China’s Economic Imperialism

 …. He’s not afraid of confrontation. Xi  (President Xi Jinping) is China. Chinese citizens are more nationalistic and triumphant than ever before. In this sense Xi represents the people. Dr Shi Yinghong, International Relations Professor at Beijing’s Renmin University

A power to be reckoned with

By Roger Childs

President Xi
President Xi

China has long regarded itself at the centre of the world and was called the “middle kingdom”.

Its history dates back thousands of years, and over that time the empire has experienced periods of nationalist ascendancy when it expanded its borders, and of internal disorder when it was vulnerable to invasion.

In the early 21st century, the repressive Communist dictatorship, is in an expansionist phase and now possesses wealth unprecedented in its history.

However, in today’s world the  taking over of near-by territories it not as easy as it was in the past, so the emphasis is currently on economic imperialism.

china-tipEyes on the South Pacific

One of its target areas is the South Pacific. China already controls over 70% of Tonga’s economy and has made major inroads into Fiji.

In recent years, the  government, through companies linked to the state, has been moving in on New Zealand’s resource base and assets. The so called Free Trade Agreement negotiated by the Clark  government and endorsed by the subsequent National administration, has helped facilitate this process.

Concerns about China’s exploitation of the Free Trade Agreement are the spelled out in impressive detail in Ron Asher’s thought provoking book, published in November 2016: In the Jaws Of the Dragon: How China is taking over New Zealand.

The trade agreement: free for China, restricted for New Zealand

We were the first western country to sign a free trade deal with China and it is easy to see why other countries, like Canada, have not followed suit.

Readers will be familiar with the buying up of the Crafar farms by Shanghai Pengxin, a company with no experience in dairying.  It has subsequently gained a controlling interest in thirteen other dairy farms and so has a significant share holding in Fonterra.

This is the tip of the iceberg, as the Chinese companies, allied to their government, have taken over scores of New Zealand businesses, vineyards and forestry blocks. This incremental and rapid expansion into our economy has been approved by the Overseas Investment Office.

Fisher and Paykel is now Chinese owned as it Wilson Parking, Silver Fern Farms and 2 Degrees. Vector Energy is also under Chinese control and its electricity network includes power supply to the capital.

Kapiti Aquatic Centre: largely built by a Chinese owned Mainzeal
Kapiti Aquatic Centre: largely built by a Chinese owned Mainzeal

Kapiti readers will be familiar with construction company Mainzeal, going bust when building the Aquatic Centre. At the time, the once highly-respected property and construction company, was owned by Chinese interests.

But isn’t the Chinese investment in our economy good for local businesses? Not when China  uses vertical integration and controls the various steps in the economic process, such as with milk products from farms in New Zealand to the markets back home.

Asher also gives the tourism example.

They fly to New Zealand on China Southern Airlines, stay in Chinese owned hotels, travel around the country in Chinese coaches, eat in Chinese restaurants and are ushered into souvenir shops that are owned and manned by Chinese people, whose stock is often: Made in China”!

However, while China’s ability to buy up large in New Zealand is encouraged by our government, Kiwi interests cannot buy land, forests, infrastructure and companies in China.

Should we be worried?

In the early chapters of the book, Ron Asher  looks at the recent history of China, the rapid expansion of its economy and the on-going massive build up in its armed forces.

He also touches on the government’s encroachment into the South China Sea where it has antagonised the Philippines and Vietnam over territorial claims. Then he covers what’s happening in New Zealand.

He outlines in detail on how

  • we continue to buy Chinese products of varying quality which are cheap because of the country’s use of poorly paid workers and, in some cases, prison labour
  • we make stupid decisions to buy from China when we could obtain better quality products from within NZ or overseas, eg dud locomotives which put Dunedin specialists out of work, and sub-standard steel
  • we allow the Chinese to set up propaganda Confucius Centres in schools and universities
  • we have used the Chinese giant telecommunications company Huawei for the broadband rollout and other ventures, when the Australians and Americans will not use the business because of security concerns
  • we have approved the purchase by Chinese of at least 16 forest blocks so far.

A thoroughly researched exposé

jaws-of-the-dragon‘In the Jaws Of the Dragon: How China is taking over New Zealand ‘is a book New Zealanders should read, and think seriously about the implications of what is outlines.  

This is not a racist polemic, and Ron Asher acknowledges the huge contribution Chinese-New Zealanders have made to the development of our country. Many of these people are the descendants of gold miners, market gardeners and traders who migrated to New Zealand in the late 19th and early 20th centuries.

This is a well researched volume which is heavily footnoted and quotes from scores of sources including newspapers, politicians, academics and economists from China, New Zealand, America, Canada, Britain, Australia, Malaysia and elsewhere.

Respected experts quoted range from Christopher Patten, former Governor of Hong Kong, to Kiwi economist Rod Oram.

The question might be asked Don’t we need the free trade agreement to get easy access to  the largest market in the world?

Asher says ‘No’– New Zealand businesses have to be registered to export to China; Chinese owned companies are doing a lot of the exporting of ‘New Zealand’ products, and other countries like Canada still trade with China without a formal agreement.

Meanwhile we are neglecting large markets elsewhere in Asia.

(The book is on sale at Whitcoulls stores and at some Paper Plus stores (including Coastlands and North City, Porirua). The retail price is $35.

Alternatively it can be purchased direct from the publisher, Tross Publishing, P.O. Box 22 143, Khandallah, Wellington 6441. It can be ordered from the website www.trosspublishing.co.nz  If ordered direct from the publisher, the price of $35 includes postage within New Zealand.)