Australasia and Asia
August 29th, 2009 at 11:19 am by David FarrarAn insightful column by Fran:
But with China poised to overtake the United States within a decade as the world’s largest economy, it is no surprise that the implications of China’s rapid economic rise were given considerable focus during New Zealand and Australia’s first joint Cabinet meeting in Sydney eight days ago.
Herald inquiries indicate Rudd went to considerable lengths to outline why the two Australasian countries should move closer together at a strategic level through maintaining “close foreign policy settings” during a lengthy overview he gave as co-chair of the joint Cabinet.
The issue barely rated a mention in the two prime minister’s joint press statements. But Herald inquiries indicate that Rudd strongly positioned the impact of China’s rise on Australasia during a lengthy strategic overview.
Several Cabinet Ministers from both sides privately credit the “risks based” analysis – above all other factors – as paramount in the Rudd Government’s decision to focus on New Zealand’s strategic utility to Australia, by moving to finalise single economic market negotiations by 2015. And to increase military co-operation to protect (if needed) supply lines between Australasia and the region during possible fractious times ahead.
This would explain why Australia has gone from luke warm to highly receptive on the move to a single economic market.
For most of our existence our location has been a barrier economically. In the next century, we may find being so close to Asia is a life saver. The US economy, and to a lesser degree the EU, could struggle to match Asian economic power in a few years.
Under this scenario, Australia – as a country with “middle power” pretensions – will increase its regional impact by drawing New Zealand further within its own strategic sphere of influence.
This is where NZ needs to be a bit careful. While I am fully supportive of closer economic ties with Australia, we must not lose our identity. NZ is generally held in higher esteem than Australia with most Asian countries – partly because we are non-threatening, but also because we have never been seen as the US Deputy Sheriff.
Rudd – who thinks deeply about strategic issues – believes that unlike previous downturns, Australia and New Zealand cannot rely on American consumers to quickly refuel global economic growth through another debt-fuelled spending binge. Both New Zealand and Australia thus needed to focus on how to sustain their respective economies.
Both prime ministers share the belief that it is in the countries’ interests to strongly brand Australasia as an investment destination focused on quality products and lifestyles, and, are concerned at the upcoming “war for talent” implied by changing demographics.
Key, in particular, sees a future where both nations will have to pay “near global price” to attract and retain highly-skilled people such as doctors, lawyers and engineers.
By drawing closer together the two “Europeans in Asia” will be able to more strongly position themselves as the Asian century develops.
This makes us closing the gap with Australia even more important. You want to keep doctors, lawyers and engineers? Well maybe then allowing mining on 0.0001% of the conservation estate is not the end of the world.
August 29th, 2009 at 11:28 am
Well maybe then allowing mining on 0.0001% of the conservation estate is not the end of the world.
Of course its not the end of the world. Its also not economically viable, unless you want the record for the world’s smallest mine.
Some people should never be let near a number.
Vote:August 29th, 2009 at 11:58 am
0.0001% is around 200 metres by 200 metres. Probably not quite enough but if you feel so strongly about it I might concede 0.001% of the conservation estate. So one one hundred thousandth instead of one millionth. Oh woe the world is ending.
Vote:August 29th, 2009 at 12:13 pm
Don’t have a cow, man.
Elsewhere you whinge about a supposedly misleading headline, and yet here, you blatantly misrepresent the issue. One could even say you lied.
Facts may not be important to you, but I prefer facts to party line spin any day.
[DPF: I doubt anyone thinks there is a big difference between 0.001% and 0.0001% in terms of the point I was making. Apart from you that is.]
Vote:August 29th, 2009 at 12:16 pm
“You want to keep doctors, lawyers and engineers?”
That’s funny. On two levels. One in the implication that lawyers are somehow as necessary as doctors and engineers, and two, that people in those two really important categories actually exist here. (anyone who has had anything to do with the Health system knows it is dominated by third world imports).
The time for the adjustments that needed to be made are long past. Free America or Communist China as a trading partner- no matter which, NZ is headed for third world status at a headlong rate.
The simple message that everyone seems so intent on ignoring is that a small country like NZ cannot afford a massive welfare state, or the massive government apparatus needed to support that state. NZ cannot survive by cultivating dependency when it needs to encourage independence. The commercial cost of this stupidity will inevitably cripple our economy.
Nothing will change until we bottom out.
The self interest of politicians and the ball and chain of the welfare vote will ensure that.
Vote:August 29th, 2009 at 12:25 pm
“One could even say you lied.”
Well cowardly false allegations of lying are always your speciality.
He didn’t lie. NZ sovereign borders (Exclusive Economic Zone) extend 200 nautical miles from the centre line of the country and these areas are Conservation Zones, and therefore the area represented by Mr. Farrar is ample for a mine.
Vote:August 29th, 2009 at 12:46 pm
He lies, now you lie to back him up
Vote:August 29th, 2009 at 12:49 pm
THe problem lies with Asia.
THe trading bloc in the Pacific rim does indeed look comforting as David points out.
So far, only communist nations show interest in us.
Winston Peters was even allowed access to Nth Korea.
The rest of Asia internalises itself. They simply turn to each other and don’t need us.
Anyone know our trading stats with Japan. We’ve never shown any interest in them ( I can only surmise because they’re not communist) and we’ve been cheated greatly.
Vote:August 29th, 2009 at 1:59 pm
It makes sense to increase trade with Asia, but the hacks’ jabbering on about how we will benefit from being close to Asia is over the top.
A Japanese acquaintance tells me Tokyo is closer to London than it is to Auckland. This is as the crow flies, over the polar route, which is the way jets go. It turns out that Beijing is much closer to Paris than it is to Auckland: Here are distances from Beijing — Paris 8270km, Los Angeles 10,083km, Auckland 10,388 km.
O’Sullivan’s talk of NZ and Australia being “the two European nations in Asia” from a geographical point of view is dubious. Why doesn’t she include Russia, which borders China? Australia borders southern Indonesia, which is generally classified as being part of Asia, but Russia borders China, Japan, and several central Asian countries, and Alaska is quite close to northern Japan.
Perhaps this is a hangover from the scare NZ and Australia got when Japan swept down through the Pacific during World War 2. We ought to remember that the Japanese needed long-range aircraft carriers and supporting fleets to do it, and when the American dive bombers turned them into flaming wrecks the threat was all over bar the bloody clean-up of marooned, half-starved Japanese soldiers. They were a long way from home.
As for the warnings the illiterati trumpet that China is moving to become the biggest economy in the world…
China was the biggest economy in the world from the beginning until around early in the 18th century. China is just bouncing back to the top of the table. What does this mean beyond that is is the nation with the most people? Very little.
It certainly didn’t deter Genghis Khan and his economically poverty-ridden horsemen taking over China, nor did it deter the Mongolians’ cousins, the Manchu, from doing the same.
I don’t see that China’s return to being biggest economy in the world necessarily entails any sort of physical or expansionary threat to NZ or Australia.
China offers NZ excellent opportunities for increased trade, but so do India, and Brazil, and Russia. We need to learn from past problems of having too many of our trade eggs in one basket.
Vote:August 29th, 2009 at 2:27 pm
Jack5, very relevant, very good. Especially the bit about eggs and baskets.
Vote:August 29th, 2009 at 3:12 pm
Rudd – who thinks deeply about strategic issues – believes that unlike previous downturns, Australia and New Zealand cannot rely on American consumers to quickly refuel global economic growth through another debt-fuelled spending binge. Both New Zealand and Australia thus needed to focus on how to sustain their respective economies.
Both prime ministers share the belief that it is in the countries’ interests to strongly brand Australasia as an investment destination focused on quality products and lifestyles, and, are concerned at the upcoming “war for talent” implied by changing demographics.
Key, in particular, sees a future where both nations will have to pay “near global price” to attract and retain highly-skilled people such as doctors, lawyers and engineers.
Australia has a Prime Minister who is a) an experienced diplomat and b) a Mandarin speaker. New Zealand has a Prime Minister with a bacground as a gambler. Which country is better served by its leadership?
Vote:August 29th, 2009 at 3:25 pm
“Australia has a Prime Minister who is a) an experienced diplomat and b) a Mandarin speaker.”
1) OPPOSITION Leader Kevin Rudd says he’s never claimed to be “Captain Perfect”, and his decision to visit a New York strip club is the kind of mistake blokes make. It was revealed yesterday that Mr Rudd visited Scores gentlemen’s club in Manhattan in 2003 with fellow Labor MP Warren Snowdon and New York Post editor Col Allan during a taxpayer-funded trip when he was opposition foreign affairs spokesman.
2) Four months after he was elected Australia’s Prime Minister, Kevin Rudd’s halo has slipped, amid allegations he and his ministers accepted free travel from a Chinese businessman while in opposition. Ian Tang, whose company paid for 16 overseas trips by Mr Rudd and other Labor politicians, has links with a gambling magnate, Stanley Ho, who ran casinos in Macau, now part of China, for more than 30 years.
Vote:August 29th, 2009 at 3:59 pm
1) Oh, gee whiz, Rudd is human and has human failings. OMG why didn’t the MSM have this everywhere? How horrid. Won’t somebody think of the children?
2) Oh gee whiz, a business man paid for trips for his friends, what’s the world coming to? Someone call FOX and have this stopped. where are the shareholders? ANd didn’t you not the word “allegations”? Comprehension never was your strong point.
Anyway, your point 2 neatly aligns with the answe to my Q’s above. Rudd may speak the language of the Emperors, but as Ian Tang proves, the Chinese love a gamble.
Vote:August 29th, 2009 at 4:31 pm
Yawn, what petty and irrelevant flamebait. The NZ election was held between Clark and Key, not Rudd and Key. Clark was shown to have all the business acumen of a tube of toothpaste over the buyback of rail at 3x the value when she actually had the leverage (arguable non-fulfillment of contract). Her diplomatic skills were somewhat questionable in that she managed to alienate australia.
I will however say that Key and Rudd seem to come up with very similar policies in the main, and I think it speaks volumes that the Aussie leftwing party is roughly equal to the NZ right wing party.
Vote:August 29th, 2009 at 4:57 pm
National mines the national parks & my money is they lose the next election. Personally I can’t see it, why mine a small area to risk 100% pure NZ tourism & absolutely why mine a large area to blow it apart, the real gold is in oil in the Southern Basin anyways.
In the end who’ll win, NZ’s tourism minister or Brownlie.
It’s good news on Aussie/NZ, the asia trading belt is set to be massive & I suspect they will be looking for internal trade over external in the future ( asia region vs trade to US/Europe ) to maintain growth & stability.
Vote:August 29th, 2009 at 6:16 pm
of course..joining with australia wd solve our closing-the-wage-gap with australia..problem..
we wd come under their labour/employment rates/wages..
maybe that’s what key is trying to do..?
phil(whoar.co.nz)
Vote:August 29th, 2009 at 7:39 pm
I can’t believe how the comments slid away from the really big issues of the blog into the points scoring gutter.
Thanks at least to Jack5 for something worthwhile.
That the debate has got some airing is significant, along with currency, reserve banks, increased military integration. these are significant matters to have on the table at the same time.
The timings are too far out. get on with them now, not in 2015.
Vote:August 29th, 2009 at 8:14 pm
Two things about the Chinese. They eat just about anything that can be called edible and everything they eat is an aphrodisiac.
Vote:(and there is a reason for that effect.).
So all we have to do is convince them to pay good money for all the food we produce and we won’t keep up.
Anyone able to atest to the fact that milk ,fruit, beef, lamb and so on are aphrodisiacs?
August 29th, 2009 at 8:25 pm
Australia has a Prime Minister who is a) an experienced diplomat, b) a Mandarin speaker and c) a Chinese agent.
FTFY, bonkers.
Vote:August 30th, 2009 at 4:59 am
When do we sign up for the single currency then?
Vote:August 31st, 2009 at 12:27 am
I’d take issue with Fran’s first line, as it perpetuates as popular lefty myth about how China is the ‘next superpower’.
In 2008 the World Bank put the USA’s GDP at $14,264,600 million, China’s GDP was $4,401,604 million Assuming China manages to maintain 9% growth pa in ten years their GDP could be worth $8,770,488 million (I’m no maths expert so comeone pull me up if I have calculated this wrongly) Even if the USA economy didn’t grow at all, it would still be almost twice as big as the Chinese economy.
This rather makes the rest of the article a bit silly, it’s still the USA we need to be working to improve relations with, and sure China is important, but it’s a very very long way from becoming the top dog.
There a common misconception that goes unchallenged that because the Chinese economy is the 3rd biggest in the world (excluding the European Union) that it’s snapping at the heels of the US economy. The actual figures themselves don’t show that at all. Although the incorrect asertion suits people here who have a strangely hostile view to the USA (democratic) but a stary eyed view of China (dictatorship).
Vote:August 31st, 2009 at 2:21 am
comsumist, i get a different value for china GDP in ten years under those assumptions, but it doesn’t qualitatively change what you are saying. I could quite possibly be mistaken on some jargon grounds, but I would have thought that the 9% growth must compound on any previous year’s growth ie for 9% growth:
GDP(1)=GDP(0)*1.09
GDP(2)=GDP(1)*1.09=GDP(0)*1.09^2
…
GDP(N)=GDP(N-1)*1.09=GDP(0)*1.09^N
Doing that I get ~$10.4 trillion rather than ~$8.8
Still smaller than US under the incredibly conservative assumption it doesn’t grow at all, so your point is still valid.
Vote:August 31st, 2009 at 9:50 am
How can we retain our professionals when we hold skills and qualifications in such low esteem?
Vote:If your are a creative lawyer, engineer, doctor, architect or scientist who earns and 6 figure salary (but probably about 1/2 of what you would in Australia) in NZ, you’re branded and over-charging, elitist, property class money grubber for your efforts. Even our judges who are at the pinnacle of their profession are lambasted for being overpaid.
If you work for local or central government and you have unique skills it is even worse- have you ever heard Rodney Hide talk about retaining our top public sector talent or keeping their wages competitive. If the the super city is to employ less staff, surely we can spend a bit more to retain some of the more qualified staff- before they head over the ditch.
Or are we happy with mediocrity
August 31st, 2009 at 5:21 pm
Thanks Paradigm, maths never one of my strong subjects.
It’s fascinating how ‘even’ people like Fran who should know better use this so-called fact without taking a step back and thinking about it. It’s a great example of a simple but shallow statement “China is the 3rd biggest economy in the world” being connected with it’s huge growth, the US’s stagnation, and then out the end pop’s “China is going to be bigger than the USA in 10 years”. An incorrect assumption drawn from not looking at the facts carefully and using statistics incorrectly and drawing the wrong conclusion from them. Though I doubt Fran even checked the figures, she has just repeated a bit of folk lore as if it were fact… merely repeating an inaccurate assumption over and over doesn’t make it a fact.
It’s worth noting that on those figures Chinas GDP won’t even end up being bigger than Japan in 10 years, assuming the current growth rates.
It’s worrying that our opinions of how our relationships with both China and the USA are often formed around inaccurate assumptions about how important their economies will be. The USA and EU should still be our primary focus as they are, and will be for many years to come, the biggest economies in the world, and they are ones that broadly share our values.
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