On refusing to hear from Prof. Brady

[Note that this afternoon Huo backed down and is now inviting Brady to appear.  While welcome, it is pretty chaotic –  the PM’s office supported the ban this morning –  and hard questions should be posed to all the Labour MPs involved, including the PM. If/when she appears it will be extensively covered by domestic and foreign media, with almost every story prefaced by “in the appearance the committee chair tried to prevent happening at all…]

Perhaps it went down well in Beijing, but it is hard to imagine it did so anywhere else. Even China Council Advisory Board member and China Business Summit co-chair Fran O’Sullivan tweeted that it was a mistake.

fran

My own tweet of the Herald’s article on the story, noting that it seemed almost literally unbelievable (but nonetheless true), was retweeted by quite a range of PRC-focused journalists and the like, and many others have drawn attention themselves to this extraordinary mis-step (the most charitable possible interpretation) by our PRC-deferential government.

Yesterday, the four Labour members of Parliament’s Justice select committee voted to block Professor Anne-Marie Brady from appearing in front of the committee as part of its investigation into foreign interference in our election.   That committee is chaired by Raymond Huo, who has close associations with various PRC United Front bodies, and was personally responsible for adopting a slogan of Xi Jinping’s as Labour’s campaign slogan among ethnic Chinese communities in New Zealand.

After each general election, Parliament’s Justice committee undertakes a review.  They invite public submissions, an opportunity for people to raise issues of concern (eg bizarre laws that mean that despite huge volumes of advance voting, you can say anything partisan you like on all those days, but are subject to very tight restrictions on so-called “election day”).  Each time, the committee makes a choice about a particular area to focus on.

This time round public submissions closed last September.  In October –  note that October comes after September –  the Minister of Justice (who is also responsible for the intelligence services) wrote to the committee encouraging it to focus on foreign interference issues.   The committee adopted the Minister’s suggestion.  This was, to repeat, after the opportunity for public submissions had already closed.

According to the media reports, Professor Anne-Marie Brady of Canterbury University, recently wrote to the committee and asked to be heard as part of its inquiry.    The committee voted yesterday, splitting on party lines, to refuse.    This was, we are told, on “narrow procedural grounds”, or in the words of Mr Huo the chairman

huo

If we don’t tell you (in fact don’t know ourselves) we are looking into the subject until after the normal date for submissions has closed, somehow it is your fault if you didn’t read Andrew Little’s mind and make a submission anyway.   After all, it is such a trivially unimportant issue and your view so lacking in usefulness, that why would we even think about making an exception and taking up your kind offer to come and testify, sharing your professional expertise in the area.

Huo and his Labour colleagues on the committee (Ginny Anderson, Duncan Webb and Greg O’Connor, each of whom one might have expected more from –  one a lawyer, two former Police employees) are acting disgracefully.  They dishonour Parliament and our democracy.

I’ve been a bit sceptical about this inquiry all along.  When National MP Nick Smith suggested a few months ago a foreign donations ban, and noted that the intelligence services would be invited to talk to the Justice Committee inquiry, I wrote this

So a committee chaired by Raymond Huo, he of various United Front bodies, he who chose a slogan of Xi Jinping’s for Labour Chinese-language compaign in 2017, with a senior National MP promoting only the narrowest reform (while [still] providing cover for Jian Yang) will invite the intelligence agencies to provide advice on foreign influence issues, but in secret.   Perhaps –  but only perhaps, because the fact of this hearing might be used to simply play distraction – it is marginally better than nothing, but we don’t need intelligence agencies to tell us there is an issue around the PRC. Both main parties know what they are doing –  who they associate with, who they take money from, who they honour, who they seek closer relations with, and who they refuse ever to criticise, no matter how egregious the regime’s abuses.  All the minor parties keep quiet and go along too.

I’m still more than a little suspicious of National in this area, but credit to them for pushing the Brady (non)appearance to a vote, and championing the importance of outside perspectives –  even awkward ones for them –  being heard.  Next thing you know they’ll be disowning Jian Yang.  But no, silly me….

It seems from the various news articles that Labour MPs only want the intelligence services to testify to the inquiry.

The Committee had asked the Security Intelligence Service, the Government Communications and Security Bureau and the National Assessments Bureau to appear.

“As committee chair, I am satisfied that the correct procedure has been followed and that the agencies will keep the committee well informed about any issues of foreign interference that may arise,” Huo said in a statement.

Of course the intelligence services –  while no doubt exercising some integrity in their comments –  work for (Labour) cabinet ministers.  And many of the sorts of issues Anne-Marie Brady has raised, in particular in her Magic Weapons paper , aren’t primarily matters for the intelligence services at all, but more about political culture and integrity.  For what it is worth, whenever in my career I dealt with the National Assessments Bureau, it further undercut my confidence.

It has always been a slight mystery why the government, in the form of Andrew Little, initiated this foreign interference focus to the post-election inquiry.  After all, very soon after becoming minister for the intelligence services Little was on record as regards the PRC saying words to the effect of “move right along, nothing to see here”.   Like his leader, he’s never expressed any concern about a former PRC military intelligence official sitting in Parliament, actually in the government caucus for six years.

Perhaps all they really wanted was some cyber-focused thing, perhaps building off all the stuff around Russian social media activity in the lead-up to the US election.   Perhaps there is even something useful they can do in that area, but it is like digging in pursuit of hidden treasure while ignoring the issues and risks that are in plain sight.   It was, after all, former diplomat and now lobbyist, Charles Finny who observed on national TV that, in view of their close ties to the PRC Embassy he was always rather guarded in what he said in front of either Raymond Huo or Jian Yang.   Large political donations flow to parties from New Zealand citizens with close PRC regime ties.  The mayor of Auckland was elected with heavy financial support from a large offshore (PRC) donor.  One (now) prominent regime-associated political donor managed to gets a Queen’s Birthday last year, supported by both main parties.   Senior figures in Chatham House fora express open concern about the reliance of the main parties on PRC-sympathetic funding.  PRC interests now dominate the Chinese language media in New Zealand.  Perhaps the public servants have some perspectives on these and other issues, but public service perspectives are not (and never should be) the only ones being heard by MPs.

I initially wondered if this block on Brady was simply Raymond Huo going off reservation. He doesn’t seem to be regarded as the best of the bunch in the Labour caucus.  Nick Smith even suggested the Prime Minister might intervene

Smith said Prime Minister Jacinda Ardern needed to intervene and ask the Labour members of the committee to reconsider their decision.

But, as Newsroom reports, the Labour MPs on the committee appear to have the full backing of the Prime Minister

A spokesman for Ardern echoed Huo’s comments, saying: “Our position would be that this is a procedural matter for the committee and that the various agencies presenting are well placed to provide information on foreign interference and the threat of it.”

Simply extraordinary.  Either captured by the public service and/or by those trying to tap the PRC-related markets (deals or donations).  Someone still not interested in serious and open examination of the issues.  Another Prime Minister more interested in deferring to Beijing, never ever saying anything upsetting if it can possibly be avoided, than in shedding light on the issues in New Zealand, and advancing the decency and integrity of our political system.  The same Prime Minister who has never made a robust defence of Anne-Marie Brady, facing physical attempts to intimidate her for doing her job.  Pretty shameful really, if perhaps now par for the prime ministerial course.

Labour will take, and have already taken, quite a bit of flak over this blatant refusal to hear from Professor Brady.  Invited to testify to the Australian Parliament, our own main governing party (party of the Prime Minister, party of the minister for the intelligence services) is apparently too scared to openly face her in our own Parliament.  What an extraordinary situation.  One wonders what the Minister of Foreign Affairs –  in fine voice often in opposition, silent as a lamb in government –  makes of this choice by his senior coalition partner?

If the Prime Minister or Andrew Little really are behind this ban, they must be very worried about Professor Brady might say, and the coverage it might get.  Why otherwise would you block her?  If her arguments and evidence were so easy to dismiss and rebut, where better than at a parliamentary inquiry (with all the resources of the public service to support the government).  They’re clearly scared.

Professor Brady’s paper isn’t primarily, or even largely, about Raymond Huo. In many respects, he is a bit player.  But here for ease of reference is what Brady wrote about the chair of Parliament’s Justice Committee, appointed by our Prime Minister.

National’s ethnic Chinese MP Yang Jian, Labour’s Raymond Huo, and ACT’s Kenneth Wang have had varying degrees of relations with united front organizations in New Zealand and the PRC embassy.

and

Even more so than Yang Jian, who until the recent controversy, was not often quoted in the New Zealand non-Chinese language media, the Labour Party’s ethnic Chinese MP, Raymond Huo霍建强 works very publicly with China’s united front organizations in New Zealand and promotes their policies in English and Chinese. Huo was a Member of Parliament from 2008 to 2014, then returned to Parliament again in 2017 when a list position became vacant. In 2009, at a meeting organized by the Peaceful Reunification of China Association of New Zealand to celebrate Tibetan Serf Liberation Day, Huo said that as a “person from China” (中国人) he would promote China’s Tibet policies to the New Zealand Parliament.

Huo works very closely with the PRC representatives in New Zealand.  In 2014, at a meeting to discuss promotion of New Zealand’s Chinese Language Week (led by Huo and Johanna Coughlan) Huo said that “Advisors from Chinese communities will be duly appointed with close consultation with the Chinese diplomats and community leaders.” Huo also has close contacts with the Zhi Gong Party 致公党 (one of the eight minor parties under the control of the United Front Work Department). The Zhi Gong Party is a united front link to liaise with overseas Chinese communities, as demonstrated in a meeting between Zhi Gong Party leaders and Huo to promote the New Zealand OBOR Foundation and Think Tank.

It was Huo who made the decision to translate Labour’s 2017 election campaign slogan “Let’s do it” into a quote from Xi Jinping (撸起袖子加油干, which literally means “roll up your sleeves and work hard”). Huo told journalists at the Labour campaign launch that the Chinese translation “auspiciously equates to a New Year’s message from President Xi Jinping encouraging China to ‘roll its sleeves up’.” However, inauspiciously, in colloquial Chinese, Xi’s phrase can also be read as “roll up your sleeves and f..k hard” and the verb (撸) has connotations of masturbation. Xi’s catchphrase has been widely satirized in Chinese social media.  Nonetheless, the phrase is now the politically correct slogan for promoting OBOR, both in China and abroad. The use of Xi’s political catchphrase in the Labour campaign, indicates how tone deaf Huo and those in the Chinese community he works with are to how the phrase would be received in the New Zealand political environment. In 2014, when asked about the issue of Chinese political influence in New Zealand, Huo told RNZ National, “Generally the Chinese community is excited about the prospect of China having more influence in New Zealand” and added, “many Chinese community members told him a powerful China meant a backer, either psychologically or in the real sense.”

and

During his successful campaign for the Auckland mayoralty, in 2016, former Labour leader and MP, Phil Goff received $366,115 from a charity auction and dinner for the Chinese community.  The event was organized by Labour MP Raymond Huo. Tables sold for $1680 each. Because it was a charity auction Goff was not required to state who had given him donations, but one item hit the headlines. A signed copy of the Selected Works of Xi Jinping was sold to a bidder from China for $150,000. A participant at the fundraiser said the reason why so many people attended and had bid strongly for items was because they believed Goff would be the next mayor.  In individual donations, Goff’s largest donor, giving $50,000, was Fuwah New Zealand Ltd, a Chinese-owned company building a 5-star hotel on Auckland’s waterfront and working closely with the New Zealand One Belt One Road Promotion Council.

and

In June 2017, at the Langley Hotel in Auckland, the State Council Overseas Chinese Affairs Office hosted an update meeting to discuss the integration of the overseas Chinese media with the domestic Chinese media. In attendance was Li Guohong, Vice Director of the Propaganda Department of the State Council Overseas Chinese Affairs Office, and other senior CCP media management officials, representatives of the ethnic Chinese media in New Zealand, representatives of ethnic Chinese community groups, and Labour MP Raymond Huo.  Update meetings (通气会) are one of the main ways the CCP relays instructions to the domestic Chinese media, in order to avoid a paper trail. Party directives are accorded a higher status than national law.

For someone who claims that his activities and involvements are all fair and proper and just the sort of thing one expects MPs to do, he and his masters certainly act –  in the Brady affair –  as if there is something to hide, something that might leave them rather uncomfortable.

That is supposed to be the point of parliamentary scrutiny, parliamentary inquiries.  But not, it appears, in this country, on these issues.  Better to keep Madame Wu happy than bother overly much about our own people, their interests, and their system of government.  It is still an odd call though.  Professor Brady shows no sign of being intimidating or stopping her work. If it refuses to engage and examine the issues she is raising, Parliament reveals itself the problem more than the people we can look to for the solution.  Oh, but I forgot, according to the government there is no problem.

 

The China Council defends itself

After my interview on Morning Report yesterday about Jenny Shipley and the New Zealand China Council, the Executive Director of the China Council Stephen Jacobi was tweeting that it had been a “hatchet job”.    This morning Radio New Zealand interviewed him: he observed that my comments, noting that the China Council in effect served as a propagandist for Beijing’s interests, had “put me off my muesli”.

It was a fairly soft interview that really did nothing to dispel the suggestion that the China Council – substantially funded by the government, with two very senior public servants on the Board –  serves, in effect, as a propagandist for Beijing’s interests.  The fact that the people involved probably think they are primarily serving their own commercial interests, and perhaps even some warped conception of the national interest, doesn’t change that.   Unfortunately, the interviewer didn’t ask Jacobi for a single example of a case where the China Council had been critical of the PRC.  For the record, I haven’t been able to find a single example.   Around a regime so egregious –  in the way it operates at home, in other countries, in New Zealand, in commercial and in political spheres –  that really tells you all one needs to know.   It looks a lot like a body solely motivated by deals, dollars, and donations, and using public money to try to keep the public quiet.   When you treat as normal a regime that represents so much that is evil, you serve their ends, even if that is not necessarily your conscious intent.   A well-publicised gala dinner for the emissary of the CCP/PRC, just helps make that more egregious.  Supping with the devil, without even a desire for a long spoon.

But the interview probably was useful in explaining to listeners some of how the China Council works.  It is an incorporated society, sponsored by the previous government, with substantial government funding (and senior public servants on the Board).  The rest of the funding comes from the corporate or individual members of the Council, who are able to leverage the government funding to advance their business interests around the PRC (not necessarily directly –  as Jacobi notes, Fonterra doesn’t need the China Council to handle its relationship with the PRC –  but in managing the climate of opinion in New Zealand, attempting to neutralise any criticisms of the PRC).  There is no PRC government money involved, but two of the Executive Board members also hold positions in PRC-sponsored entities in China (the Confucius Institute worldwide programme and the Boao Forum).   One of the Advisory Board members was a former member of the PRC military intelligence system, and a Communist Party member.

Jacobi claims that the China Council works for all New Zealanders and in the national interest. You might have supposed that that is what we have the Ministry of Foreign Affairs and Trade (even NZTE) for, and what we elect politicians for.  The former work to politicians, and the politicians themselves we can toss out.    The China Council seems more about trying to articulate a view of the national interest that happens to suit the commercial imperatives of those involved.  Of course, it is pretty well-aligned with the views of senior figures in both main political parties, which boil down to “if at all possible, never ever say anything that might upset Beijing”, while cowering in the corner even when friends and allies (or fellow New Zealanders) are under attack.  If a life worth living is about more than just dollars, it is a pretty sick conception of a “national interest”, although easy to see how it might be in the narrow individual business interests of some firms, universities etc.   Jacobi claimed that none of the people involved would allow themselves to be duped or a mouthpiece for a foreign government.  At one level I’m sure that’s true: they aren’t duped, they are simply prioritising their commercial interests over any sense of decency, or of the integrity of our own political and social system.   These things just don’t matter (enough) to them.

I had a look yesterday at the rules of the China Council

china council rules incorporated society

I was interested to learn that, for a body set up and sustained by the government, allegedly to advance the “national interest”, actually it is a self-perpetuating oligarchy.   You can only join this Council (not the Executive Board, but the society itself) if you are invited to do so by the Executive Board.  And who appoints the Board?  Why, the Board itself appoints its own members.    In a genuinely private organisation that might be just fine  (their choice) but this is a publicly-funded, government-sponsored body, where two of our most senior public servants themselves sit on the Board.   Don’t expect (for example) Anne-Marie Brady to be showing up on the council any time soon –  a Council that can’t even bring itself to express concerns about the way a New Zealand citizen, expert on the PRC, appears to have been harrassed and worse by people rather more directly attempting to serve PRC interests.

As I said, it was a pretty soft interview.   Jacobi was asked about my suggestion that the Council never ever says a word critical of the PRC.  He parried this by observing (correctly enough) that they do note from time to time that there are differences in our systems, and that he even says (again from time to time) that the way we interact with the PRC needs to take account of our values.    But it just doesn’t make any practical difference, and neither Jacobi nor his masters (on the Executive Board or in Wellington) seem to want it to.  Such things shouldn’t get in the way of the dollars (whether exports or political party donations).    When news of possible ban on Huawei emerged, the China Council’s statement seemed a lot more concerned to protect Huawei than it did about the national security etc of New Zealand.  When the GCSB was issuing a statement about PRC state-sponsored intellectual property theft, the China Council was totally silent –  not a press statement, not a tweet nothing.    When serious concerns have been raised by Jian Yang’s past, included acknowledged misrepresentations on his immigration/citizenship forms, the China Council goes into bat for this former PRC intelligence officer, keeps him close on their Advisory Council, and repeatedly attempts to invoke the x word.   When public debate, led by the work of Anne-Marie Brady, gets going, the China Council can only lament it.  It never substantively engages –  for example with the specifics of Brady’s work.  And that is the sort of thing I mean when I say that the China Council (whatever their individual subjective intentions) objectively serves Beijing’s interest and ends.

As I said the other day, there might well be a place for some public funding for a serious think-tank or independent body devoted to serious analysis, research, and debate around the nature of the relationship with the PRC.  It is a big and a powerful country, with values very much not our own, and there are all manner of dimensions to a relationship.  The China Council is nothing of that sort –  in its own purpose statements, it is an advocacy body, championing ever-closer relationships with a regime so evil, with no serious interest in exploring risks, threats, or downsides.  That serves Beijing’s interests.

Towards the end of the interview Jacobi was asked about the position of Jenny Shipley on the China Council’s Executive Board.  Jacobi attempted to parry that by suggesting it was above his pay grade (a matter for the Executive Board) –  which might leave one wondering why Don McKinnon (the chair) didn’t front up instead.   Jacobi told us that McKinnon had spoken to Shipley, but said that he wasn’t aware of the content.    With a full week having now passed since the High Court judgment was handed down, and with the Prime Minister not willing to express any concern, it looks as though she is going nowhere.  In fact, Jacobi went on to speak highly of Shipley (former Prime Minister, “widely respected in China”), and to note that the China Council is not a financial institution or a commercial organisation.  That’s true.  It is more than that; it is a New Zealand government sponsored organisation.    I’m sure there is some fondness for Shipley in Beijing –  cover for Jiang Zemin against protestors all the way through to interviews declaring how wonderful the Belt and Road Initiative is.   But this is someone who presided over the failure of a major company in New Zealand, allowing it to trade for years while insolvent, failing in her basic duties.   That isn’t acceptable conduct in New Zealand.  A person with that track record –  perhaps especially when a former Prime Minister –  shouldn’t be holding high-profile semi-government appointments.  For her to keep on doing so tells you about the Prime Minister’s, the Foreign Minister’s, and the China Council’s Board and Executive Director’s values and priorities.  Again, it wouldn’t appear to be decency and integrity.

As it happens, skimming through the China Council rules I came to the section headed “Expulsion”.  It had this provision under which the Board could expel a member

expulsion

Seemed to cover the Mainzeal situation and the recent High Court ruling quite well.

But if the self-perpetuating business and political people on the China Council board –  including the Secretary of Foreign Affairs no less –  think Shipley’s ongoing presence among them isn’t unbecoming or damaging to their interests, it really probably tells you all one needs to know about the tawdry China Council, simply pursuing the dollars and always looking away from the evils –  at home, abroad, and here –  of one the worst regimes on the planet today.  Propanda isn’t just telling upbeat lies, it can include minimising evil and treating as normal and respectable the perpetrators of those evils.

But quite at home with Ardern, Haworth, Bridges, McClay, Goodfellow and the rest of our political “leaders”.

Postlude

In a post the other day, I ran an extract from this article about PRC forced labour camps from the Italian site Bitter Winter.  A prominent New Zealander later told me it had shaken him.  Here is another extract

The living conditions in prisons are deplorable. Prisoners often eat vegetable-leaf soup with insects floating in it. As a result of malnutrition, they often feel dizzy and do not have the strength to work.

To ensure that prisoners complete their work even when physically exhausted, the prison authorities resort to torture.

The interviewees report that prison guards incite the more vicious prisoners to discipline other inmates. Thus, it is common to be beaten by “prison bullies” when someone fails to complete the task. Mr. Zhu told Bitter Winter, “If a prisoner cannot complete their task, the prison guards will tie the prisoner’s hands and feet to an iron fence, and they are forced to stand continuously except during meals. Whether in winter or summer, they remain continually tied up for three or four days and aren’t allowed to sleep.”

This sort of thing is just fine by the China Council, Jenny Shipley, or Stephen Jacobi?  Or do they just not care.  Hard to tell which is worse.

We can’t fix other countries.  We can demand some self-respect and decency around how we do things here.   Neither Jian Yang nor Jenny Shipley has any place near a China Council that really served New Zealand interests, consistent with New Zealand values.

 

Shipley and the China Council

Last week I wrote a post about Jenny Shipley’s position in the wake of the High Court judgment against her and other directors of Mainzeal.

I noted then that her position as chair of the local China Construction Bank was almost certainly untenable.  Even if, for some reason, the owners (the parent bank) had still been happy to have her, the Reserve Bank could not have allowed her to remain in her post and still retained any credibility around its “fit and proper person” regime. The Mainzeal board, chaired by Shipley, had continued trading for years with negative equity, with only the weakest suggestions of possible support from the parent.  Corporate law is designed to protect creditors from that sort of corporate (mis)governance.

Shipley has now announced that she will be leaving the China Construction Bank board.   We don’t know how much of a role the Reserve Bank played in that departure. No doubt they would hide behind the Official Information Act (or worse, section 105 of the Reserve Bank Act) and refuse to tell us.  That is a shame: it is a lost opportunity to demonstrate to the public that the regime has teeth when it comes to seriously problematic individuals. Mind you, I guess it might also leave them open to questions about how it is that they were happy to have Jenny Shipley chairing a New Zealand bank for the last several years, as more and more information about the Mainzeal situation emerged.

The focus now turns to Shipley’s role on the Executive Board of the New Zealand China Council.   In my earlier post I commented on this only briefly

As for Shipley’s membership of the executive board of the China Council……surely that tawdry taxpayer-funded body that sticks up for Beijing at every turn, has Jian Yang on its advisory board, defends Huawei, and won’t stick up for Anne-Marie Brady is just the place for her?  Then again, if the government doesn’t want the last vestiges of any credibility its propaganda body still has to be in shreds, they should probably remove her too. 

Shipley has clearly been very much in the good graces of Beijing over the years.  It wasn’t long ago that she had actually been on the parent board of the China Construction Bank, and she is now on the board of the regime-sponsored Boao Forum.   She has a long history of giving cover (literally in this case) to Beijing, going back to her brief time as Prime Minister.   Even that interview she gave to the People’s Daily back in December suggests a strong (and useful to Beijing) alignment between her public views and the preferred stances of Beijing.

But it isn’t clear whose interests are now really being served if she remains on the Executive Board of the China Council –  except perhaps those like me who poke the stick at this taxpayer-funded pro-Beijing advocacy and propaganda body.

Perhaps it suits Beijing to have such a tainted individual on their tame domestic lobby group.  See, democracy  and ‘doing the right thing’ is so enfeebled in New Zealand that our friend gets to retain her public position despite the very evident systematic poor governance on display at Mainzeal.   Perhaps, but Shipley’s failings are now sufficiently evident –  and will now always be associated with her name – that is doesn’t look as though it would really help the cause of keeping New Zealanders lulled into obliviousness about the nature of the regime.  The China Council is supposed to look like a bunch of decent public-spirited New Zealanders.

For similar reasons it can’t really be in the interests of the China Council itself for Shipley to stay on.  All the other, individually decent, people who sit on the Executive Board will be tarred by association.  You can’t so fundamentally mismanage a major business, resulting in huge losses for many people as a result of choices that were irresponsible and probably illegal, and expect to keep right on in prominent governance roles.    It wasn’t one small mistake early in someone’s career, but a big and very costly mistake for someone with the seniority and experience people should have been able to count on.  Shipley might still be well-connected in China, but there are other people with connections (if not, I’m sure Madame Wu at the PRC Embassy could help with introductions).  And everyone knows that neither corporate governance nor political governance in the PRC operate to the sorts of standards we expect in New Zealand.    If the China Council really wants us to believe that they champion New Zealand standing for New Zealand values, standards, and interests –  not just pre-emptively submitting to Beijing’s preferences – it should be in their interests too to get Jenny Shipley off their board, and quickly.

In a sense who owned Mainzeal shouldn’t be that relevant here –  the failure of the directors was alarming and unacceptable whoever the shareholders had been – but the fact that the firm was owned by someone originally from the PRC, and with extensive interests back there, just strengthens the argument around appearances.   The suspicion has been that, in effect, the China Council serves PRC interests more than those of New Zealanders.  A harsh critic might suggest something similar (perhaps unfairly) about the Mainzeal board.

And it shouldn’t be in the government’s interest for Jenny Shipley to remain on the China Council board either.  I was staggered at the way the Prime Minister the other day sought to avoid any responsibility or any involvement.

Prime Minister Jacinda Ardern was earlier asked whether she had any problem with Shipley being on the New Zealand China Council. She said it was not an appointment the Government had any role in.

The rules of the incorporated society that is the China Council are not readily available, so I’m not sure quite what the formal mechanism is for appointments to the Executive Board.  The China Council’s website also doesn’t say.   But it shouldn’t matter greatly.  The government pays

The Council receives approximately two thirds of its operational funding from the New Zealand Government through an annual grant from the Ministry of Foreign Affairs and Trade. 

[UPDATE: The latest set of accounts suggest just under half now, but with the government clearly the single largest funder.]

and very senior government officials serve on the Executive Board with Shipley.

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.

It is a creature of the New Zealand government and the Prime Minister simply can’t avoid responsibility.  I wonder what the Foreign Minister –  no fan of Shipley –  thinks?  Is the Secretary of Foreign Affairs and Trade really comfortable serving on an Executive Board with someone like Shipley?

Perhaps there are discussions going on behind the scenes, but after a week since the judgment was handed down, it is quite inappropriate that Jenny Shipley is still on the Executive Board of this prominent government-funded body, and that the Prime Minister won’t express a view on the appropriateness of Shipley’s position.

I was debating this point with someone the other day who argued that if the Prime Minister expressed a view she would open herself to attacks from the National Party (presumably something about inappropriate interference, or upsetting (Todd McClay’s, Jian Yang’s, Peter Goodfellow’s friends in) Beijing).   Well, maybe, but I wouldn’t have thought Jenny Shipley, in her current position, is someone even National would want to touch with a barge pole.  Are those the sorts of business governance practices National wants to defend, in public?  I can’t imagine so.

And so if the Prime Minister won’t express concern about a senior figure, found to have grossly underperformed in a very prominent governance position, it risks looking as though (a) the Prime Minister isn’t bothered by such misconduct (generally) or (b) remains more interested in not upsetting friends of Beijing and Beijing’s sensitivities than about defending acceptable standards of corporate governance and decency here in New Zealand.  She associates herself with all the tawdriness of the China Council –  defences of Huawei, silence on Jian Yang, silence on Anne-Marie Brady, and a general reluctance ever to articulate New Zealand interests when, as inevitably happens, those sometimes clash with those of the PRC. Perhaps it buys her an easier life in the short-term.  In the longer-term it further corrodes whatever reputation for decency she might once have had.  It simply shouldn’t be in her interests, or that of the government, for Shipley to remain on the China Council board.  And no one really doubts that – as the agency holding the purse strings –  if she wanted Shipley gone she would very soon be gone.

Whatever other contributions Jenny Shipley may have made over the years, her record at Mainzeal now means that she diminishes the standing and reputation of any body or individual that continues to use her in governance roles, or which support her in such roles.  Foremost among those now, the Prime Minister and the China Council itself.   As one expert noted in the Dominion-Post this morning, the market has ways of taking care of these issues – Shipley (and her other fellow Mainzeal directors) might now struggle to get directors and officers liability insurance.   But those mechanisms can’t protect us when it comes to public bodies. Only leadership protects us there.  But at present there seems to be a void – an abdication – where leadership on this issue should be.

I did an interview with Morning Report on this issue this morning.  If they put the audio up I will link to it.  [UPDATE: In fact, here it is.]

UPDATE:  A reader has pointed me to where the constitution and rules of the China Council are online (details in a comment).  It appears that the Executive Board is self-selecting and self-perpertuating

CC rules

The point remains that if the Prime Minister, representing by far the largest funder, wanted Shipley off the Executive Board (a) she would almost certainly be gone quite quickly, and (b) even if she wasn’t, the PM would have made clear her refusal to countenance the standards of corporate governance on display in the Mainzeal case.

Standing for what they believe in

There was a story on Stuff yesterday (in the Domininion-Post this morning) about Air New Zealand’s “generous provision” of free airfares to the New Zealand China Council.  The China Council, you will recall, is the largely taxpayer-funded propaganda body set up by the previous government to champion good and quiescent relationships with the party-State in Beijing, the People’s Republic of China.  “Good” relations with the PRC, of course, means never ever saying or doing anything they don’t like.  Friendships aren’t like that.

Air New Zealand’s funding for the China Council bothers me no more or less than the mindset that governs the whole relationship with the PRC, whether among officials, politicians, or business leaders (and if there are any exceptions, they keeep very very quiet).  It seems that, pure and simple, it is all about the money – whether trade deals, sales in the PRC, or the flow of political donations.  If Air New Zealand wants to fly to the PRC, it needs to keep sweet with the regime, and needs to keep the New Zealand government (and public) on the straight and narrow, not making difficulties for them, as far as possible.  If the China Council can help them do that, why wouldn’t they –  having decided to sup with the devil – provide support for those who can help their cause.  It isn’t done out of the goodness of their heart, but out of pretty cold commercial calculation.   And since the taxpayer has already been coerced to cover much of the China Council’s activities, it is probably pretty cheap PR expenditure.   Whether Air New Zealand is majority state-owned (as it is) or not isn’t really relevant.

I don’t suppose most people associated with the China Council really see themselves as getting involved to serve Beijing’s interests (there might be exceptions –  individuals on the Advisory Board with close ties to the regime, including its United Front organisations, and individuals on the Executive Board –  including our former Ambassador to the PRC and our former Prime Minister – who hold positions in regime bodies).  Probably most of them think of themselves as serving “New Zealand’s interests”, but people have a funny way of interpreting their own personal (or business) financial interests as being much the same thing as the “national interest”; perhaps the more so, more money is involved.  But whatever story they tell themselves, they nonetheless objectively do serve the PRC regime’s interests.  That is the effect of their involvement, their choices, their silence.

When you walk by evil every day, when your organisation exists to minimise and distract from evil, when you are indifferent to the values of New Zealanders, and the abuse of those values in the PRC, you serve the regime’s end.  It is as simple as that.  And for a regime that is among the most evil on the planet today –  certainly the most of evil of those who in any material way impinge on New Zealand.  Air New Zealand is part of that.  So are Don McKinnon, Jenny Shipley, Tony Browne, Grant Guilford, Cathy Quinn and the rest of them (including their hired gun and front person Stephen Jacobi).

I’m an economist by training, so I’m quite happy to sign up to the notion that trade is generally mutually beneficial for those directly participating.  But each of us, actively or passively, makes moral choices about those with whom we deal.   Big companies and their bosses, even more than individual citizens, have real and effective choices.  Those who associate themselves with a tawdry body like the China Council reveal the nature of their choices, of their values.

It is not as if the China Council exists to encourage real and open debate about the PRC and how New Zealand should engage with, respond to, and deal with it.   Such a body might, arguably, be a useful thing for taxpayers’ money to be spent on.   After all, it is a big country, and that sort of debate doesn’t even exist to any serious extent in our universities –  keen on their PRC students, (several) keen on the (PRC) Confucius Institutes, and where the Contemporary China Research Centre is chaired by someone who helps promote the regime agenda through the Confucius Institute movement.

But that isn’t the China Council.  The China Council is about keeping the (New Zealand) peasants in line and pandering to the regime in Beijing – that gala dinner, for example, for the new Ambassador.   To make out that the PRC is a normal, honourable and decent regime.

Where’s the evidence?   All around really.  Reports (pretty lightweight ones) championing one of the regime’s key geo-strategic initiative (the Belt and Road), public statements defending Huawei (and never any examination of the other side of that story), the constant attempts to trivialise –  or tar as racist or “xenophobic” –  any serious debate about the PRC and New Zealand.  This, as a reminder, was from their Annual Report last year

An, at times, unedifying debate about the extent of foreign influence in New Zealand risks unfairly targeting New Zealanders of Chinese descent

And you’ve never seen the China Council engage with the substance of Anne-Marie Brady’s work, never heard them express concern about the apparent threats to Brady’s physical safety, never heard them express concern about the regime control of most of the local Chinese language media, never ever heard them express concern about human rights abuses –  on the most egregious scale – in the PRC, and never heard them express concern about the growing evidence of PRC attempts to interfere in countries around the world, about the threat to Taiwan, or the militarisation of the South China Sea.  We’ve never heard them express concern about PRC attempts at economic coercion –  other perhaps than encouraging pre-emptive submission.  They just aren’t a serious body.  They are a cynical propaganda body –  largely paid for by your taxes and mine – serving the business interests of those involved, and –  in effect –  the wider interests of Beijing,  The test: when there has been any clash between the interests/values of the regime and the interests/values of New Zealanders, have they ever openly sided with the latter?  Not once (that I’m aware of).

If the private sector was stumping up all the funding for this lobbying and propaganda effort, we might just call it freedom of expression I suppose.  If you choose to sell your soul, then (within limits) I guess you can champion your cause.   As it is, taxpayers’ money –  and the choices of successive New Zealand governments –  is being used to serve the personal interests of these businesses, and of the political parties concerned.   I’m not suggesting private or public companies should be banned from doing business in the PRC, but they should be told much more than is common anywhere that they are on their own.  Dine with the devil if you must, be take a long spoon, and don’t be asking for support from the rest of New Zealand.   But we’d be better off as a country –  have rather greater moral clarity –  if there was less business undertaken with the PRC, given the nature of the regime.  There might be a modest economic cost –  but it would be modest – but let’s be grateful that business interests weren’t allowed to distract us from eventually standing up and taking on the Nazi regime 80 years ago.  The parallels with the PRC today are almost too numerous to list.

But, of course, it isn’t just businesses that have sold their souls.  Successive governments and political parties are at it too –  recall those National and Labour party presidents off in China praising the regime.  This one seems to be no different in substance.

Yesterday a local Labour Party supporter dropped into my letterbox a Labour brochure headed “Our plan for New Zealand”, replete with photos of the Prime Minister.  I might write about the (lack of) economic substance in another post, but what caught my eye was this page.

ardern 2

The Prime Minister promises to “make New Zealand proud”.  How?  “By continuing our tradition of standing up on the world stage and upholding our values”.

And we are supposed to take this seriously?  A Prime Minister who will not talk openly about Xinjiang, who will not talk openly about the abducted Canadians, who will not talk openly about the militarisation of the South China Sea or the growing threat to Taiwan, who will not talk openly about the regime’s intellectual property theft, who says nothing about Jian Yang, who never utters a word about the sustained persecution of Falun Gong followers, Christian believers, civil rights activists and so on, and who won’t even stand up pro-actively in defence of Anne-Marie Brady.  If she herself won’t speak about, she also shows no sign of welcoming or encouraging those who do.

She probably isn’t any worse than the other lot (Todd McClay and the “vocational training centres” that are really no concern of ours), although her approach is made all the more nauseating by the pretence to representing something better –  all that talk of kindness, empathy, values, and so on.   The best test of a person’s values is how they choose to act.  Evidence to date is that our Prime Minister shares much the same “values” as the China Council –  don’t rock the boat, never stand for anything other than commercial interests (and party donations).  What you won’t pay a price for is in no serious sense a “value”.

I read this morning an article from the Italian site Bitter Winter.   Perhaps I could commend an article like this to the Prime Minister and to Mr Jacobi (or to Simon Bridges, Christopher Luxon, Don McKinnon, Tony Browne, Jenny Shipley, Jian Yang, Raymond Huo and the others).

One Christian who was previously assigned to work in a brick kiln described his working environment. “The brick kiln’s temperature can reach 60 or 70 degrees Celsius (about 140-160 degrees Fahrenheit). If prisoners are careless, they will be scalded, and their hair will be scorched. The prison authorities do not provide temperature-resistant shoes. Prisoners must stand on one foot, shifting from the left to the right. If someone spends too long on one foot, he will get burned and develop blisters. New prisoners couldn’t even last for five seconds before having to run out of the kiln. But whenever the manager saw someone running out, he would flog them with a pipe.”

Heavy labor made this Christian think about death. One time, after he tried to commit suicide, the team leader disciplined him by beating him and shocking him with an electric baton.

The living conditions in prisons are deplorable. Prisoners often eat vegetable-leaf soup with insects floating in it. As a result of malnutrition, they often feel dizzy and do not have the strength to work.

To ensure that prisoners complete their work even when physically exhausted, the prison authorities resort to torture.

The interviewees report that prison guards incite the more vicious prisoners to discipline other inmates. Thus, it is common to be beaten by “prison bullies” when someone fails to complete the task. Mr. Zhu told Bitter Winter, “If a prisoner cannot complete their task, the prison guards will tie the prisoner’s hands and feet to an iron fence, and they are forced to stand continuously except during meals. Whether in winter or summer, they remain continually tied up for three or four days and aren’t allowed to sleep.” In order to avoid corporal punishment, Mr. Zhu had to work hard to complete his production task.

I don’t suppose any of those people would be comfortable reading this sort of stuff (perhaps Jian Yang would be different –  he actually worked for the regime for years) but squirming slightly uncomfortably as you read it means nothing if you don’t –  when you can – do or say something.  There are plenty of areas in which I disagree with much of the consensus opinion of those who hold power in New Zealand, but what really upsets me about the PRC issue is the utter practical indifference to stuff these people all individually and privately know and agree is evil; stuff they’d not even considering supporting here.  And yet each of them choose –  by their actions and their passivity –  to give cover to such evil, on large scale and small.   They compromise themselves –  and they take our money to do it.

One day, I guess, they’ll be judged before the bar of history –  as the appeasers of the 1930s, the fellow-travellers with the Soviet Union were – but in the meantime I guess they’ll keep the dollars (deals and donations) flowing.  And evil will prosper just a little more because of choices those people make.

Unfit to govern

I’m probably the sort of person the National Party used to count on voting for them.   National was the only party I was ever a member of, the only party I ever canvassed for. There were family connections, and there were the founding principles, every one of which I identified with (and do still).   Even in Wellington, middle-aged conservatives might reasonably have been assumed to support National, even if (at times) through gritted teeth.  One of those founding principles talked, perhaps slightly quaintly, of “countering Communism”, and it seemed to be something taken fairly seriously throughout the post-war decades.  There was a suggestion of some values; a suggestion of things that mattered beyond just the next business deal.  Friends and allies, people and countries with whom we shared those values, seemed to count too.

But over the last couple of decades, New Zealand political figures, and the National Party ones in particular, seem to have binned any sense of decency, integrity, or values when it comes to Chinese Communist Party ruled China. I don’t suppose that individually most of them have much sympathy for PRC policies and practices, but they just show no sign of caring any longer.  Deals, donations, and indifference seem to be the order of the day.

Over the last couple of years the depths the party, its leaders and MPs, have been plumbing have become more visible.  In 2017, in government, they signed up to a Memorandum of Understanding with the PRC on the Belt and Road Initiative.  In that document they –  Simon Bridges as signatory –  committed to “promote” the “fusion of civilisations”.      Plenty of people will probably dismiss such statements as “meaningless”, the stuff of official communiques.  But decent people –  under no duress whatever –  don’t sign up to things suggesting that today’s equivalent of Nazi-ruled Germany is a normal and decent regime.  Of course, they would probably dispute the parallel, but that’s just willed deliberate blindness.

Later that same year we learned that the National Party had had a former PLA intelligence officer, Communist Party member, sitting in their parliamentary caucus.  It seems to be generally accepted that Jian Yang, of such a questionable background, is one of the party’s largest fundraisers.   Presumably the leaders (Key and Goodfellow) were aware of his past, but lets be generous and assume that most of the caucus was as unaware as the public.    But for the past 18 months, everyone has known.    They also know –  because Jian Yang acknowledged as much –  that he deliberately misrepresented his past to get into New Zealand, telling us that Beijing had told him (and others in his position) to do so.   Breathtakingly, there is no sign that official agencies in New Zealand have done anything about those admissions, but National is now out of office so I guess one can’t blame them for that.

But what the National Party –  leader, president, MPs, and all those holding office in the party –  is responsible for is the fact that Jian Yang still sits in Parliament, still sits in the National caucus, is still a National spokesman (on a couple of minor portfolios), with the express support of successive leaders, and (apparently) in ongoing business relationships with the party president (he who trots of to Beijing to praise the regime and its leader).   And not one MP, not one national councillor, no other officeholder –  not one –  has broken ranks, and been willing to openly question (or deplore) just what has gone on.  Doing so might, I suppose, jeopardise their individual futures.  But values are the things you are willing to risk for, to pay some price for.    Rumour hath it that some people within the party aren’t entirely comfortable, but so what, if you aren’t willing to do, or say, anything?

A few months ago we had the egregious former Minister of Trade, and foreign affairs spokesperson, Todd McClay plumbing new depths.    In an interview with Stuff, he championed the PRC regime interpretation of the mass internment of Uighurs in Xinjiang, noting that

“the existence and purpose of vocational training centres is a domestic matter for the Chinese Government.”

If he’d just kept quiet at least there might have been some doubt about his decency, but he opened his mouth and left no doubt.  He was spinning for the CCP regime in Beijing.

Since then even the regime in Beijing has more or less admitted that, of course, that line isn’t true.  But we’ve heard nothing more –  and certainly no apology –  from Mr McClay or his leaders.

And, of course, every so often the National Party leader Simon Bridges pops up if there is ever the slightest sign that anyone in the current government is expressing even the mildest reservations about the regime in Beijing.  Never mind that the Defence strategy document stated no more (considerably less) than was obvious to blind Freddy, it was too much for Mr Bridges.  Never mind that reservations about Huawei seem to be increasingly widely shared by governments and intelligence agencies across the western world, it might lead to furrowed brows and discontent in Beijing, and we couldn’t have that could we?   Never mind too that, in government and in practice it is hard to conceive that things would have been any different on that particular score under National –  I don’t suppose even National is quite so far gone in Beijing’s thrall that they would simply walk away from Australia, the United States, a growing number of other western countries, and what appears to be assessments of our own intelligence services.    No sense at all in anything Bridges –  or any other National Party figure – says that the PRC itself has changed: bad as the regime always was, it has now become worse.

But it was comments the other day from National’s third-ranked member and finance spokesperson, Amy Adams, that really left me open-mouthed in astonishment.  Both at what she said –  even if it wasn’t far from what had seemed to be the National stance in practice –  but also at the lack of any other coverage of, or follow-up to, those remarks.    In an interview with NBR, (behind a paywall but here) we are told

National’s finance spokeswoman Amy Adams has accused the government of putting the economy at risk by offending China.

“The first thing is you don’t p[…] off your major trading partner and, let’s be really clear about this, China is our single biggest trading partner.”

Quite extraordinary.

One could clear the small things out the way first. For example, governments don’t trade with China, firms in New Zealand trade with firms in the PRC.  Sure, governments set some of the terms on which that trade occurs, but government isn’t a business.

One might also note that if the PRC is the largest “trading partner” for New Zealand firms, it is very similar in size to Australia in terms of total New Zealand trade.  Until about five years ago, the EU in total accounted for more of New Zealand’s trade than the PRC.  Australia remains by far the largest source of foreign investment in New Zealand.     And these days exports to each of our largest “trading partners” –  in an economy (New Zealand) that doesn’t trade much with the rest of world by international standards – account for about 5 per cent of  GDP, in total.  For many decades, a much larger proportion of our GDP was accounted for by trade with the UK.

Oh, and a large proportion of New Zealand exports (not all of course) are commodities, and if not sold in one market they will be sold in some other part of the global market.   PRC babies seem unlikely to stop drinking infant formula.

But what really staggered me was the bald sense in which National’s finance spokesperson appears to think that the interests and priorities of foreign governments are what should matter most to our government. Not our values, not our people.  On her telling, we’d never annoy Australia about anything (apple import cases to the WTO, illegal migrants/asylum-seekers on Nauru, New Zealand citizens being deported from Australia).    We’d never have taken on France over nuclear-testing (at a time when the UK was entering the EU, and trade access to our largest market was substantially in danger).  We’d never have fought for Imperial Preference for our exports to the UK in the 1930s.  We’d never have banned nuclear ships (the US wasn’t our largest trading partner, but the US and EU together were hugely important markets, and we relied on the UK government (Thatcher) to fight our corner for EU market access).  The then Australia government wasn’t best-pleased with that New Zealand policy choice either.   And more generally –  and much more dominant – Canada would never ever stand for itself on anything that involved the United States, or Ireland vis-a-vis the UK.  I suspect Denmark and the Netherlands had had significant trade ties to Germany pre-1940, but they didn’t exactly put out the welcome mat to Hitler.  Southern African countries chose to limit trade with Rhodesia, and confront South Africa, because they considered they had a just cause.  And so on.    (Note that I’m not endorsing all these causes, just noting the willingness of governments to upset their closest “trading partner”.)

Of course, this almost certainly isn’t what Ms Adams believes at all.   Presumably as a senior minister she had no problem at all with the fact that at times we had, and have, open differences with Australia.  In any relationship, no matter how important, there are going to be differences from time to time, and in international relations governments (at least democratic ones) aren’t supposed to act for themselves, or even for small favoured groups, but for the citizenry as a whole.

Instead, the Adams approach –  presumably endorsed by her leader –  is about a particular thuggish regime. It seems to be that we should defer entirely to Beijing’s prickly style and never ever do or say anything that might upset them, never display any self-respect, and simply engage in either anticipatory compliance or abject penitent submission.  Worse, apparently we should even make excuses for them –  or retail their propaganda lines, as per Todd McClay.  It is classic domestic abuse situation, and yet championed by someone who aspires to be a senior minister of a free country, perhaps even aspires to be the Prime Minister.   In fact, someone who was the Minister of Justice, who led legislative attempts to respond to the family violence problems.  I’m quite sure it wasn’t her advice to victims –  “oh, don’t upset him…ever”.    So why does she propose that our foreign policy towards the international abuser par excellence be essentially just that?  Act that way and all you do is encourage the abuser, and lock yourself further into the cycle of abuse, humiliation and loss of any sort of self-respect.

Of course, the difference here is that Adams ask us (citizens) to bear the abuse and humiliation –  leaders who remain silent in the face of evil, leaders who won’t stand up for the integrity of the system, and even spend our money to run PR-front organisations to champion the pro-Beijing perspective –  all to benefit a few specific businesses that have (consciously and knowingly) over-exposed themselves to a thuggish regime, and the substantial flow of donations to their own political parties.    Politicians like Adams simply encourage the over-exposure, and encourage the false subservience of victimhood.   If our businesses were dealing with organised crime, or with shonky people who didn’t pay their bills, we’d either insist or encourage them to cut their exposures.  If you deal with the Mafia you are on your own –  in fact, society will shun you, not tolerate you asking for us to pander to the leaders.  But when it is the PRC –  organised coercive threat if ever there was such –  our leaders simply want us to defer, and complain when their opponents show any sign of not being quite deferential enough to the bully.  And they simply let evil pass by, and in so doing make themselves complicit with –  and thus partly responsible themselves –  for the evil.

In his Beijing-deferential interview on the Herald website the other day, David Mahon tried to frame the current PRC upset with New Zealand as “the Chinese see it as akin to infidelity”.    What a sickening image, but perhaps one that brings us right around to the abused-spouse parallel.  New Zealanders made no vows to Beijing – although perhaps our craven political leaders did –  but when the merest squeaks are heard, the abuser – freshly drunk on newfound power – seems to feel free to attempt to squash and silence, while politicians, lobby groups and business interests cheer on not the abused “spouse” but the abuser.   New Zealand “leaders ” have been among the most sycophantic and compliant anywhere in the western world, so perhaps there is a sense that they can’t afford to let us get away with some renewed self-respect.  That, after all, might encourage others to think and act for themselves, for the values of their peoples.   Better to foster the illusion –  assisted by local politicians and academics –  that the PRC holds our prosperity in its hand.

It simply doesn’t. It never did.

But that’s New Zealand politics, that seems to be today’s National Party. It is sickening.

 

 

“This country has prospered over the past decade, while other economies have suffered”

Or not.

The title to this post was taken from the latest column from veteran political journalist Barry Soper.  Apparently he had had some readers get in touch, not entirely convinced by his PRC-related articles earlier in the week.

They all ignore the fact that this country has prospered over the past decade, while other economies have suffered.

The Key Government’s management of the global financial crisis has been lauded but without the free trade agreement, signed in the Chinese capital as the final act of the Clark Government, this country wouldn’t be where it is today.

The puerile keyboard warriors’ bile is too vile to repeat but it seems to be based on envy, that the Chinese, after generations of deprivation, have shown the world they can compete and are a force to be reckoned with.

I’m not sure quite what he bases these assertions on (although it is the sort of line that less well-grounded champions of Beijing, including former Foreign Minister, Murray McCully, have repeatedly tried to run).  “Be grateful, peasants” seems to be the tone, for the CCP in Beijing has graciously bestowed its bounty upon you.

I don’t want to waste much time on the alleged PRC success story.    When you do so much damage to yourself, and then stop the self-destruction, of course you’ve got plenty of ground to make-up, and with half-decent policies you can do some of that quite quickly.   Here are the latest Conference Board productivity estimates.

China GDP phw feb 19

The PRC……not even half the levels of Korea or (decades of underperformance) New Zealand, not a third of Taiwan or a quarter of Singapore.     Who could possibly envy that sort of performance?  There was no obvious reason why China could not have matched the performance of Korea, Japan, or Taiwan.  Except that they chose to adopt, and continue to run, a system that consistently produces poor economic results.

But what I was really interested in was the assertion that New Zealand has had a really good economic performance over the last decade “while other economies have suffered”.  I guess if Greece, or even Italy, is your benchmark it isn’t too far wrong.  But then almost everyone does better than those troubled euro-crippled economies.

One comparison I like, and which I’ve run before, is between New Zealand and the United States.   Were there anything to the “we owe such a debt to Beijing, and have done so well ourselves” story, an obvious place to look might be a comparison with the United States.  After all, the US was the epicentre of the financial crisis itself, their central bank got to the limits of what it could do, and no one thinks Beijing someone “saved” the US.   And yet here is how real GDP per capita compares across the two countries since late 2007, when the last recession began.

US and NZ comparison GDP

We’ve mostly done very slightly better than the US over the decade or so, but there really isn’t much in it.   Certainly not a case of the US suffering and us “prospering”, whether thanks to Beijing or any other cause.

And to the extent we’ve done a touch better, it certainly isn’t reflecting stronger productivity growth.  The data are indexed to 100 in 2007.

US nz productivity

It isn’t just an us versus the US comparison either.  Over that decade, real GDP per hour worked rose by 4.4 per cent, but in the median OECD country productivity growth was 8.9 per cent.

And if Beijing and the (so-called) free trade agreement were the source of any special New Zealand prosperity, exports might be an obvious place to look.  Except that over the previous decade New Zealand exports actually fell a little as a share of GDP.  In the United States, and in all but a handful of other OECD countries, exports became a larger share of the economy.

Even on more purely cyclical measures, New Zealand still doesn’t stand out (at least on the good side).  The unemployment, for example, has come down a long way, but it is still quite a bit above the lows reached before the recession (at a time when demographics will be tending to lower the “natural” rate of unemployment).    In the United States, by contrast, the unemployment rate is below pre-recession levels. That is also true across the G7 as a whole, the EU as a whole, and the OECD as a whole (individual bad euro-area countries notwithstanding).

And if you don’t like the idea of comparing against the US –  even though it was the centre of crisis, and doesn’t owe anything in particular to Beijing –  here is how we’ve done against another group of countries, each now with productivity levels similar to those in New Zealand (and few doing much trade with the PRC).   Since all these countries started (in 2007) with productivity well behind global frontiers, all should have been able to do okay even if productivity growth at the frontier (eg US and northwest Europe) slowed.

small countries

Many did pretty well.  As for us – Beijing (alleged) beneficence notwithstanding –  either worst or second worst depending on your preferred measure.

As I noted earlier on, there are countries that have done a great deal worse than us.   But the suggestion that we have “prospered” over the last decade –  in some way materially outstripping the rest of the advanced world –  isn’t just a myth. It is worse than that.   And the people who run the story, whether as senior journalists or senior politicians should know better.

Countries mostly make their own prosperity.  We once did –  those decades when we really did lead the world.    We could again, although that might involve facing facts.  But these days politicians and their acolytes in the media seem more interested in playing distraction; in this case continuing to corrupt our system, supported by motivated fantasy stories about our (alleged) success and our (alleged) debt to Beijing.

 

Challenges and complexities

Interviewed on Radio New Zealand this morning, the Prime Minister conceded that there were “challenges and complexities” in the government’s relationship with the People’s Republic of China.    Fearful, and seemingly out of her depth, she wouldn’t or couldn’t identify any of those “challenges and complexities”.   And yet she is criticised for not doing enough to keep in Beijing’s good graces by the person in New Zealand politics with an even worse record on PRC issues –  Simon Bridges, leader of the National Party.

I don’t have anything much to say about the Air New Zealand story, or any particular reason to doubt the slowly-emerging explanation (which itself seems to have a PRC-coercion dimension, dating back to last year’s PRC insistence that airlines not suggest that Taiwan –  an independent democratic country –  was in fact or in any way not part of the PRC).  It is just that were the true story to have been more worrying, it isn’t clear that Air New Zealand would have much incentive to be straight with customers or the public: they have an ongoing business to run and Beijing relations to keep smooth (and, of course, the chief executive is the chair of the PM’s Business Advisory Council).    But perhaps leaks from within Air New Zealand would mean the truth still got out?

What of the two Barry Soper stories (this one from the front page of the Herald, and this opinion piece)?   The first is introduced this way

Diplomatic links with China appear to have plummeted to a new low as Prime Minister Jacinda Ardern is given the cold shoulder by Beijing and a major tourism promotion is postponed by the superpower.

Of the visit to Beijing, we learned this yesterday

Ardern confirmed she had an invitation from the Chinese administration to meet President Xi Jinping, but the problem was finding a suitable date. She was meant to meet with the President at the end of last year.

She wouldn’t say whether or not she was confident the meeting would take place this year.

In other words, she isn’t confident it will happen at all.   What is hard to understand is why any self-respecting person would put themselves through this rigmarole?   Abasement before the emperor, and all for the sake of a few New Zealand businesses (often taxpayer subsidised ones) that have got themselves too exposed to a country with a noxious regime.   She keeps telling us we are an independent sovereign state, not some tributary regime.  Why can’t she just politely walk away (and get some aide to make her a note of how constructive and useful  –  enhancing to their reputations –  foreign leaders meetings with Adolf Hitler were).    Perhaps late last year the “scheduling” excuse –  “we all have busy calendars” –  might have washed with some.  It clearly doesn’t now.  And that shouldn’t worry New Zealanders.  It shouldn’t be a cause for reproach from an Opposition leader who (a) has never distanced himself from his foreign affairs spokesperson’s defence of the PRC concentration camps in Xinjiang, and (b) who retains in his caucus, and expresses support for, a Chinese Communist Party member and former PLA intelligence official, and who (c) is understood to rely on that member as one of his largest party fundraisers.  That is where the focus should be, not on selling our souls for a meeting with Xi Jinping.

And then there is the year of the Chinese tourist,

The 2019 China-New Zealand Year of Tourism was meant to be launched with great fanfare at Wellington’s Te Papa museum next week, but that has been postponed by China.

Industry people and regime-sycophants had been very keen on this exercise.  The Contemporary China Research Centre –  funded partly MFAT, chaired by a New Zealander with a significant role in the global Confucius Institute movement – was even hosting a conference on it late last year.   But this isn’t some sort of normal country.  What Beijing giveth, Beijing can also take away.  We are told

Richard Davies, manager of tourism policy at the Ministry of Business, Innovation and Employment, said: “China has advised that this event has had to be postponed due to changes of schedule on the Chinese side.”

Officials are now working with China to reschedule the opening.

Believe all that and you’ll believe anything.  But the Prime Minister claimed to believe it, telling her RNZ interviewer that she could only go on what she’d been told, and she’d been told there was a scheduling problem.  I’m sure she doesn’t really believe it, but why can’t she come straight with the New Zealand public?   She is supposed to serve us, not a small group of business interests.    Better to take explicit credit for a slightly more distant relationship with one of the most appalling regimes on the planet.  Especially if all that talk about kindness and empathy means anything at all.  But she won’t do that –  won’t square with the public about the nature of the regime she (and his predecessors) have been pandering too, all no doubt on official advice.

You got a sense of the sort of business sector pressure she seems to be under in how she responded to the interviewer’s questions about Huawei.  Much as the China-oriented bits of the business community – and the China Council –  must hate it, almost everything that has emerged on Huawei in the last couple of months only confirms how unwise any decent and self-respecting country would be to allow Hauwei equipment to play a key role in 5G networks.   And yet the Prime Minister seemed to interpret the question as a suggestion that we should back down and just let Hauwei –  and the PRC state –  do its thing.  ‘If we did that could we really say we had an independent foreign policy?” was the gist of her response.

Barry Soper seems to be championing some of that sort of “never mind national security, never mind self-respect, never mind the advice of longstanding friends and allies, lets never ever upset Beijing” line.  It was clear in his selection of people to quote from in his article.  There was this, apparently on Huawei

Asset management and corporate adviser David Mahon, based in Beijing, said governments needed to get over thwarting Chinese economic aims in a way reminiscent of the Cold War struggle between capitalism and communism. “It’s unhelpful for politicians and a few anti-Chinese professors to feed uncorroborated McCarthyite conspiracies about Chinese spy networks in their countries and targeting anyone who doesn’t share their view,” Mahon said.

Just lie back and let Beijing have its way seems to be Mahon’s perspective.  That isn’t how self-respecting people, or nations, act.  But perhaps if you are just desperate for the next deal none of that stuff matters?

And then there was more melodramatic stuff from Philip Burdon, until recently chair of the taxpayer-funded PR outfit the Asia New Zealand Foundation, and of course a longserving senior National Party figure.

Philip Burdon,….said New Zealand couldn’t afford to take sides.

“We clearly need to commit ourselves to the cause of trade liberalisation and the integration of the global economy while respectfully and realistically acknowledging China’s entitlement to a comprehensive and responsible strategic and economic engagement in the region,” he said.

Sources in Beijing say China plans trade retaliation…..

Two-way trade with China trebled over the past decade to $27 billion. “The implications for New Zealand are dangerous at every level,” Burdon said.

Wouldn’t it be nice if the PRC seriously committed itself to the practice of liberalisation?  Doesn’t seem likely.  And “respectfully acknowledge their entitlement”?  Like true vassals?

But what’s with this “can’t afford to take sides” business?  It has been a convenient framing for some time, as if we are asked to choose between the US and the PRC.  Even if that were the choice, the United States (for all its faults) remains much more in tune with the values and attitudes of New Zealanders than the lawless regime in Beijing does.  But, of course, the choice isn’t really between the US and the PRC, but between the PRC and New Zealand, or even (charitably) the interests of a small number of New Zealand businesses (and parties reliant on donations) and New Zealand as a whole.   Given that choice, we can’t afford our governments not to take sides, not to back New Zealand and its values and long-term interests.   That includes defending the integrity of our political system, defending the freedoms of ethnic Chinese New Zealanders (whose media and community associations seem to have been largely taken over by Beijing-affiliated groups), and being the sort of nation that stands up internationally for the sort of behaviour –  treatment of other people –  we expect.

There is more from Philip Burdon in Barry Soper’s op-ed

We can’t afford to let this diplomatic tightrope slacken and that’s most certainly the view of a Peters confidante, former Trade Minister in the Bolger Government and recently the chair of Asia 2000 Phillip Burdon.

The mushroom magnate says China has constructively sought to engage with New Zealand for which we should be grateful.

It’s utterly ridiculous, Burdon contends, that China has sinister plans to subvert and interfere in our society or in our democratic institutions.

Ah, it is a debt of gratitude –  perhaps serviced with periodic offerings of tribute –  that we owe to Beijing, at least according to Burdon, for all that “constructive engagement”.     What exactly was that?

As for Burdon’s final sentence, one presumes he is so far down the track of abandoning all sense of self-respect that the presence of a former PLA intelligence official, who hob-nobs with the embassy and never ever says anything critical of Beijing just doesn’t bother Philip Burdon.  There are deals I guess, and never mind the integrity of our system.  Perhaps it doesn’t bother him that Parliament’s justice committee is chaired by someone with close ties to various United Front institutions?  It should.       It isn’t necessarily that Beijing “has” sinister plans –  as if this is something in the future. The very fact that Jian Yang in particular still sits in Parliament, challenged by no one in the entire political spectrum tells you that, by accident or design, those visions have already been coming to pass.  Or when neither the Prime Minister nor the Opposition leader will make a clear stand in defence of Anne-Marie Brady and her work.

I’m sure Beijing has no interest in toppling our formal institutions.  Why would they when those institutions have rotted from the inside.  I guess he too wants us to believe that only a “few anti-Chinese professors” are at all bothered.

All of which brings us back to the opening line of Barry Soper’s op-ed

New Zealand is feeling the heat of the Chinese dragon’s breath and if we’re not careful it could incinerate us.

Which is simply nonsense.    As an economy, we have much more to worry about from a sharp Chinese economic slowdown –  which may be underway already –  than from any sorts of specific attempts at economic coercion of New Zealand.  The PRC is a big country, and in a world with few buffers a recession there could matter a lot everywhere.   As for New Zealand, the PRC certainly has some capacity to harm some specific sectors, perhaps even quite severely.  I wouldn’t want to be a university vice-chancellor if the PRC decides to attempt to bring the government to heel. Then again, I don’t have any sympathy with those people, who have put themselves at the mercy of a known thug, all backed by dodgy immigration provisions, rather than looking to manage their exposures (as prudent businesses, unable to twist governments to their purposes, would).  I have some more sympathy for tourism operators –  who mostly are operating in an open market.  As for commodity exporters, well they are selling commodities and (to a first approximation) what isn’t sold in the PRC will be sold somewhere else.   Sometimes values and interests cost – in many ways, the only true measure of what is valuable is the price one is willing to pay to defend it.  Too many of these Beijing defenders don’t seem to have any particular interest in defending our system, our people –  let alone standing against the sheer awfulness of the PRC regime at home and abroad.

We can’t fix the PRC gross human rights abuses.  I’m not even suggesting we should be at the forefront of moves on those issues. But when other countries speak and our governments don’t, they shame us.   Neither our Prime Minister nor our Opposition leader will utter a word about (for example) Xinjiang, or about the abducted Canadians, even when other countries have –  otherwise reprehensible Turkey only this week in a strong statement on Xinjiang. Life – politics –  has to be more than just deals and donations if it is to have any meaning, command any respect.   Frankly, it is hard to tell at present which side of politics is worse on this issue, but on balance I’d have to give it to National –  whose only interest in all of this, in anything they say in public, seems to be placating Beijing.  In office there are hard choices and calls to make –  even if that is still no excuse for not openly engaging on the “challenges and complexities”.  In Opposition one might have hoped, just occasionally, for a slightly more principled position. But I guess their actions, their people, their words reveal what their “principles” really are in this area.

 

 

Donations, the PRC etc

There was interesting Herald story a couple of weeks ago suggesting that the National Party may be beginning to feel some heat about their affiliations with, and excuses for, and funds flowing from, the People’s Republic of China (or people with close associations thereto).    The story drew on a speech given by National’s spokesman on electoral law, longserving MP Nick Smith,  to the Nelson Rotary Clubs.  In that speech Nick Smith argued as follows

4.2 Banning Foreign Donations

The second change I want to promote is a ban on foreign donations. This proposal was floated by former Attorney General and SIS Minister Chris Finlayson in his valedictory speech last month with him forcefully arguing that New Zealand’s democracy is ours and should not be open to manipulation by any foreign influence. This risk has been highlighted in recent overseas elections.

The existing electoral law does put limits on foreign donors, but needs strengthening. Only kiwi citizens and residents should be able to donate to political parties or to campaigns that seek to influence an election outcome.

Such a change would need to be done with finesse so as not to discourage political participation by new New Zealanders. The issue is not about ethnicity. It is about New Zealand not allowing its democracy to be inappropriately influenced by overseas interests.

It isn’t that I disagree with Nick Smith on this specific, just that in raising it (and not other issues around electoral donations) he seems to be avoiding –  probably consciously and deliberately – some of the real specific issues that are apparent in New Zealand.

The Herald article summarised the current law this way

Current electoral law prohibits non-citizens or residents from donating more than $1500 to political parties, but these can be avoided by donating through New Zealand-registered corporate entities – such as companies, incorporated societies and trusts – which are allowed to donate regardless of whether they are owned or controlled by New Zealanders.

and in a recent commentary, Simon Chapple, director of Victoria University’s Institute for Governance and Policy Studies observed

Currently in New Zealand foreign donations to a party of up to NZ$1,500 are permissible. Moreover, foreign donations below this amount are not individually or collectively disclosed.

It would be easy for a foreign state or corporate body seeking political influence to channel a large number of donations into the system just under the threshold via numerous proxies. Whether such interference has been happening is unclear, since New Zealanders do not know how much money currently comes in to political parties via foreign actors.

Even if foreign donations are not a problem now, one could rapidly develop. A strong argument can be made that foreign money has no place in democracy, including New Zealand’s.

New Zealand would not be going out on an international limb by banning foreign donations. Foreign donations to political parties are not permissible in the [United Kingdom, Ireland and the United States. They are also banned in Canada but unfortunately a significant loophole exists. Australia is currently in the process of banning foreign donations.

And I’d certainly agree with Simon on that general point: foreign money should have no place in funding election campaigns or political parties.

So there probably is a good case for a blanket prohibition on donations (in cash or in kind) to political parties by non-resident non-citizens.  But that looks mostly like pre-emptively closing a possible source of a problem (although perhaps real in the case of Phil Goff’s last mayoral campaign) –  and thus looking as though you care –  when the real actual issues New Zealand faces in this area would not be addressed at all.   For example, the largest single (acknowledged) donation to the National Party a couple of years ago was from a New Zealand registered company owned and controlled by a PRC billionaire.  That is foreign money in New Zealand politics, and shouldn’t be allowed.  It would be bad enough if it were from donors in countries that generally shared New Zealand values and democratic norms.   It is far worse when the donor is from the PRC – or, if you like, North Korea, Equatorial Guinea or other repressive authoritarian states –  and (according to the media coverage) clearly in the good graces of Xi Jinping.   Personally, I would probably favour banning all corporate donations to political parties –  people are citizens, companies aren’t –  but at very least we should apply the same restrictions to foreign-controlled companies that we apply to non-resident non-citizen individual donations.

But laws can take you only so far, and I’m not convinced they can deal with what appears to be the rather bigger issue around New Zealand political party financing (probably mainly National, although it seems likely that Labour now in government will be seeking to get in on the act).   That requires decency, integrity, and a willingness to make a sacrifice –  in this case, not to take money from people –  not even New Zealand citizens or residents – with close associations with, declared support for, political regimes with values so inimical to, and inconsistent with, those that have underpinned New Zealand democracy, and its fairly free and open society.

It seems to be widely understood that National Party Jian Yang is the party’s biggest single fundraiser.  Jian Yang, as is now widely known, served in PLA overseas intelligence system and was (perhaps is) a CCP member, who eventually acknowledged that he misrepresented his past to get residency and citizenship in New Zealand. In all his years in Parliament he has never once criticised the PRC –  not even over Tiananmen Square (perhaps there is an opportunity for him on the 30th anniversary in a few months time) – he is observed to be very close to the PRC Embassy, and even a former diplomat (now a lobbyist, so hardly someone deliberately trying to stir up trouble) declared that he was always very careful what he said in front of Jian Yang.    It is, to put it mildly, hard to be confident that he is primarily serving the interests of New Zealand and New Zealanders.

I’ve noted previously comments made last year by serious senior people at a Chatham House rules event I was invited to

There was clear unease, from people in a good position to know, about the role of large donations to political parties from ethnic minority populations –  often from cultures without the political tradition here (in theory, if not always observed in practice in recent decades) that donations are not about purchasing influence.  One person observed that we had very much the same issues Australia was grappling with (although our formal laws are tighter than the Australian ones).  Of ethnic Chinese donations in particular, the description “truckloads” was used, with a sense that the situation is almost “inherently unhealthy”.   With membership numbers in political parties dropping, and political campaigning getting no less expensive, this ethnic contribution (and associated influence seeking) issue led several participants to note that they had come round to favouring serious consideration of state funding of political parties.

These will probably (almost) all be donations made by New Zealand citizens or residents, and nothing in what Nick Smith (or Chris Finlayson) was saying would even touch on them.

And thus late last year, Yikun Zhang sprang to brief public prominence, when Jami-Lee Ross revealed the tape-recording of his discussion with Simon Bridges about the $100000 donation(s), and the possible bid by one of Yikun Zhang’s associates for a place on National’s list.   I’m not mostly concerned with the question of whether this donation (or set of donations) was appropriately disclosed –  although in general I think there is a strong case for a lower, and more binding, disclosure threshold, tying all material donations back to identifiable natural persons –  but about the affiliations and identifications of Yikun Zhang and his associates.  We learned at the time the story broke that Yikun Zhang – despite being a long-time New Zealand resident (and citizen) doesn’t speak English.  We learned a lot about his involvement –  at senior levels –  in various United Front bodies, and the strong ties he appears to have with CCP entities back in the PRC.  It is, to put it mildly, hard for a dispassionate observer to be confident that he primarily has at heart the interests of New Zealand and New Zealanders.   Given the nature of the regime he enthusiastically and repeatedly assoicates with, no decent political party should voluntarily have any but the most formal relations with such a person, and certainly shouldn’t be soliciting money from, or through them.  It isn’t what decent people, with any regard for the integrity of our system, do.

In fact, of course, not only do they take his money, but Phil Goff, Jian Yang, and former National MP Eric Roy got together to nominate Yikun Zhang for an honour, something bestowed last year by the current government.  In effect, it appears, for services to one of the more evil –  most evil, judged by the numbers it rules –  regimes on the planet.

And of course we know that not just MPs but party officials seem to fall over themselves to praise that same regime, and run interference whenever there is a suggestion of problems (think of Todd McClay running Beijing propaganda lines about “vocational training camps in Xinjiang).  Peter Goodfellow, the National Party president, seems to work very closely with Jian Yang to pander to the regime, and keep the local donation flow going.  And on the Labour side, Nigel Haworth seemed to be little better.

So by all means, take up the specific suggestion to ban completely foreign donations.  It would be a small improvement on the current situation, but it would not even begin to tackle the deep corruption of the our political system around the PRC regime.  People who were long-serving senior ministers – Nick Smith and Chris Finlayson –  know that very well, even if they are genuinely well-meaning on their specific proposal.

But attempting to fool the public otherwise seems to be a bit of new theme.  That Herald story where I first saw reference to Nick Smith’s speech included this gem

In a related move, Parliament’s justice select committee have issued a rare invitation to the country’s intelligence agencies to give a – likely closed-doors and secret – briefing to MPs about “foreign interference” in local elections.

Nick Smith, a member of the committee and his party’s spokesperson for electoral law reform, confirmed the committee as a whole late last year sent a letter to the New Zealand Security and Intelligence Service (NZSIS) and Government Communications and Security Bureau (GCSB) inviting them to give evidence.

Smith yesterday said he hoped the NZSIS and GCSB would be able to provide insight on the local risks posed by issues such as the hacking the public officials’ communications, foreign donations, and anonymous and politicised social media campaigns.

“There is the issue of funding, and whether foreign governments are either directly, or indirectly through shelf companies, are using funds to inappropriately influence outcomes,” he said.

Smith said the invitation to the NZSIS and GCSB offered evidence to be given in secret if required. He conceded this would be an unusual move for usually-open committee meetings, but was justified: “I think this is a really important issue,” he said.

So a committee chaired by Raymond Huo, he of various United Front bodies, he who chose a slogan of Xi Jinping’s for Labour Chinese-language compaign in 2017, with a senior National MP promoting only the narrowest reform (while providing cover for Jian Yang) will invite the intelligence agencies to provide advice on foreign influence issues, but in secret.   Perhaps –  but only perhaps, because the fact of this hearing might be used to simply play distraction – it is marginally better than nothing, but we don’t need intelligence agencies to tell us there is an issue around the PRC. Both main parties know what they are doing –  who they associate with, who they take money from, who they honour, who they seek closer relations with, and who they refuse ever to criticise, no matter how egregious the regime’s abuses.  All the minor parties keep quiet and go along too.

There was column this week on Newsroom by political scientist Bryce Edwards argues that it is “urgent” that we start having a proper debate in New Zealand about the PRC and the relationship with New Zealand.   I don’t really disagree with him, although he seems to want an “elite” debate, and seems scared by the idea that the public might have a (strong) view (an “overly simplistic one” apparently, like ideas of good and evil perhaps?).

Edwards writes

Obviously, we can’t rely on the politicians to lead that [debate] – they’re too compromised, and they’re just too inclined to suppress the discussion. Instead it has to be other parts of the public sphere – especially the media and other public figures – that needs to step up to examine and discuss the issues.

But it seems like wishful thinking.  Sure there is the occasional voice from the margins –  whether Edwards or Anne-Marie Brady – but there doesn’t seem any sign that anyone in “elite New Zealand”, anyone who commands serious respect, is about to break ranks from the “keep quiet, keep the deals and donations flowing” sickening consensus of the last few decades.  Not former leading politicians, not church leaders, not leading business figures, no one.  Even if a few people mutter quietly –  even Fran O’Sullivan had some recent encouraging comments about donations – no one seriously breaks ranks.   The taxpayer even funds bodies that condemn taking action on Huawei.  So who does Edwards seriously think might lead such a debate?

As he says, all politicians have all sold their souls.  I was exchanging notes earlier this week with someone about Jian Yang.  It is easy to blame John Key and Peter Goodfellow for Jian Yang –  they either knew his background or should have, and didn’t really care (or worse) either way.  But the story of Jian Yang has been public for almost 18 months now and no one in politics has disowned him, called for his resignation, called for the National Party to remove him from their caucus.  Not Jacinda Ardern or Andrew Little, certainly not Bill English or Simon Bridges, not James Shaw or Marama Davidson, not David Seymour, not even (despite occasional timorous hints) Winston Peters.  Not even Jami-Lee Ross, who was at the centre of the whole donations business.  Not a single backbencher, of any party, was willing to break ranks and declare the situation unacceptable.  Fixed with knowledge, by their silence they now share responsibility.

It is little different on any of the other aspects of the PRC relationships:

  • the effective PRC control of the local Chinese language media,
  • the refusal to say a word about the Xinjiang abuses (or Falun Gong or Christian churches),
  • the refusal to say anything in support of Canada over the abduction of two of its nationals.

Probably most of these so-called leaders like to think they are somehow serving New Zealand interests.  People fool themselves that way, sometimes without necessarily fully realisng what they are doing.  They aren’t.

So, much as Bryce Edwards might deplore the prospect of an “overly-simplistic” serious public debate, or swelling tide of discontent, I’d cheer on the fact that it was happening at all.  Corrupted systems are rarely, if ever, upended and reformed without a strong strand of –  almost unreasonable –  public outrage.  It hasn’t happened here yet.  I’d like to say it was only a matter of time, but I’m a pessimist.    What would turn things around now after all these years in which our “elites” have degraded our political system (to complement their failures on other fronts, notably productivity)?  Labour and National are, after all, two sides of same coin on such issues, and together they seem to have a stronger hold on the political system (vote share combined) than we’ve seen for some decades.   We don’t have politicians of decency and integrity, and the public show little sign of (effectively) demanding something different.  The PRC Embassy must be pleased.

 

UPDATe (4/2):   There is a new column by Simon Chapple and a co-author on reviewing the rules around political donations.  I’m pretty sympathetic to the sorts of changes they propose, although as I argue above the PRC-influence issues around donations or more about atttitudes and integrity –  knowing what is right and wrong and eschewing the latter –  than something formal external (eg statutory) rules can deal with.

 

Critics of the PM, left and right

I was going to write something short but serious, but then I noticed that Wellington economist (and economics blogger) Keith Johnson had been having another go at me.

I’ve never met Johnson but did rather admire his independent run for mayor of Wellington in 2016, campaigning (as much as anything) against the wildly uneconomic proposal for the ratepayers of Wellington to fund an extension to the runway at Wellington Airport.   From memory, in the STV system used in Wellington, I voted for him (well) ahead of the winner, Justin Lester –  who commits public money as if it is confetti (and whose council is apparently still trying to sort out a traffic management plan to fix leaking pipes in a dead-end street, now leaking for a whole month).   Quite possibly the only thing we have in common is living in the same suburb –  from the occasional photo posted on his blog I reckon I can see his house from where I’m typing.

Anyway, Johnson is clearly not a fan of yours truly.  There was a whole post a couple of years ago rather more sympathetic to Graeme Wheeler in the matter of the OCR leak (which I had alerted the Bank to, only to have Wheeler attack me in a press release).

There has never been any doubt that he comes from the left.   I don’t.     That said, I was very glad to see National ousted in 2017.  They’d done almost nothing in their nine years and, at very least it was time for a change.  No one would have been more pleased than I had the new government actually followed through on the campaign talk about lifting productivity growth and fixing the systematic dysfunction that is the housing market.   I even wrote a post at the time Jacinda Ardern became leader offering some specific suggestions.

Sadly, there has been so sign of anything serious.  Instead, there is a great deal of Prime Ministerial blather, interviews with foreign media, walking and talking with celebrities. But not much sign of real governing, in ways that might make a real difference to (at least) economic and housing outcomes.  And then there is the shameful silence on matters PRC –  I wonder if any of the media will ask her what she made of George Soros’s Davos speech –  he these days a doyen of the global centre-left –  calling on the West to take much more serious Xi Jinping’s threat to free societies.

So, yes, I don’t have much time for Jacinda Ardern.  As I suggested in a previous post, she might be well qualified to be Governor-General.  It is less clear that she is equipped to be Prime Minister.   They were her own words –  published in one of most esteemed serious newspapers in the world –  that I had a go at in my post the other day: lightweight, grossly misrepresenting history, and –  for all the rhetoric –  not offering anything of much substance that appears much different from what has gone before.

Which prompted Johnson’s first post.  He started with some (favourable) comments that economic historian Gary Hawke had apparently made about this blog.

Not that I am totally in awe of either Reddell or Hawke, both of whom are typical of the NZ Establishment – in my view at least being among the Tall Poppy Scything denizens that a young consultant colleague of mine once called a ‘bunch of arrogant bastards’.

I’ll take engagement with ideas and arguments over “awe” any day.

Apparently, I can’t really criticise the PM on productivity or housing

The first and most obvious objection to Reddell’s castigation of Ardern for perpetuating House Price Inflation and Failing to Address our Low Productivity is that He is Part of the System.

One might well ask then ‘What the hell did he do during his career to tackle the problems he identifies?’

That’s easy.  The Reserve Bank doesn’t do productivity or land use regulation.

He goes on

The second major objection of Reddell’s ‘analysis’ is that it is just plain rude.

You can reach your own view on that, but fortunately this is New Zealand not Thailand (lese-majeste and all that), and when you take the job of Prime Minister you should (she probably does) expect all manner of scrutiny.

And getting fully into his game we get this

Purporting to be an erudite independent-minded economic commentator, he nevertheless let slip his disdain of the so-called ‘left-liberal elites’ thereby placing himself firmly in the Alt-Right / Neo-Liberal camp.

Essentially he is arguing in favour of the plutocratic nationalism – in the form of the NZ National Party, the UK Conservative Party and the US Republican Party and Big Businesses Lobbies – and against the possibility of young people rediscovering hope in politics.

This Cassandra sounds to me like a jealous, covetous, exclusive bitch whose ears have been caressed by the Vipers of Malice.

Not sure how much overlap there is between the so-called Alt-Right and the so-called Neo-Liberal camps.  I don’t identify with either.   And, as I noted yesterday, I’m sure the National Party has never mistaken anything I’ve written here for support for them. (Republicans chose as their candidate a man totally unsuited by character and temperament to be President, and if they are more or less sound on abortion, have debuached the public finances and promoted interventionist foreign policies with which I have no truck.

And yet

Not that I disagree with everything that his says about the NZ Economy and its management. He is a smart fellow with whom it would be challenging to engage in a structured discussion on NZ economic policy.

And he is right to warn that rhetoric is no substitute for substance and that pretending to reinvent the wheel of Welfare Economics – while battening down Public Sector borrowing – simply raises expectations that cannot be reconciled or delivered.

I’ll take that.  It was a big part of my point.  There is – so far –  no “there” there amid all the talk of “kindness” and “wellbeing”.

But having, it appeared, largely conceded my substantive point, he presumably thought it necessary to finish with abuse

What I thoroughly disagree with him over is his misunderstanding of the difference between Policy Advocacy by a politician who openly declares her preferences and allegiances, and Policy Assassination by a biased, back-biting pseudo-academic with axes to grind and panties to bunch.

In this regard Mr Reddell should remember that the exercise of power without responsibility is the prerogative of the whore – not of the critic – panties bunched or off.

Never having had an ambition to be an academic, pseudo or otherwise, I’m not quite sure what he’s on about.  Where there is an important difference is between politicians who talk a good talk, and citizens who might reasonably ask for evidence of substance.

As for the weird conception that I wield “power” –  with or without responsibility……..

I came back to Johnson’s blog today to find two more posts.    One runs under the title “Croaking Cassandra: Making NZ A Country for Angry Old White Men” –  which is a bit odd really as, as far as I know, Johnson is white, and quite a bit older than me.   Personally, I’m keen on improving the country for young New Zealanders –  people like my kids who will soon face the prospect of unaffordable housing costs, in an economy heading towards upper middle income status.

The entire post consists of extracts from readers’ comments on my post on Ardern’s op-ed run together.    I’m not sure what the point is, although I have left a comment on the post to ask.  I’m bemused, but I thought some of you might be interested to find bits of your comments popping up somewhere else.

And then there was a third post headed “Jacinda Ardern: When Kindness May Not Be Enough”.   That sounded like music to my ears.

But before he got to his own substantive points, there was another go at me.

Apropos of my defence yesterday of our NZ Prime Minister Jacinda Ardern against the harridan drag artist blogger Croaking Cassandra,

“Harridan drag artist blogger”: well, that’s a new one.  Surely it must offend the sensitivities of some oppressed minority?   (But not me –  it just seems weird.)

But that was just a lead-in to an important observation from someone on the left

“I nevertheless feel the need to sound a note of caution on the gushing approbation that our girl is receiving in the world’s media from those of leftward tendencies.”

Hard to disagree, although personally I try to avoid describing adult women holding responsible accountable offices as “girls”.

He goes on to include lengthy extracts from an article on a local left-wing website, and cautions against paying too much attention to Helen Clark’s gushy promo for the Prime Minister  in Foreign Policy.   And then offers his editorial

“Of course, I massively endorse the sentiments behind Kinder Government –  as well as being more than ready to support Women Warriors against the Baddies who are often authoritarian. reactionary, and male.

But much of what is being said is Not New….

In fact, it may all be perceived by many as yet another illustration of what I have termed The Big Lie.

So Jacinda –  Go for It – But retain some humility.

Don’t get caught in your rhetoric and over-promise.

And kindly take account of the realities [including] you lead a front bench that is very short on real talent.

Hard to disagree really, although personally I don’t much care whether Prime Ministers are male or female. Performance is what should matter.  And we aren’t getting it.

But apparently never content to end with a rational mildly-sceptical take on his own sainted leader, Johnson feels the need to hit out again.  This is the final paragraph of that post:

Quite apart from that, you need to spend a bit more time covering your derriere. You can’t expect those accustomed to power who are authoritarian, reactionary, and male [i.e people like Croaking Cassandra Michael Reddell] to let you do your thing unmolested.  Believe me –  they are coming for your girl.

So  –  on his own terms –  his leader has a front bench without much talent, appears to be over-promising and underdelivering, and what she has to watch for is people like me.     It would be the voters I’d be more worried about if I were her.  New Zealanders seem to rather like their Prime Ministers being feted by overseas media and celebrities (whether Ardern or Key) but there will come a time when they are impatient for results.  Better results need better policy.  Johnson himself more or less makes that point.

And then I noticed a more-eminent commentator from the left, Chris Trotter, also had some new comments on the Prime Minister under the heading “The Jacinda Problem”.

It would seem that we misunderstood the Labour leader when she promised us a transformational government. Our naïve assumption was that she intended to transform New Zealand society when, clearly, it was herself she was determined to transform.

There will, of course, be a great many Kiwis who cannot get enough of their PM’s global celebrity status. Seated on the same stage as Sir David Attenborough. Discussing mental health with Prince William. What’s not to like? Jacinda is only going where Bono has so boldly gone before.

He goes on to make various policy points –  serious stuff not being done – where I might differ on specifics while endorsing general thrust, but this is his conclusion.

Jacinda is the most accomplished ambassador for New Zealand to have graced the global stage since David Lange bowled-over the Oxford Union. That is not, however, enough. Jacinda is not New Zealand’s MC, she’s our PM.

It’s time for her to start acting like one.

There is lots of rhetoric, lots of moving among the echo chamber of the like-minded overseas elites, but not much substance, all underpinned by even less robust analysis.

Keith Johnson can call me all the names he likes –  perhaps “harridan drag artist blogger” should now appear on the banner for the blog?  – but it doesn’t change the unease that thinking people from both left and right are beginning to feel.  Where’s the beef?

 

 

 

 

 

 

 

More empty rhetoric, bad history, and absent analysis

There was an op-ed in the Financial Times yesterday that had all the appearances of being written by a fluent sixth former who wasn’t that smart and certainly wasn’t that deep.  But I guess we have to take the FT’s word that the column was in fact written by New Zealand’s Prime Minister, Jacinda Ardern.  It read like several of her other efforts (eg here) if with a bit less feel-goodism than some, and a bit more of just making things up.

Since the column is behind a paywall, I won’t be copying chunks of it directly into this post, but even if you don’t have access I hope you get the gist.

She starts with the claim that New Zealand is “tiny”, apparently oblivious to the fact that in the United Nations list of countries and territories there are 100 with populations less than four million.  But that claim is really just staging for her opening (and closing) claim about the mouse that roared: “we punch above our weight”.  This is the sort of vapid (typically deluded) story that countries –  and perhaps especially countries’ ministers and officials –  like to tell themselves in private, but which quickly become rather embarrassing, a sign of insecurity and doubt more than anything, when uttered in public.

The only concrete evidence she adduces for this claim is 125 years old: New Zealand being the first country to grant women the right to vote, in 1893.  Good for us, but rather a lot of water has flowed under the bridge since then.  (And even from that era, I happened to be reading last week a biography of that courageous British campaigner Josephine Butler, who led the push for the repeal of the Contagious Diseases Act (in 1886) – this was, perhaps well-intentioned, legislation that grossly infringed the dignity and civil rights of women. Out of curiosity, I looked up the New Zealand experience: we finally repealed ours almost 25 years after the Brits.)

Almost every country has some “first” to its name, and some black spots from its past.   In our short history (whether you think of it as 200 years or 1000) New Zealand is no different.  The Prime Minister moves on to the claim that we were “one of the first” to put in place a “cradle-to-grave social welfare system that endures in some form to this day”.  Do note that “in some form”, as if the Prime Minister is trying to suggest that in decades since then the welfare system has been ripped to shreds, only the tattered remains enduring, when in fact we now have 300000 working age adults receiving welfare benefits and about 750000 getting universal New Zealand superannuation.  And today’s health and education spending (numbers, share of GDP or whatever) puts 1938 in the shade.

(And no mention, of course, of the fact that just a couple of years later, New Zealand was putting in place  some of the most restrictive provisions around press freedom and conscientious objection found anywhere in the free world during the war.  As I say, even the sainted Peter Fraser  –  from the Prime Minister’s own party –  has his blackspots.)

The Prime Minister moves on to claim that “we are sometimes the first to learn valuable lessons”.   This is an introduction to the sixth former’s account of the reform process of the 1980s and early 1990s.

Starting in 1984, New Zealand went further and faster than nearly any country in embracing the prevailing neo-liberal economic experiment. We slashed the top tax rate, dramatically cut public spending, removed regulations that were said to hamper business and vastly reduced welfare benefits paid to the sick, those caring for children and the unemployed.

It isn’t even clear where to start here.  There is no recognition that we’d been quite late to the party, have wrapped up our economy in heavy protection and distorting regulation for several decades –  more so again than most other democracies.  Many –  not all –  of our reforms were about catching-up again.   And yet she can’t even bring herself to acknowledge the costs and distortions (notice that “were said to be”).   Or to claim some credit –  for her own party –  for the overdue reductions in trade protection that the reformers put in place.   Or to note that as the top marginal tax rate was cut, so the tax base was broadened, and opportunities to avoid paying tax were substantially diminished.

Here is the evil low-tax regime that was created, as illustrated with OECD data on general government total receipts as a share of GDP going back to 1995 (which is about when the reform process ended, and also when the OECD has fairly complete data).

receipts

Over that quarter-century, we’ve basically been the median OECD country (literally so in in several years this decade).   The comparable spending chart isn’t so very different (although we spend less than most relative to tax receipts –  another way of saying we’ve avoided deficits and kept debt low), although the one period in the last 25 years in which government spending looks quite low by international standards is……the first half of the term of the previous Labour government.

But even now the Prime Minister is just warming up because her theme appears to be inequality.  Never mind that the labour share of GDP hasn’t changed much in 30 years now, or that wage growth has been running ahead of growth in GDP per hour worked.   Never mind the indications that inequality measures haven’t changed much here for 25 years, or that much of any concerning developments seem to relate to the spiralling costs of housing –  a development only made possible by restrictions imposed and maintained by successive National and Labour governments.  No, it is all the liberalising economic reforms that are “to blame”.

And all this while, oddly (but as she did during the election campaign), appearing to accept that narrative that somehow our economic performance has been just fine.  But, of course, there are no mentions of our shockingly poor long-term productivity growth performance (past and present), no recognition that New Zealand export and import performance has been disappointing, no nothing.  Far from “punching above our weight”, it is hard to conceive how a country which had built what it had in, say, 1913 could have done so badly in the subsequent 100 years –  without even the excuse of the physical devastation of war, military coups, or Communism.

Of course, none of this seems to be based on any analysis or research.  Instead, the Prime Minister tells us of her childhood memories, in which kids in the town she was living in “weren’t born into a decade of hope and opportunity, but one of inequality where users had to pay for basic services”.  Perhaps she means they had to pay for food and electricity, but then users have always had to pay for those?  As for schools and hospitals, they were –  and are – more or less free, and we’ve never the British system of generalised free GP visits.  So what on earth is she talking about?

And then the violins start up to accompany a mournful tale of the death of democracy and of prosperity from which she, and the New Zealand way, can save us.

We don’t need to start again, but we do need to change the way we do things. In May, my government will present the world’s first “wellbeing budget”.

All, apparently, premised on the weird, tendentious (and borderline dishonest) claim that any government anywhere –  especially in the free world –  has ever defined success solely in terms of GDP.   Perhaps she could pause a moment in her progress among the left-liberal elites to give us some evidence for that claim?   Have governments not been spending on education, on health, on defence, on age pensions, even on arts and the culture for generations now?  Not just in New Zealand but around the advanced world.   Have not cost-benefit analyses –  that don’t just cover GDP effects –  been part of spending evaluation for decades?

And thus the great mystery of the much-vaunted “wellbeing budget”?  Is anything going to be any different from what we might we might expect from a left-wing coalition government anywhere that happened to be running budget surpluses.   In her column, the Prime Minister talks of spending more on mental health, especially for young people.  You might think that is sensible (I suspect that, even if some of the spending is worthwhile, it is going to be mostly papering over cracks, while refusing to address the social and cultural issues that underlie the problems we observe) but it is what left-wing governments typically do –  they throw more money at things.   Perhaps it is even what the voters want –  after all, globally, government spending as a share of GDP is typically higher than it was 50 years ago –  but don’t try to pretend that it is a whole different approach to life, economic management or government management.  One only has to look at the wellbeing dashboard to see a grab-bag of vapidity, rather than a serious approach to better policy.  It is, among other things, a cover for the utter failure to even begin to grapple with the repeated failure on productivity.

(And, of course, while on the subject of increased spending, there is the oddity that people from the left and right point to: she proposes to change the world, laments how public spending was slashed, but her government published plans just before Christmas that involve

On the government’s own numbers (and these are pure choices, made by ministers), core Crown spending in the coming five fiscal years (including 2018/19) will be lower every single year than the average in each of the three previous governments, two of which were led by National.  

She goes on to claim that “this isn’t woolly but a well-rounded economic approach”.  Perhaps around the Cabinet table and even among some of her Treasury acolytes they even believe this nonsense. In fact, it is no economic approach at all, consistent with a government that has done nothing –  seems to plan nothing –  to reverse the decades of relative economic decline, that have so badly limited the possibilities for New Zealanders (reflected, inter alia, in the decades-long exodus of New Zealanders).   Weirdly, she claims that this “well-rounded economic approach” is same one she plans to use to respond to (inter alia) climate change, domestic violence, and housing.   This in a week when the latest Demographia report again reminds us just dreadfully unaffordable housing is in New Zealand –  and when her surrogate senior minister could go through an interview on the subject on Morning Report yesterday and not even (that I heard) mention land liberalisation.

Warming to her theme, the Prime Minister calls on those around the world to look to her “wellbeing approach” could be a “model” for others to respond to the problems of the world.  She asserts

I wholeheartedly believe that more compassionate domestic policies are a compelling alternative to the false promise of protectionism and isolation.

Spending more is apparently the answer….but (on her own rules) not more than 30 per cent of GDP.   Nothing at all, of course, about lifting productivity growth.  Nothing about fixing the huge regulatory distortions that render housing so unaffordable in many countries, notably her own.  Just more compassion.  More kindness.

As I observed of one of her earlier vapid efforts

We don’t want political leaders who can’t identify with individual need, opportunity and so on.  And yet, when one is dealing with five million people –  and government policy choices affecting many or all of them  –  you need to be able to stand back and think about things differently, to analyse issues systematically, to recognise (for good and ill) the force or incentives, to think about the longer-term as well as the short term, and so on.   And even to recognise that values and interests can, and often will, be in conflict –  in many areas hers aren’t Family First’s or the oil and gas industry’s  (or mine for that matter).  Politics is partly about navigating those differences, seeking reconciliation where possible, but also about making hard choices and trade-offs.

There is no sign that she brings any of those skills to the job.  Just a smile and lots of breezy vapid blather.

The Prime Minister ends her column with another deluded call, suggesting that she hopes New Zealand can once again “punch above our weight” by “forging a new economic system based on this powerful concept [guardianship]”.   Which might perhaps be fine if there were any substance to what she is talking about, but there is no sign of any.  She wants to spend a bit more (but not much), she wants to eliminate net carbon emissions in an country with seriously high abatement costs which her own government’s consultative paper data suggest will fall most heavily on the poorest, and she does nothing at all to fixing the disgrace that is New Zealand housing affordability, or to even think about reversing decades of relative decline.   Perhaps it all sounds good to a few readers –  and Davos attendees –  but it offers nothing of substance to New Zealanders, let alone to the world.