Sometimes the West and commentators in the West should have a little more regard to that and the economic outcome for those people, rather than constantly harping on about the romance of ‘freedom’, or as famous singer Janis Joplin once sang in her song: ‘freedom is just another word for nothing else to lose’.

“In some ways the Chinese have a lot to teach us about uplifting everyone’s economic futures in their plans.”

And since the election, Labour president Nigel Haworth –  presumably with his leader’s knowledge and approval – hobnobbing with the Chinese Communist Part itself, has been effusive in his praise of Xi Jinping and the Chinese regime.

One could add to the mix the stony silence of the Labour Party leadership –  pre and post-election – on the succession of revelations around National MP, and former PRC intelligence officer, Jian Yang.  From anything they say (or don’t say) in public, the Labour Party, and their allies in the Greens and New Zealand First, seem quite unbothered about the presence in Parliament of someone who acknowledges misrepresenting his past in his residency/citizenship applications,  who is widely regarded (by experts in the field) as likely to still be a member of the Communist Party, who closely associates with the PRC embassy, and who has never once been heard to criticise the Party-state that is the PRC.  Recall, former diplomat Charles Finny’s line, that be was always very careful what he said around Yang (and Raymond Huo) since both were known to be close to the PRC embassy.    But is there any sign that any of this bothers our new government?

Professor Brady calls for the government to emulate its 1980s predecessor

the Fourth Labour government made a principled stand on a matter that affected our sovereignty and our values with the nuclear issue; then it passed legislation to back up these principles. Now is the time for the sixth Labour government to take another principled stand to defend our sovereignty and values and make legislative changes such as to the Electoral Finance Act.

In truth, and whether you supported the anti-nuclear stance of not (I didn’t and don’t, and certainly don’t see it as a matter affecting our sovereignty) this one is a great deal harder.  For a start there wasn’t really money at stake around the nuclear-free issue.

I presume one of the issues that will be exercising ministers, and their MFAT officials, will be the negotiations around the proposed upgrade to the preferential trade agreement with China.  It would be easy enough for the PRC to put those negotiations on a slow track, or simply halt them altogether.  Such agreements might not matter very much taken as a whole, but they might matter quite a lot to a small group of people (with good political connections).  In the Australian context, there already appear to be some signs that the PRC is reacting to tougher Australian stance (and new legislation) by damping down the flow of foreign students.  We’ve already seen here the apparent ability of the export education industry to see off for now Labour’s promised changes to student work visa arrangements.  Those would have mostly affected the lower-level PTEs.  But our more prestigious – and government owned/controlled – universities get a lot of PRC students, and several attract direct PRC funding for their Confucius Institutes.  Chancellors and vice-Chancellors will be very nervous that if the government actually looked like taking a stand, their flow of revenue might be disrupted.  And they will constantly be bending the ears of ministers and officials, if ever the government showed any sign of self-assertion, and a respect for New Zealand values (and the interests of New Zealand citizens of Chinese origins).  And then there will be Auckland airport and the tourism operators too.

I’ve noted previously that during the Cold War it was much easier to maintain a moral clarity.  Most Western countries –  including New Zealand –  didn’t do much trade with the Soviet Union, and so there wasn’t a major self-interested constituency in New Zealand (or the US, or the UK) for simply bending over and letting a hostile regime, practising a completely different set of political values, have its way.  I noticed yesterday a recent interview with former (Obama-era) US Defense Secretary Ash Carter making much the same point.

Last time we competed with or had a long difficult strategic relationship with a large communist country was during the Cold War, and our approach to that was simply not to trade with them. Now, one of our largest trading partners is in fact a communist country, and I don’t think that the economists have given us much of a playbook to protect our companies and our people.

I’m not sure that economists can necessarily help much, except perhaps to repeat the point I’ve made here before: the PRC does have the ability to severely adversely affect the fortunes of individual firms/sectors (ask the Norwegian salmon industry, or some of the South Korea firms last year), but the PRC did not make Australia and New Zealand rich and it cannot, whatever unsubtle economic sanctions it attempted, make us poor.  Our prosperity, as a whole country, is very largely in our own hands.   And the very fact that we can worry about the possibility of such sanctions is perhaps the best case for making a stand now, rather than continuing to roll over, keep quiet, and hope that Beijing is happy.

But perhaps the other piece of economists’ advice might be, in this as in other fields, “beware of rentseekers”, people/institutions who will seek to use governments to advance their own economic interests, at the expense of the values, the freedoms, the self-respect, of the nation as a whole.  Governments have a poor track record of doing so, and there is little sign at this point that the current government will be any different.  As I wrote earlier

One of things we need to remember is that the interests of businesses (and universities) who deal in countries ruled by evil regimes, are not necessarily remotely well-aligned to the interests and values of New Zealanders.   Selling to China, on government-controlled terms, isn’t much different than, say, selling to the Mafia.  There might be money to be made.  But in both causes, the sellers are enablers, and then make themselves dependents, quite severely morally compromised.

Professor Brady’s Herald column seemed to build on an earlier (and somewhat longer) paper she produced shortly after the new government took office on things the government could do if it were serious about addressing the PRC political influence activities.   I wrote about it here (and here is the updated link to the paper itself).  In that earlier piece she had quite a list of things that could, or should, be done.

What should be done?  At an overarching level she says

The Labour-New Zealand First-Greens government must now develop an internally-focused resilience strategy that will protect the integrity of our democratic processes and institutions. New Zealand should work with other like-minded democracies such as Australia and Canada to address the challenge posed by foreign influence activities—what some are now calling hybrid warfare. The new government should follow Australia’s example in speaking up publicly on the issue of China’s influence activities in New Zealand and make it clear that interference in New Zealand’s domestic politics will no longer be tolerated.

Getting specific she calls on the government to

The Labour-New Zealand First-Greens government must instruct their MPs to refuse any further involvement in China’s united front activities.

That would be Raymond Huo I presume.

The new government needs to establish a genuine and positive relationship with the New Zealand Chinese community, independent of the united front organizations authorized by the CCP that are aimed at controlling the Chinese population in New Zealand and controlling Chinese language discourse in New Zealand.

And there is a list of six other specifics

  • The new Minister of SIS must instruct the SIS to engage in an in-depth investigation of China’s subversion and espionage activities in New Zealand. NZ SIS can draw on the experience of the Australian agency ASIO, which conducted a similar investigation two years ago. 
  • The Prime Minister should instruct the Department of Prime Minister and Cabinet to follow Australia’s example and engage in an in-depth inquiry into China’s political influence activities in New Zealand. 
  • The Minister of Commerce and Consumer Affairs should instruct the Commerce Commission to investigate the CCP’s interference in our Chinese language media sector— which breaches our monopoly laws and our democratic requirement for a free and independent media. 
  • The Attorney General must draft new laws on political donations and foreign influence activities. 
  • The New Zealand Parliament must pass the long overdue Anti-Money Laundering and Countering Financing of Terrorism legislation.
  • The new government can take a leaf out of the previous National government’s book and appoint its own people in strategically important government-organized non-governmental organizations (GONGOs) which help shape and articulate our China policy, such as the NZ China Council and the Asia New Zealand Foundation.

Most of those suggestions look sensible (although I’m no fan on AML/CFT legislation, with all its inane consequences –  goodbye ipredict, hello ID cards for 94 year olds changing banks).  There has been no sign of activity on any of these fronts.  Quite probably – based on what we saw in their BIMs, and Professor Brady’s mention of a Five Eyes discussion (itself repeated in the New York Times article last year on these issues –  our intelligence agencies themselves are worried).  But intelligence agencies can only apply the (current) law.  It is the political leaders who can bring forward legislation (on matters amenable to legislation, which not all of these are) and can display the leadership and moral standing that say “enough”  –  whether about Jian Yang, political donations, control of the Chinese-language media, university funding, PRC activities in the South China Sea, or whatever.   They could display such leadership, but there is no sign –  from any political party –  of anyone doing so.

I noted the other day that perhaps some journalist could ask the five contenders for the National Party leadership about their attitude to these issues, including (but not limited to) matters around Jian Yang and political donations.  A reader reminded me yesterday of Chris Finlayson’s arrogant and dismissive attitude before the election, when he was both Attorney-General and minister responsible for the intelligence services.  Finlayson still sits on the National Party front bench, and is still shadow Attorney-General.  Perhaps, five months on, someone could ask him if still thinks there is just nothing there, that Professor Brady is jumping at shadows etc.  Or is it that he just doesn’t want to know?

(I linked the other day to a couple of reports on PRC influence activities in other advanced economies.  For anyone interested –  including those doubting the seriousness of the PRC agenda –  I suggest searching out the (easy to find) serious articles about PRC involvement in places like the Philippines, the Maldives, Sri Lanka, Cambodia, and Pakistan.  The issues aren’t primarily about the internal nature of the PRC –  domestic human rights etc –  but about external expansionism, power projection, and the attempt to have other countries including (in Professor Brady’s words) “New Zealand fall into line with its interests and policies”, policies that are generally hostile to open and free societies.)

UPDATE:  Interesting ABC article based on an advance copy of Clive Hamilton’s book on PRC influence activities in Australia (book to be published next week).


Retired politicians in demand

A few days ago, shortly after Bill English announced that he would shortly be leaving Parliament, Stuff had an article on his post-politics prospects.

English, credited with steering New Zealand through the global financial crisis, is likely to be in strong demand on company boards. He has both the experience and contacts needed.

The demand may be especially strong in Australia, where the business media often fawned at the performance of the former National-led government, in comparison to its own governments.

There is quite a bit of hype there  – recall that, despite the fact of the “fawning”, Australia’s productivity growth substantially outstripped that of New Zealand over recent years.  But while business is very different from politics, and the Australian business/political environment is quite different than that in New Zealand, quite possibly English’s services will be in considerable demand.

The article goes on to suggest that a bank board might be a possibility

One of the early rumours circulating on Tuesday was that English was set for a seat on the board of a major Australian bank, with an investment banker speculating that he could soon be a director of Westpac on both sides of the Tasman.

John Key, after all, turned up not long ago as chair of ANZ’s New Zealand subsidiary.

Whether or not there is anything to the possibility of English turning up on a bank board I (obviously) have no idea (although the Westpac main board looks chock-full of bankers, lawyers, and accountants) but what concerns me is the lack of concern about the idea (or about the fact of John Key being recruited directly to chair ANZ’s New Zealand board).

Until just over a year ago, Bill English had been Minister of Finance for eight years.  In that role he had responsibility for the framework of legislation (primary and secondary) governing the prudential regulation of banks,  non-banks, and insurers.  He was minister responsible for the Reserve Bank of New Zealand, the prudential supervisory agency (including for banks).  He appointed the people who appointed the new Governor (and – single decisionmaking – supervisor). His department –  The Treasury –  was a key participant in the trans-Tasman banking council.  Even in his year as Prime Minister, there was no sign that he had lost interest in matters economic and financial.

It would be a dreadful look if a retiring former Minister of Finance went (more or less) straight from politics onto the board of a Bank.   It would be almost as bad as if a retiring Governor of the Reserve Bank made a similar move.   The issue –  especially for the Minister of Finance case –  isn’t about inside information; ministers aren’t usually privy to much individual institution data, and the broad intended sweep of policy (a) usually isn’t that secret, and (b) is somewhat specific to particular governments.    It is about incentives, appearances, and our ability to be reasonably confident that our governors are governing in the public interest and not in their own interests.

Probably few people go into politics initially for the post-politics opportunities.  Nonetheless, people need to feed their families, and fill their days, and even if you eventually get to the very top, even being Prime Minister doesn’t last forever.   Bill English is only 56, and the current Prime Minister –  even if consistently successful –  is likely to be out of Parliament by the time she is 50.   And –  even in New Zealand –  private sector directorships can pay pretty well (it was suggested that John Key might be getting $200,000 per annum for chairing the ANZ –  a big bank to be sure, but an unlisted 100 per cent subsidiary of an Australian parent, pretty substantially controlled by that parent).

Whatever the sector, a Cabinet minister who legislates/regulates in ways which are welcomed by the regulated industry are much more likely to find the post-politics doors open than one who regulates in a way the industry finds costly or inconvenient.  It isn’t just an issue in banking – it could be telecoms, or electricity, or transport, export education or whatever.   I’m no great fan of most business regulation, but it exists –  and the community as a whole has made a decision that such regulation is necessary or desirable.  If so, it is easy to envisage cases of a conflict between the public interest and the private interests of the regulated entities.

I’m not suggesting that Bill English (or John Key) made any decisions during their terms in office for reasons other than some mix of their view of the best thing for the country, and their view of how best to get re-elected.     But the incentives, and risks around them. are things that need managing.  It would set a dreadful example if Bill English shortly turns up on the board of a bank (in John Key’s case, the concern might be more about his membership of the Air New Zealand board –  a majority state-owned company, with ownership sold down by Key’s government, and where Key himself had until quite recently been Minister of Tourism).

(It is interesting to note that the main boards of the four big Australian banks do not appear to have a single former politician on them, although one is now chaired by a former Secretary to the Treasury.)

I’m not sure if there are any rules on what ministers can do once out of office –  there is no sign of anything in the (non-binding) Cabinet Manual.  Quite probably it wouldn’t be easy to draw up a good, workable and reasonable set of rules.   But I’m also struck by the fact that it appears to be a relatively new problem, at least as regards former Prime Ministers.

Going back 100 years:

  • Massey died in office
  • Bell (PM for a mere 16 days) ceased holding active political office at 77,
  • Coates died while still an MP,
  • Ward died while still an MP,
  • Forbes left Parliament at 74,
  • Savage died in office,
  • Fraser died while Leader of the Opposition,
  • Holland left Parliament at age 64, already ill and never really recovered,
  • Holyoake went from Parliament to being Governor-General and finally left office at 76,
  • Nash died while still an MP,
  • Marshall left Parliament to practice law and held various prominent private sector directorships,
  • Kirk died in office,
  • Rowling held only government-appointed roles and governance roles in community bodies after retirement,
  • Muldoon died while still an MP,
  • Lange left Parliament at 54, and appeared to have only community involvements subsequently,
  • Palmer returned to the practice of law, at the interfaces with public policy,
  • Moore mostly held government-sponsored positions after leaving Parliament, although did for a time –  15 years after being Minister of Trade –  work for Fonterra,
  • Bolger held some lower-level commercial directorships, but not until several years after leaving Parliament (and the Prime Ministership),
  • Shipley has held numerous directorships,
  • Clark moved on from Parliament to head the UNDP (government-sponsored),
  • John Key left Parliament at 55, and appears to be picking up various directorships and the like, and
  • Bill English is leaving Parliament at 56.

I’m old-fashioned enough to think that being Prime Minister (or Governor of the Reserve Bank) should be a stepping stone to retirement, or at least a retreat to advocating the ideas one governed on, or doing good through community and voluntary organisations or government roles.  That isn’t an anti-business stance at all, just that the extent of the regulatory state has become so pervasive, and so much money is at stake, that it should trouble us, and cause questions to be asked, when senior politicians step so readily from politics into the board room (or consultancy rooms) of private businesses.  I’ve always  found oddly attractive the stories of Harry Truman –  who left office with almost nothing but his old army pension, but still wouldn’t do product endorsements –  or Clement Attlee who (reportedly) took the bus to the House of Lords in his retirement.   Or even George W Bush, who seems to have retired to paint, or John Howard.  I don’t wish poverty on our past leaders –   a decent parliamentary pension seems appropriate  – nor to make politics the preserve of the wealthy, but equally that public service shouldn’t be stepping stone to wealth, via regulated industries, either.  If the stepping stone is there, the risks to good government are real.

It would concern me if Bill English quickly shows up on a bank board, or even the board of a commercial entity much affected by specific government regulation/legislation.  But perhaps even more concerning should be if he follows in the path set by so many of our recent senior politicians (sadly, particularly National Party ones) and ends up being remunerated to serve the interests of –  or trade off the back of good relations with – the government of the People’s Republic of China and of the Chinese Communist Party (which, of course, controls the government).

There are the directorships of Chinese banks (former ministers Chris Tremain and Ruth Richardson, former Prime Minister, Jenny Shipley, and former National Party leader –  and Reserve Bank Governor –  Don Brash).   There are consultancy contracts (John Key, and Comcast’s interests in China).   Or Board memberships of Chinese government affiliated entities (Jenny Shipley).

Quite possibly all these people believe that are doing good.  But their positions put them in a situation where they have to think very hard if ever once they considered taking a stand against an aggressive expansionist repressive dictatorial state (from which, directly or indirectly, they are remunerated).  New Zealand isn’t unique in having former political leaders taking this path, but that we aren’t alone shouldn’t make it any more acceptable.  There were apologists for evil in the late 1930s too.

Might one hope for better from Bill English?  One might have  –  I would have – hoped so.  But when you’ve served as Deputy Prime Minister and Prime Minister for nine years and never once spoken out against the evils of the regime (domestic or foreign policy –  see continued illegal expansionism in the South China Sea), when as party leader you’ve kept on your list (and then promoted) an MP who has been, and probably still is, a member of the Chinese Communist Party, a former member of the Chinese intelligence services, someone who is repeatedly photographed with Chinese Embassy figures, and who  has never once been heard to criticise any aspect of the evil regime he once served, I’m not sure there is any reason for optimism.  This was the same party leader who, only a few months ago, refused to answer any serious questions about his MP Jian Yang, despite clear evidence that he had withheld information about his past in the intelligence services from New Zealand authorites when applying for citizenship or residence.    And who has never once engaged with the observations of a leading former diplomat who publicly stated last year that he was always very careful what he said around Jian Yang because the latter was known to be close to the Chinese Embassy.     In what sense did Bill English represent the attitudes and values of New Zealand and its people?

Last year, I repeatedly encouraged people to read, and engage with, Anne-Marie Brady’s paper on PRC party/government influence activities in New Zealand.    There is an increasing stream of reports and papers on these activities in other countries –  a recent testimony (full version number 20 here) to the Australian parliamentary committee on proposed new foreign political interference laws, or a substantial report from a German think-tank.    But where are our political leaders?      It is sad state we’ve come to when a former PRC intelligence official –  an open associate of an embassy of a hostile foreign powers, who withheld material information from the authorities –  gets to vote for the new Leader of the Opposition (will any media ask the candidates their attitudes to Chinese interference in New Zealand and other democratic countries?).

(And, to be fair and balanced, not that there is any sign that the parties that make-up the new government are any more willing to make a stand for the values that underpin our society. It isn’t many months since the President of the Labour Party was openly gushing about Xi Jinping and PRC regime.)