Friday, February 14, 2020

Mike Hosking: Is coronavirus exposing NZ's over reliance on China?

The obligatory commentary has already started on whether we should continue to be doing business, or the amount of business, we do with China.

The racism is already well entrenched all over the world as Asian restaurants empty out.
It's a funny thing isn't it? For the most part we celebrate our globalness, our connectedness, the fact we are all a village, until it doesn’t suit us or it momentarily appears to get a bit awkward.

The chances of you ordering a dumpling soup and getting coronavirus is, of course, a lot less than it is you getting run over by a car or bus on the way home. But logic it, would appear, has been suspended.

There are the real impacts of the disease. Tourism is taking a major hit, not just here, but everywhere that opens doors to Asian travel. With borders closed or restricted, airlines rerouting and stopping services, movement becomes a hassle, and as a result trade drops.
There is some thought the Australian skier might make up for the absent Chinese tourist. But the cold, hard reality is when you have your biggest trading partner in trouble, you are in trouble too. Which is ironically, in a way at least, why we have seen the rise of the protectionist approach in places like Russia and America.

Countries who isolate themselves, whether politically or economically, or both, are in the ascendancy. Parts of Europe are very far right, regional elections just last week in Germany saw the rise of yet another far right party.

Yes, America still trades with China, and the whole world still trades with China. But America has a solid domestic production base that's on fire, we don’t. Trump touts their self reliance on oil these days, we can't.

To a greater or lesser degree we have become, perhaps dangerously, reliant on china and the belief it'll grow forever. 28 billion dollars of trade, and up until now we can't get enough.
Which is kind of ironic because one of the increasingly intense arguments held in the Pacific these past two years is whether the small island nations have become beholden to China themselves.

Have the soft loans and kind gifts come with just a little too much quid pro quo? Are the islands too beholden to China? Does America have a decent point when they try and reassert some sort of interest, or authority, in this part of the world?

Isn't it funny when Winston Peters travelled to Washington to tell them all about the things they should be worried about, like China in the Pacific. He was so worried he tossed a billion of our dollars at the problem. Remember that? It was about his first foreign policy move after getting to government. He has shuttled back and forth, island to island, trying to reconnect and sell the longevity of good old New Zealand.

And yet here we are, the preachers getting a lesson in being potentially overexposed to a single country and economy. Australia, under Scott Morrison, has argued the same line, yet he too is in a world of trouble because of China.

Yes, we are all in this together. That's the modern global story for countries like us. But as in all unequal relationships the fallout is never equally shared.

Mike Hosking is a political broadcaster on Newstalk ZB, who has hosted his number one breakfast show since 2008 - see HERE.

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