For more on this issue, see; New Zealand PM Luxon Labelled as Weak and Cowardly After Delaying Decision on Palestine.

*******

The New Zealand Cabinet will today consider whether to formally recognise Palestine as a state – and Palestinian rights advocacy group Palestinian Solidarity Network Aotearoa (PSNA) urges the Government to listen to the views of a vast majority of New Zealanders.

The PSNA anticipates Foreign Minister, Winston Peters, will get instructions from Cabinet on Monday to increase pressure on Israel.

The United Nations General Assembly High Level Leaders Debate starts in New York next Tuesday.

PSNA Co-Chair, John Minto says the government has to have listened to the voice of the people who marched for sanctions against Israel, in Auckland (on Saturday September 13).

“With only limited time to organize, and disruption caused by having to change from the route over the Harbour Bridge at the last moment, 25,000 turned out to object to the government’s passive, and effectively pro-Israel, policies,” John Minto said.

“It’s a turn-out that’s been building, now rapidly, in our protests around the country over the past two years.

“New Zealanders are nearly two to one in favour of sanctions against Israel. Support for accountabilities will have increased significantly since then as Israel’s depravity and cruelty has shown no bounds.”

Minto says foreign minister Peters will be attending potentially one of the most important debates in United Nations history next week.

“The General Assembly has already begun, and on Friday, New Zealand voted along with 141 other countries, for a state of Palestine to be created through Israeli withdrawal from the Occupied Palestinian Territory,” John Minto said. “There were only ten votes against, predictably the US and Israel, but a concerning five Pasifika states voted against Palestine as well.”

According to Minto Israel has already made it clear that it has no intention to permit a Palestinian state to emerge, “nor compromise its apartheid system, by allowing equal democratic rights to Palestinians who live under its control and inside its present borders.”

Minto said in announcing its position on Palestine, the government will be sensitive to its reputation in Arab countries.

“Israel has just bombed Qatar, to kill off the prospect of a Hamas agreement on hostage releases.  Qatar is a member of the Gulf Cooperation Council, which is led by Saudi Arabia.

“Peters’ cabinet colleague, Todd McClay is in Saudi Arabia this week to talk trade.  McClay will not be wanting to explain to the Saudis, face to face, why Peters was in New York at the same time telling the world about Israel’s so called right to defend itself.”

Australia, Canada, France, United Kingdom and other nations have already demanded a ceasefire to hostilities in Palestine’s occupied territories and for Israel to cease the apparent genocide being committed in Gaza.

Minto said: “So far, the UN emphasis has been on two-state outcomes, and how to get rid of Hamas. But the world debate is moving strongly to sanctions.

“Now is the time to move past idle rhetoric, and deliver sanctions, which are the only persuasion Israel will concede to,” John Minto said.

The most important measure of the favourability or otherwise of the international economic environment is called a country’s ‘Terms of Trade’. This label essentially means ‘barter price’, reflecting that international trade is essentially one country’s barter with the rest of the world.

(Digression. We note that such ‘barter’ is rarely the simultaneous barter with which we usually associate that word; whereby in a single mutual exchange, swaps of agreed equal value are made. So, for any given country in any given year, the barter is rarely a swap of equal value between domestic [our] and foreign [their] goods. If, in any given year, a country receives [by agreed value] more goods and services than it gives up – ie imports more than it exports – then that country is either incurring a debt to the rest of the world, or spending a credit. This process of incurring debts and spending credits – or, from the other side of the ledger, of incurring credits and settling debts – is known as ‘intertemporal trade’; ie as trade over time. Trade between one country and the rest of the world is expected to balance in the long run, at least in theory; however, see my International Trade over time: gifts with strings, Evening Report 8 May 2025, which shows that this long-run balancing often doesn’t happen in practice. We also note that Donald Trump’s project is to upset this coherent barter process by separately accounting for trade between his country and each other country; Trump wants, in each year and for each country, either a perfect barter, or for the other country to get [to import] more by agreed value than it exports. Thus Trump wants the United States to build up indefinite trade credits with each and every country; meaning that, eventually, he wants each country to have permanently unsettled debts with respect to the USA. That perpetual accumulation of credits is what President Trump calls “making money”. It’s what economists call mercantilism. Historically, Netherlands is the country most notorious for its mercantilist approach to international commerce.)

The ‘terms of trade’ does not measure the balance of trade. Rather, it is a measure of what a given amount of exports will buy. Thus, ‘favourable’ terms of trade are when $1,000,000 of exports will buy many imports. And adverse terms of trade are when $1,000,000 of exports will fund a relatively small quantity of imports.

The chart above shows that Aotearoa New Zealand is currently enjoying near-record favourable terms of trade. At least with respect to New Zealand’s economic position in the world, New Zealand is currently enjoying the best of times. (And Donald Trump’s shenanigans in the United States will barely put a dent in this serendipitous state of affairs for New Zealand.) Indeed, when the Terms of Trade data for the June quarter of 2025 is released next month, New Zealand may have achieved a record-high terms of trade; the present covid-induced record high (from 1957, the year the data from Statistics New Zealand commences) is late 2021.

This year, if a terms-of-trade measure of 1000 is seen as neutral, then we are at present fifty percent above neutral, meaning our exports will buy fifty percent more imports than they would have bought under neutral – eg 1990s’ – international conditions.

We may note that from a perspective of 1985, New Zealand was ‘suffering’ a long-term decline in its terms of trade, indicating a need for economic diversification. But over the last 40 years, the whole lives-to-date of most living New Zealanders today, New Zealand has enjoyed a secular (albeit fluctuating) rise in its terms of trade; a persistent rise of its average living standards. This is not because of diversification; it is indeed despite diversification, and because the diversification of New Zealand’s tradable economy since the 1980s has been somewhat limited.

We can look back over this chart, and observe the good times and the bad times; noting that these good times and bad times have reflected New Zealand’s position in the ‘stormy seas’ of international commerce.

The terms of trade are only minimally affected by the economic policies of the day. The main reason for the improvement of New Zealand’s terms of trade since 2000 would be the rising living standards of the growing middle classes of the developing world (ie of the ‘global south’).

The terms of trade have contributed to many of New Zealand’s election results. A declining ‘terms of trade’ during election year would increase the likelihood of a change of government in New Zealand.

I’ll just make three further comments about the history.

First, the drops in 1974 and 1979/80 reflect geopolitical crises in southwest Asia – the Arab-Israeli War of 1973, and the Iranian Revolution of 1979 – and their impacts on world oil prices. Conversely, the rebound from 1986 reflects the resolution of the economic consequences of those crises, with substantial real falls in the price of oil.

Second, in the 1960s, the timing of the terms of trade fluctuations tended to reflect the timing of British general elections (meaning the relatively generous fiscal policies of the British government in the lead up to those elections, leading to more British consumer spending): 1959, 1964, 1966, 1970. (We note that, in the absence of such policies in 1970, the British Labour Government lost an election it was expected to win. And the new Conservative Government pursued unusually generous fiscal policies soon after it came into being.) The United Kingdom joined the European Economic Community (now the European Union) in 1973. Before then, it was the British market that largely determined New Zealand’s terms of trade.

Third, New Zealand economists used to take a keen note of the terms of trade, as a key economic barometer. This century, the ‘terms of trade’ only rarely becomes a point of public discussion about ‘the economy’. This reflects an increased (and somewhat misplaced) academic emphasis on government policy as a determinant of New Zealand’s economic success or otherwise. And a reflection of the unwillingness of New Zealand’s progressive and conservative elites to facilitate a sharing of the gains arising from New Zealand’s favourable terms of trade.

______________

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Getty Images

When the Trump administration arbitrarily imposed 15% tariffs on New Zealand exports on August 1, up from a previously announced 10%, no one should have been surprised.

“Reciprocal” tariffs, based on the difference in value between what the United States imports from and exports to other countries, were signalled on April 2, Trump’s “Liberation Day”. New Zealand’s latest tariffs are higher than some, lower than many.

Many governments are now frenetically seeking deals before the tariffs take effect on August 7. New Zealand’s chief trade negotiator Vangelis Vitalis has been dispatched to Washington urgently to plead New Zealand’s case, with Trade Minister Todd McClay also on his way.

Labour’s trade spokesperson has declared the lack of a deal for lower tariffs – along similar lines to ones struck by the European Union and United Kingdom – a “major fail”.

But politicians should be careful what they wish for. Bigger countries have already caved in to Trump’s demands, signing vague deals at a high political and economic price with no real guarantees.

Trump’s economic rationale

Trump has a long expressed love for tariffs as leverage over countries that depend on US markets. Essentially, these are taxes the US charges on imported goods.

It’s not New Zealand exporters who “pay” these taxes, it is US importers, and likely their customers. Similarly, New Zealand exporters don’t “save” millions from tariff cuts.

Trump hopes making imports more expensive will spur domestic production, support local business and create jobs, and the trade imbalance with the US would decline. As a bonus, in June alone, tariffs earned the US$26 billion in revenue, partly compensating for massive tax cuts contained in Trump’s “One Big Beautiful Bill”.

By imposing tariffs unilaterally, Trump breaches the US tariff limits at the World Trade Organization (WTO) and its “most-favoured-nation” rule of treating all countries equally. But the US has already paralysed the WTO’s dispute system. US tariff limits and other trade rules in US free trade agreements are also being ignored.

Domestically, Trump has used the 1977 International Emergency Economic Powers Act to justify bypassing Congress to impose tariffs, on the basis that threats to the US economy constitute a “national emergency”.

This was ruled unlawful by the Court of International Trade and is currently under appeal at the Federal Circuit Court of Appeals. Meanwhile, the tariffs continue. The Trump-friendly Supreme Court would likely endorse them.

US economist Paul Krugman predicts this approach will not be rolled back by future administrations and will become “the new normal”.

Exaggerated claims, few guarantees

The various bilateral “deals” other countries have sought to mitigate Trump’s tariffs look vague and precarious.

The talks and the outcomes remain secret. The vaguely worded “frameworks” – not signed agreements – lack detail and allow Trump to make exaggerated claims at odds with the other country’s statements. Krugman describes these “understandings” as, for the most part, “vaporware”.

Take the European Union’s promise to buy goods worth US$250 billion a year for three years, mainly in fossil fuels such as liquefied natural gas. One commentator described this as as “delusional” and “totally unrealistic”, given EU imports of energy in 2024 were only worth about $65 billion.

The EU also admits it lacks the power to deliver on a promise to invest $600 billion in the US economy, because that would come entirely from private sector investment over which Brussels has no authority.

Nor is there any guarantee Trump will uphold his part of the deal or not demand more. The EU said its landmark regulations on Big Tech survived unscathed; Trump says they remain on the table as further “non-tariff barriers” – trade-speak for anti-business regulations.

To take another example, Japan has said its 15% tariff deal operates from August 1, while the US gives no start date.

The White House said “Japan will invest $550 billion directed by the United States to rebuild and expand core American industries” to be spent at “President Trump’s direction”. The investment will be in a list of industries, including energy, semiconductors, pharmaceuticals, critical minerals and shipbuilding, with the US retaining 90% of the profits.

Bloomberg reports Japan expects only 1–2% of that $550 billion to be actual investment, with the rest made up of loans, and makes no reference to Trump having control.

Trump’s political agenda

Trump’s demands are not just about trade. His strong-arm tactics – which Brazil, China and France have termed economic blackmail – aim to punish political foes and damage competing powers, notably China and Russia.

They are also a form of retaliation over other countries’ foreign policy decisions (such as Canada’s intention to recognise Palestinian statehood), a way to exploit foreign natural resources (such as Pakistan’s oil), and to remove obstacles to corporate donors (such as Canada’s digital services taxes).

What will Trump demand, and get, from New Zealand in these secret negotiations? Governments face high political costs as they navigate their own domestic processes to “secure” such deals.

At the very least, New Zealand’s negotiations need to be transparent and consulted on before commitments are made. More broadly, the country will need to rethink of its trade strategy in the light of the new international realities.

Jane Kelsey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. NZ is looking for a deal over Trump’s new tariffs – that could come with a high political price – https://theconversation.com/nz-is-looking-for-a-deal-over-trumps-new-tariffs-that-could-come-with-a-high-political-price-262497

The ‘see-saw’ chart above shows the accumulated ‘excess benefits’ that Aotearoa New Zealand, and a few other countries, have enjoyed from international trade over the last 40 years. These are benefits arising from ‘unbalanced trade’ which are in addition to the regular benefits – arising from efficient specialisation – of ‘balanced’ world trade. Real world trade is a mix of ‘balanced’ (paid for) and ‘unbalanced’ (on forever-credit).

The excess benefit data shown is an inflation-adjusted accumulation of the United States’ current account deficits. We remember that the benefits of trade are what (goods and services) you get, not what you give up.

We note here that the United States is a ‘winner’; not the loser which Donald Trump claims that it has been. The United States has enjoyed $70,000 worth of excess trade benefits over 40 years, per American. And it is projected to enjoy another $10,000 worth of excess trade benefits over the next seven years.

So, what is Donald Trump grumping about? Rhetorically, why does he aspire that ‘America’ should be like Germany?

The biggest losers, as shown here, are a group of northwest European countries, plus Taiwan. (For lack of a complete set of data from 1984, China is not shown here. But China would fit into the chart next to Malaysia. While China has significant accumulated trade surpluses, these are spread over a very large population.) The losers are the countries which have – in effect – ‘given’ away lots of stuff; exports for which they have not received anything in return and will probably never receive anything in return.

The 2030 projections show that these ‘surplus’ countries will continue to under-import; they are not projected to claim the imports that are rightfully theirs to enjoy. Rather, the deficit countries will most likely continue to enjoy these excess unpaid-for benefits.

(There are at least two other ‘surplus countries’ – countries like Germany and Sweden – which would be ‘off the chart’: Singapore and Norway. And one other deficit country: Türkiye.)

Discussion

With international trade in any given year, surplus countries ‘give’ goods and services to deficit countries. They give ‘with strings’. The most obvious form of ‘string’ is a return gift next year; a fully commercial kind of ‘string’ would be a return gift with interest.

For example, if Sweden exports US$1,100 million worth of stuff (ie goods and services) to New Zealand in 2025, and New Zealand exports $1,000 million worth of stuff to Sweden in 2025, then the 2025 gift is $100 million worth of stuff from Sweden to New Zealand. (In technical language, and from New Zealand’s viewpoint this gift from Sweden is called a bilateral trade deficit; from Sweden’s point of view, it’s a trade surplus.)

A return gift with 3% interest would be $103 million worth of stuff from New Zealand to Sweden. (This would be a New Zealand bilateral trade surplus – a deficit for Sweden – in 2026.) The bilateral – ie two-country – ledger would be settled. Effectively, in this example, Sweden lends $100 million of stuff to New Zealand in 2025, and New Zealand repays the loan, with interest, in 2026. Gifts ‘with strings’ are debts.

There are two potential problems. The first problem is that New Zealand may not be able to sufficiently increase, in one year, its exports to Sweden (eg from $1,000 million to $1,203 million, assuming unchanged imports from Sweden). One solution might be for New Zealand to increase its exports by that amount to other countries, and for other countries to export $203 million more to Sweden. But that increase in exports of $203 million might still be too difficult for New Zealand to accomplish in 2026, regardless of who the buyers are. New Zealand might need to borrow more in 2026, (or to import less,) or to repay its 2025 trade debits further into the future.

Indeed, New Zealand might prefer something like a 40-year mortgage. New Zealand could run trade surpluses re Sweden (ie Sweden running deficits) of about 4,358,000 each year for 40 years. In total, over the 40 years from 2026 to 2065, Sweden would receive stuff worth $174,323,300 as its ‘return gift’.

The second (much larger) ‘problem’ is that Sweden might not want to run a trade deficit at all; that is, Sweden might not want to be repaid (except, that is, in some imaginary never-never timeframe). Whether this qualifies as a problem depends on a person’s belief-system. If New Zealand is perfectly happy to receive – into the indefinite future – annual increments of unpaid-for goods and services, and Sweden prefers to keep supplying such stuff without material recompense in foreseeable time, then this sort of unbalanced trade can be categorised as a win-win outcome.

Sweden might not want New Zealand’s (or anybody else’s) debt to it to be repaid; in 2026, or ever. Sweden, happy to run a trade surplus in 2025, might actually prefer to keep making annual ‘gifts’ to New Zealand (and other countries). While each of these gifts would be technically an addition to New Zealand’s debt to Sweden, New Zealand would be able to – maybe, be obliged to – delay settlement of any of that debt (let alone all of it) indefinitely.

In this example, Sweden is a ‘mercantilist’ country; mercantilist means ‘merchant capitalist’, the social science analogue of alchemy. Indeed, Sweden actually is a mercantilist country. Its preference is to accumulate ‘promises’, whereas countries like the United States and New Zealand have been accumulating (and enjoying) imported goods and services.

Mercantilists of yore sought to accumulate ‘treasure’, especially gold. Indeed, in the quarter millennium from 1500 to 1750, economic policy and foreign policy – especially but not only in European power centres – was to become rich by accumulating treasure hoards.

Mercantilism never went away, despite having been debunked by Adam Smith and others around 250 years ago (The Wealth of Nations was published in 1776). In that golden age of mercantilism, the Dutch – the Netherlanders – succeeded par excellence. (Part of their success was in exporting military hardware and software – big guns, and big military knowhow – to all sides in the Thirty Years War of 1618 to 1648. Is that what the USA will end up mimicking?) As we can see from the chart, the Dutch still do incur some of the world’s biggest export surpluses. Instead of accumulating treasure as they did in the seventeenth century – as gold and silver bullion and specie – they now accumulate ‘virtual treasure’ or ‘virtual gold’. Virtual gold is the whole set of ‘promises’ and ‘titles’ – including money and real gold – that are formally known as ‘financial assets’.

New Zealand and America, and others, get the consumable loot. Sweden and Netherlands and Germany get the paperwork. Everyone should be happy.

The dark cloud on the horizon comes when the Americas and the Aotearoas of the world start wanting to be like Germany and Sweden. Then indeed our happyish world descends into a ‘race-to-the-bottom’. Not every country can sit with Germany and its neighbours at the bottom of the above chart. This can be thought of as a see-saw chart: someone has to be at the top; we cannot all be at the bottom.

If some countries have forever-surpluses, other countries must have forever-deficits. Getting to benefit from other countries’ largesse – as New Zealand and America do – may seem like a problem to some. But we should remember that the driving force of the capitalist market system is to want – indeed, to demand – consumable goods and services. Someone has to be able to benefit from all the hard work and sacrifice of others.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Analysis by Geoffrey Miller – This analysis was first published by Democracy Project.

Don’t put it all at risk.

That’s likely to be the take-home message for New Zealand Prime Minister Christopher Luxon in his meetings with Li Qiang, the Chinese Premier.

Li’s visit to Wellington this week is the highest-ranking visit by a Chinese official since 2017. The trip down under – Li is also visiting Australia – constitutes something of a charm offensive by Beijing. Pandas are on the agenda for Li’s stop in Adelaide.

China’s advance publicity for the trip has accentuated the positives and downplayed points of disagreement. The Chinese foreign ministry’s official spokesperson reminded journalists of the ‘enormous benefits’ of Wellington’s relationship with Beijing.

A pledge to discuss ‘international and regional issues of mutual interest’ was the only faint hint that thornier issues – such as New Zealand’s contemplation of joining ‘Pillar II’ of the AUKUS pact – might also be discussed behind the scenes.

This ‘good cop’ approach continued after Li touched down in Wellington. In his first comments made after his arrival in New Zealand, released in a written statement, the Chinese Premier was upbeat about the health of the bilateral relationship.

Showering New Zealand with praise – ‘China-New Zealand relations have always stood at the forefront of China’s relations with the developed world’ – Li suggested there could be ‘an even brighter future’ if the momentum between the two countries were maintained.

Coincidentally, a promise of ‘brighter future’ was also the theme of the New Zealand National Party’s 2008 election campaign that ushered in John Key as New Zealand’s Prime Minister. That vote heralded the start of the golden years for trade with China, riding the waves of a pioneering free trade agreement signed by Helen Clark’s Labour-led Government just before Key’s victory.

Xi Jinping visited New Zealand in 2014, resulting in the signing of a Comprehensive Strategic Partnership. Meanwhile, China became New Zealand’s biggest trading partner in 2017, the same year that Li Qiang’s predecessor visited the country.

Key was famously bullish on China and has maintained personal relationships with the country’s leaders since he resigned in 2016 and resumed a business career.

But while the 2010s boom brought talk of New Zealand being a ‘rockstar economy’, seven years on, New Zealand is now in recession. And new trade figures for the year ending in March 2024 show that New Zealand’s trade with China has – relatively speaking – hit turbulence.

The numbers show that trade in both directions fell for the first time since the Comprehensive Strategic Partnership was signed. Most troubling for Christopher Luxon will be that New Zealand’s goods exports to China – which are dominated by primary products such as dairy, meat and wood products – fell by almost nine per cent, from $NZ20.07 billion to $NZ18.34 billion.

In the overall trade figures, this fall was somewhat masked by a post-pandemic recovery in the export of services – particularly travel, as Chinese tourists regained the ability to visit New Zealand. Nevertheless, overall exports still fell by around two per cent, from $NZ21.39 to $NZ20.09 billion.

There will be no better opportunity than Li’s visit for Christopher Luxon to talk to about ways to turn this somewhat troubling economic trend around. After all, Luxon focused heavily on economic matters during his election campaign in 2023 – pledging to get New Zealand ‘back on track’.

And while Luxon has also focused on the need for trade diversification – which has included programmes to boost ties with India and the Gulf states – a sudden drop in trade with China during a recessionary climate and rising unemployment is probably not what the New Zealand Prime Minister had in mind.

As would be expected, the Chinese Premier’s visit to Wellington is a carefully-choreographed and economically-focused mission – at least on the surface. For the charm offensive to work, it has to be genuine.

But behind the scenes, New Zealand’s position on Aukus will remain the elephant in the room. The pact was not specifically mentioned in China’s official accounts of foreign minister Wang Yi’s visit to Wellington in March – but New Zealand counterpart Winston Peters later confirmed that Wang had raised the matter.

And in May, Chinese Ambassador to New Zealand Wang Xiaolong was unusually forthright on Aukus. The Ambassador repeatedly referred to the arrangement as a ‘military alliance’ – a label clearly at odds with Aukus-friendly characterisations of the pact as a technology-sharing partnership.

The Ambassador said Aukus was ‘clearly and unabashedly designed to maintain US hegemony and contain other countries’ development’, adding that ‘joining such an alliance will not make any country more secure or make the Asia-Pacific region more stable’. He closed by noting his hope that any decision by New Zealand on Aukus would be ‘taking fully into account its own long-term fundamental interests’.

This is undoubtedly plain speaking. China would not be happy if New Zealand became involved with Aukus, to put it mildly.

But Li Qiang’s trip to New Zealand is about the big picture.

Its chief purpose is to remind Christopher Luxon of just how important China is to New Zealand, both economically and beyond.

It is a goodwill tour with a subtext.

There is also a lot to lose.

Geoffrey Miller is the Democracy Project’s geopolitical analyst and writes on current New Zealand foreign policy and related geopolitical issues. He has lived in Germany and the Middle East and is a learner of Arabic and Russian. He is currently working on a PhD at the University of Otago on New Zealand’s relations with the Gulf states.

The Bank of New Zealand blocks a donation to UNRWA, then thinks again. Like many people I have been horrified by Israel’s genocidal war against the Palestinians. I have made modest donations to UNICEF, partly to help but also, I must admit, to appease my conscience. I was particularly inflamed by the Israeli government’s attempt to close down the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).This is the major agency providing relief for the Palestinians, and so a natural target for the Israeli government.

I attempted to make a donation. This would both help the Palestinians but also be a protest against Israeli repression. The easiest way seemed to be to make a direct transfer from my account with the Bank of New Zealand (BNZ) to an UNRWA bank account, of which there are eight. The most suitable seemed to be Bank Austria in Vienna. I filled in the required details, pressed the button, and the money flew from my account.

But it didn’t end up at its destination.

A day or so later, I got this message from the BNZ:

Payment held SSA – CPIT27136644

Good afternoon,

There is a payment of EUR100 currently held by BNZ Sanctions/Compliance department.

We understand and sympathise with the current situation in Palestine, however for our compliance and your security, as this is a new payee based in or near a conflict area we have some further questions which we require to be provided before we can release this payment.

1. Detailed purpose of payment and copy of invoice (if applicable)
2. Please advise of any underlying parties or beneficiary of funds. Please include full name, physical address and website of the underlying party/beneficiary of funds
3. Please advise if the payment (including all parties involved) has any direct or indirect relation to ‘the government of Gaza’
4. Please advise if the payment has any direct or indirect relation to Iran, North Korea, Russia, Syria, Venezuela, Cuba, Crimea, Donetsk or Luhansk regions. If yes, please explain

The ‘usual suspects’ and none with relevance to New Zealand. And as for Cuba, the UN General Assembly has repeatedly called for sanctions to be lifted; last year 187 countries (including NZ and Australia) voted in favour with only two opposing – United States and Israel.

Then followed some computer gobbledygook and ended with:

For more on why we are asking for this information, please refer to our bnz website here.

Kind Regards
[Name redacted]
Operations Associate – Sanctions Screening
Operational Excellence

Quite a list of unanswerable or meaningless questions, but the key phrase was the reference in Q3 to ‘the government of Gaza.’ That is, the victim of genocidal oppression, not the perpetrator. But then banks and morality make uncomfortable bedfellows. No objection to sending money to Israel – don’t suppose my €100 would buy many bullets, but probably enough to kill a family of five.

The links to the web pages on sanctions are informative, and damning. We are told that:

We follow sanctions laws from New Zealand as well as those from relevant overseas sanctions authorities.

One might ask, what overseas sanctions authorities should the BNZ follow except the United Nations Security Council (UNSC)? That’s what the pundits on international law tell us. But no. Firstly, the Bank of New Zealand, despite its name, is owned by the National Australia Bank (NAB). The list of sanctions authorities obeyed by BNZ, who’s in, who’s out (no sign of China or India), and its order, is instructive:

• New Zealand Ministry of Foreign Affairs and Trade
• Australian Department of Foreign Affairs and Trade
• U.S. Office of Foreign Asset Control
• U.K. Office of Financial Sanctions Implementation
• Monetary Authority of Singapore
• European Union
• United Nations Security Council.

DFAT is there, at number 2, but it is the next one – US Office of Foreign Asset Control (OFAC) -which is in fact the kingpin. It runs not merely the US sanctions regime but that of ‘The West’ in general, and with unbridled enthusiasm. It is a financial Weapon of Mass Destruction, inflicting pain, immiseration and often death around the world. Sanctions, after all, are essentially a weapon of war, so destruction is to be expected. And at the bottom of the list of authorities is the UNSC

The BNZ, of course, puts a rather different gloss on things:

Sanctions are restrictions on trade and financial transactions. They aim to cut off resources to stop aggressive and harmful activity, for example, terrorism, nuclear proliferation, military conflicts, or human rights abuse.

No mention of genocide there. That’s a relief. Similarly nuclear proliferation rather than nuclear weapons as such; that’s good news for the Pentagon’s plans to modernise its huge nuclear arsenal. Military conflict? Surely not the US?

I’ve written a bit on sanctions, and I am familiar with the New Zealand government’s blocking of aid to the Red Cross in North Korea, but this case was somewhat different. BNZ, obeying ‘sanctions authorities’, was imposing sanctions on an agency of the United Nations itself.

I sent a polite reply to BNZ:

Good afternoon XXXXX

Thanks for your email.

I’m rather bemused. Since this is a donation to an agency of the United Nations – the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) – I presume you are not suggesting that it contravenes UN sanctions.

So this is a matter of New Zealand Government sanctions?

If so, is there a specific regulation I should be aware of?

Tim

Easter intervened (is there a message there?) and then came a reply from BNZ:

Thank you for the below information.

We have now released the payment.

Why the change of heart, I don’t know.

Perhaps the amount of money was so small that the administrative hassle wasn’t worth it? Perhaps someone in authority realised that taking action against a UN relief organisation, especially in the current circumstances, could lead to damaging publicity? Perhaps the good people at BNZ were embarrassed at blocking aid to the victims in Gaza?

And I have no reason to suppose that these weren’t good people. And that leads to thoughts of the Eichmann case and Hannah Arendt’s phrase ‘the banality of evil.’ Good people – or at least ordinary people who are not consciously sadistic or unfeeling – doing evil things. People in bureaucracies not concerning themselves with the consequences of their actions. People thinking, with little scrutiny, they are doing good but in fact causing harm.

Sanctions are, in general, weapons employed by the strong against the weak, an instrument to coerce them into yielding sovereignty and resources, and to sacrifice their interests to the benefit of the aggressor. Israel, backed by the US, against the Palestinians with sanctions as one weapon in the armoury. It is Israel that should be sanctioned, but instead it is provided with weapons with which to kill tens of thousands of women, men and children in Gaza. And the BNZ instinctively started to sanction the victims.

The Banality of Evil meets the Theatre of the Absurd.

*******

EDITOR’S NOTE: The New Zealand Ministry of Foreign Affairs and Trade details the New Zealand Government’s policy on sanctions here. ( ref. https://www.mfat.govt.nz/en/peace-rights-and-security/un-sanctions/ )

Tim Beal raises a significant issue where foreign owned banks operating in New Zealand, such as the BNZ, may be obeying sanctions authorities issued by governments of other countries including; Australia, the United States of America, United Kingdom, and the European Union.

Recessions in the last Ten Years: New Zealand and Japan

Tomorrow we will see the latest Gross Domestic Product (GDP) data for New Zealand. It’s worth looking today, however, at what the situation is before that data release (with its revisions as well as new data). And in context by comparing New Zealand with a country with different demographic circumstances.

First, the journalistic definition of a recession is two consecutive quarters of negative GDP growth; this is normally taken to be overall GDP, not GDP per person in the growing or declining population.

An alternative definition is to compare GDP in the latest quarter with GDP in the same quarter of the previous year. By this Y-to-Y definition, any negative number is a recession. However, for New Zealand, the highest quarter for GDP in today’s available data is the September 2022 number (1.325 billion dollars; not shown in table). Therefore, each quarter of 2023 has a lower GDP number than September 2022. Thus, by this definition, all of 2023 should be classed as in recession.

The table below highlights recessions in New Zealand and Japan by both definitions, and then adds per capita recessions. (Per capita – ie population adjusted – recessions are highlighted in yellow.)

Under the commonly used criterion, New Zealand was in a technical recession in the first quarter of 2023, and in the June quarter of 2020. The 2020 recession is clearly related to the Covid19 disruptions. (And Japan was in recession only at the end of 2018.) When allowing for population changes, New Zealand under this measure has been in a recession for all of 2023.

When applying the alternative measure of recession, we see again that New Zealand has been in recession for all of 2023 for which we have data today. Japan turns out to have been in a long recession during 2019 and 2020.

What is also important to note is that, despite overall slower growth in the last ten years, Japan has shown itself to have had a much more vigorous economy than New Zealand in 2023.

I will follow this up tomorrow with some explanations for the superior performance of Japan after 2020.

But I will end this by considering the imaginary country of Neustria.

In Neustria, the general pattern was falling GDP from 2013 to 2018. And the general pattern from 2019 to 2023 was rising GDP.

The alternative definition of recession shows this correctly; Neustria was in recession from 2013 to 2018. But the popular measure our media and some academics use shows recessions only (and persistently) in the growth period from 2019 to 2023.

This last table shows the substantial shortcomings of our popular definition of recession. It suggests that the alternative measure suggested is superior to the popular measure. This reaffirms the reality that the New Zealand economy has been in recession through most if not all of 2023. And that’s the reality New Zealand businesses were facing last year, and are still facing this year.

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Timing is everything. And from China’s perspective, this week’s visit by its foreign minister to New Zealand could be coming at just the right moment. The visit by Wang Yi to Wellington will be his first since 2017.

Anniversaries are important to Beijing. It is more than just a happy coincidence that the visit is taking place during the tenth anniversary year of the signing of a Comprehensive Strategic Partnership between China and New Zealand.

That agreement, signed during a visit to Wellington by Xi Jinping in November 2014, marked the start of glory days for bilateral trade. New Zealand’s exports to China have roughly doubled in value since Xi’s visit. They now stand at nearly $NZ21 billion annually. Imports are not far behind, but there is still a trade surplus of some $NZ3 billion in New Zealand’s favour.

Indeed, China has been New Zealand’s biggest two-way trading partner since 2017. A consistent flow of agricultural exports to China – especially milk powder and meat – helped to keep New Zealand afloat during the Covid-19 pandemic while both countries’ borders were closed.

However, New Zealand’s exports to China fell last year for the first time (except for covid-affected 2020) since the 2014 pact was signed. Goods exports took a particular tumble, falling $NZ1.7 billion from 2022 levels in the year to December 2023. Only a post-pandemic recovery in services exports, driven by travel, was able to mask a greater fall. But it was not enough to prevent a $NZ500 million drop overall.

The removal of China’s last remaining tariffs on New Zealand dairy products at the start of 2024 may provide some hope for improvement this year.

But forecasts for China’s economy are mixed and a bumpy post-Covid 19 recovery seems likely. After an expansion of 5.2 per cent in 2023, the International Monetary Fund (IMF) predicts China’s economy will grow by only 4.6 per cent this year and 4.1 per cent in 2025.

Given its food-focused exports, New Zealand is particularly vulnerable to sluggish Chinese economic growth. Tourism is also affected: visitor numbers from China for November 2023 were just 52 per cent of those seen during the same month four years earlier, before the pandemic.

A visit by Wang Yi cannot solve these wider macroeconomic problems. But it will put New Zealand’s crucial relationship with China in the spotlight.

There is every chance the trip could set the stage for an anniversary year visit to Wellington by Xi Jinping later in 2024.

However, whether this occurs will be highly dependent on New Zealand’s next steps in relation to Aukus.

It can be taken as read that Wang will have strong words for Winston Peters, his New Zealand counterpart, about Wellington’s apparent enthusiasm to entertain joining ‘Pillar II’ of the new pact.

The tea leaves are still being read after Labour lost power in the October 2023 election and a new three-way, centre-right coalition led by the National Party’s Christopher Luxon took office the following month.

A joint statement issued by Australia and New Zealand after the countries’ foreign and defence ministers met in Melbourne in early February claimed Aukus was making ‘a positive contribution toward maintaining peace, security and prosperity in the Indo-Pacific.’

Reaction from the Chinese Embassy in Wellington to the text was typically furious. In an apparent reference to another section of the joint statement which expressed ‘grave concerns about human rights violations in Xinjiang’, a spokesperson argued that ‘groundless accusations have been made on China’s internal affairs’.

Meanwhile, on Aukus, the Embassy asserted that the pact ran counter to ‘the common interests of regional countries pursuing peace, stability and common security’. The spokesperson asked ‘relevant countries’ to ‘cherish the hard-won environment for peace and stability in the Asia-Pacific region, and be prudent with their words and action to maintain peace, stability and development’.

An indirect, yet ultimately harder-hitting rebuke came from the Chinese Ambassador to New Zealand himself, Wang Xiaolong. Lamenting a lack of options after a last-minute cancellation of a flight to Auckland the day after the joint statement was issued, the Ambassador posted on X: ‘Stuck at Wellington airport clueless as to what to do due to the cancellation of my flight to Auckland and the lack of alternatives. Right now, I am really missing the high-speed trains back in China.’

The displeasure could not be clearer.

Earlier, New Zealand’s new government had sought to move swiftly on Aukus, particularly after Labour itself had laid the groundwork for the new Government by issuing a set of three hawkish defence blueprints just months before the election.

In December, Judith Collins, the defence minister, said that a failure to join Aukus in some form was ‘a real opportunity lost by the previous government’. Christopher Luxon then appeared to back her, telling media: ‘we’re interested in exploring Pillar II, particularly in Aukus, and the new technologies and the opportunities that may mean for New Zealand’. Meanwhile, Winston Peters called for greater NZ-US cooperation in the Pacific, saying ‘we will not achieve our shared ambitions if we allow time to drift’.

However, the Aukus tide may be turning.

Bonnie Jenkins, the US Under Secretary for Arms Control and International Security, visited New Zealand in early March and told media: ‘we’re still in the process of having discussions about additional partners’, adding ‘that’s not where we’re at right now’.

Speech notes for an address to be given by Jenkins also seemed restrained.

The lack of a concrete Aukus membership offer is not a new argument. In May 2023, New Zealand’s then Labour Prime Minister Chris Hipkins called the idea of joining ‘purely hypothetical’.

However, gradual shifts in language since then – culminating with Luxon’s comments in December – had suggested that a more specific proposal was afoot.

A looming US election was also a logical reason for New Zealand to act on Aukus sooner rather than later.

But perhaps nothing had ever really changed. A new government in Wellington might have been getting ahead of itself.

Alternatively, it could be that a rethink is now going on in Canberra, London and Washington over the merits of asking Wellington – or others – to become involved with Aukus at all.

In New Zealand itself, opposition to the deal also appears to be increasing in intensity. Labour is appearing to back away from its ‘open to conversations’ approach to Aukus that was set by former Prime Minister Chris Hipkins during a visit by Anthony Blinken to New Zealand in July.

In February, Phil Twyford, the party’s associate foreign affairs spokesperson, described Aukus as an ‘offensive warfighting alliance against China’. And David Parker, Labour’s main spokesperson, said ‘we’re not convinced we should be positioning China as a foe’.

The same month, high-profile former Labour Prime Minister Helen Clark co-wrote an opinion piece in the New Zealand Herald newspaper with Don Brash, a former right-wing rival. The strongly-worded article called on Luxon to ‘reassert New Zealand’s independent foreign policy by making it clear that we want no part of Aukus’.

Finally, questions are being asked in Australia about the future of the original purpose of Aukus – to give Canberra nuclear-powered submarines – following a US decision to cut production of ‘Virginia’ class submarines in half from 2025.

Adding to the uncertainty is Donald Trump’s presumptive nominee status in the US presidential election campaign. A survey conducted in August 2023 found 37 per cent of Australians thought Canberra should pull out of the wider Anzus alliance if Trump wins in November. Meanwhile, Trump’s own stance on the Aukus deal remains unknown.

If all is not well with ‘Pillar I’ of Aukus, it is hard to see an expansion to ‘Pillar II’ in the short-term.

For China’s Wang Yi, the potential wavering over Aukus is an opportunity.

The clock is certainly ticking, but no final decisions have been made.

There is still time for Beijing to make its case to Wellington.

Geoffrey Miller is the Democracy Project’s geopolitical analyst and writes on current New Zealand foreign policy and related geopolitical issues. He has lived in Germany and the Middle East and is a learner of Arabic and Russian. He is currently working on a PhD at the University of Otago on New Zealand’s relations with the Gulf states.

This article can be republished for free under a Creative Commons copyright-free license. Attributions should include a link to the Democracy Project (https://democracyproject.nz)

New Zealand’s international relations are under new management. And Winston Peters, the new foreign minister, is already setting a change agenda.

As expected, this includes a more pro-US positioning when it comes to the Pacific – where Peters will be picking up where he left off. Peters sought to align New Zealand more closely with the United States under his ‘Pacific Reset’ policy that he launched while serving as foreign minister under Jacinda Ardern’s Labour-New Zealand First coalition government from 2017-2020.

Peters is wasting no time in getting back on the foreign affairs horse.

Just three days after being sworn in as a minster, he gave his first speech on foreign policy at the US Business Summit in Auckland last week.

Peters was lavish in his praise for the US in his address, arguing that Washington had been ‘instrumental in the Pacific’s success’. But he noted that ‘there is more to do and not a moment to lose. We will not achieve our shared ambitions if we allow time to drift.’ Adding that ‘speed and intensity’ would be needed, Peters said ‘the good news is that New Zealand stands ready to play its part.’

The early timing of the speech itself is a sign that New Zealand’s new, yet very familiar foreign affairs minister is unlikely to wait around when it comes to taking major decisions.

It was an important, agenda-setting address.

There were strong hints that New Zealand’s new Government wants to move swiftly when it comes to Wellington’s potential involvement in in ‘Pillar II’ of the AUKUS defence pact that currently involves Australia, the United Kingdom and the United States.

Peters’ disclosed in the Q&A to the speech that he had already talked to Judith Collins, the new defence minister, about New Zealand’s AUKUS stance.

The previous Labour government’s position was that AUKUS remained a hypothetical question while no formal offer existed for New Zealand to join ‘Pillar II’ of the high-level defence pact that currently involves Australia, the United Kingdom and the United States.

But while playing for time in an election year, the then Prime Minister Chris Hipkins signalled in July that New Zealand was at least ‘open to conversations’ about joining the pact in some form. And Labour’s expedited release of three major defence strategy documents in August, just prior to the election campaign, laid the groundwork for at least formal consideration of involvement in AUKUS.

The reports also paved the way for New Zealand to spend vastly more on its military and to take a more security-focused approach to the Pacific – recommendations that Peters will probably be keen to implement.

Wellington and Washington have been becoming closer since at least November 2010, when US Secretary of State Hillary Clinton visited New Zealand’s capital to sign the ‘Wellington Declaration’. The relatively short agreement served to clear the air after decades of chequered bilateral relations stemming from the Fourth Labour Government’s introduction of a nuclear-free policy in the 1980s.

Going nuclear-free (which prevented visits from US warships) saw New Zealand cast out as a US ally. Washington formally suspended its obligations to Wellington under the ANZUS defence treaty in 1986. But nearly 40 years on, US-NZ relations are rapidly deepening, a trend that has been accelerated by Russia’s invasion of Ukraine and Western concerns over China’s rise in the Indo-Pacific.

Since February 2022, New Zealand has imposed sanctions on Russia, joined US-led groupings such as Partners in the Blue Pacific (PBP) and the Indo-Pacific Economic Framework (IPEF) and sent its Prime Ministers to successive NATO summits. And in May 2022, Jacinda Ardern visited Joe Biden at the White House, where a 3000-word joint statement called for ‘new resolve and closer cooperation’.

Meanwhile, a string of senior US officials have visited New Zealand just this year, including Secretary of State Antony Blinken, Assistant Secretary of State Daniel Kritenbrink and the White House’s Indo-Pacific coordinator, Kurt Campbell (who Joe Biden recently nominated to become his new Deputy Secretary of State).

If New Zealand does join AUKUS, it could spell the effective end of the country’s ‘independent foreign policy’. The ANZUS break-up of the late 1980s, the end of the Cold War and the acceleration of globalisation had allowed New Zealand to free itself from blocs. Wellington talked to anyone and everyone, building solid, trade-focused relations with China and others in the Global South – while not neglecting Western partners, including the United States.

Peters may think the current geopolitical environment justifies a new approach.

If he does, he should prepare for significant pushback. Helen Clark, who was Prime Minister during Winston Peters’ first term as foreign minister from 2005-8, posted on Friday that New Zealand was now ‘veering towards signing up’ to AUKUS despite bipartisan support over decades for the independent foreign policy stance.

This added to criticism from Clark earlier in the year, including in August, when she argued the new defence blueprint showed New Zealand was ‘abandoning its capacity to think for itself & instead is cutting & pasting from 5 Eyes’ partners’.

It should also be remembered that Winston Peters, while undoubtedly powerful and highly experienced, is only one Government minister. The views of Judith Collins – the defence minister – remain unknown in any detail, while the foreign policy positions of Christopher Luxon seem more centrist than radical.

Moreover, with the US now firmly focused on the war between Hamas and Israel – and its own presidential election year fast approaching – it is far from guaranteed that the hypothetical AUKUS question will turn into a concrete one for New Zealand anytime soon.

Moreover, Peters’ initial ministerial comments on New Zealand’s own position towards the Middle East suggest there is plenty of room for nuance. Calling the death toll in Gaza ‘horrific’, Peters welcomed a short-lived extension to the ceasefire on Friday, but called for all parties to ‘work urgently towards a long-term ceasefire’.

And in a radio interview earlier last week, Peters said ‘the ceasefire is not good enough, we’re going to have find a way forward through this and a peaceful solution – that’s what New Zealand and the Western world has got to put its focus on’.  Peters added ‘internationally we need to be talking to people across the political divide who are making sense on this matter’.

Talking to all sides and playing a small role in facilitating a sustainable political solution to the Israeli-Palestinian conflict would very much be in keeping with New Zealand’s independent foreign policy approach – and Winston Peters is already speaking out strongly about the war.

With Christopher Luxon passing up on the opportunity to attend COP28 in Dubai at the weekend, Winston Peters will have the chance to make the Government’s first ministerial trip to the Middle East to begin this dialogue. The Gulf states would be a natural starting point for these discussions.

Meanwhile, on Ukraine – the war that helped to speed up New Zealand’s alignment with the US in 2022 – Peters was open to the idea of New Zealand upgrading its military support to Ukraine by sending Kyiv light armoured vehicles (LAVs). While noting that the decision was not up to him alone, he added ‘if we can help we should be doing the best we can’.

Labour had denied a request from Ukraine to provide the LAVs in 2022 and of late had preferred to make financial contributions to Kyiv’s war effort – the most recent being a $NZ4.7 million package announced by Chris Hipkins in July at the NATO leaders’ summit in Lithuania.

It all adds up to a complex picture.

Winston Peters has no shortage of global issues to address.

And there could be some major changes ahead for New Zealand foreign policy.

*******

Geoffrey Miller is the Democracy Project’s geopolitical analyst and writes on current New Zealand foreign policy and related geopolitical issues. He has lived in Germany and the Middle East and is a learner of Arabic and Russian. He is currently working on a PhD at the University of Otago on New Zealand’s relations with the Gulf states.

In this the sixth episode of A View from Afar for 2023 political scientist Dr Paul G. Buchanan and Selwyn Manning present a two-part episode to analyse what to make of New Zealand Prime Minister, Chris Hipkins’ bilateral meetings with People’s Republic of China’s President Xi JinPing and other leaders of the PRC.

In part one, Paul and Selwyn also consider how the PRC-NZ trade relationship is seen in the eyes of New Zealand’s security partners.

Then, in the second half of today’s podcast, Paul and Selwyn analyse the most recent events in Russia – events that have taken shape since Wagner Commander Yevgeny Prigozhin’s pronounced intent to mobilise his mercenaries against the Russian Federation’s top two military heads, and, while doing so, pronounced that the Kremlin’s decision to invade Ukraine was based on falsehoods.

What should we expect next? What is the real state of Putinism? What do the political and power elites in Russia make of President Vladimir Putin’s handling of the matter?

Weeks prior to this event happening inside Russia, Paul and Selwyn analysed the question: How stable is Russian President Vladimir Putin’s hold on power? It’s a question that all those who watch Russian affairs have now been confronted with.

In this episode Paul and Selwyn unpack the complexity, look at what has changed as opposed to what has been said.

INTERACTION WHILE LIVE:

Paul and Selwyn encourage their live audience to interact while they are live with questions and comments.

To interact during the live recordings of this podcast, go to Youtube.com/c/EveningReport/

Remember to subscribe to the channel.

For the on-demand audience, you can also keep the conversation going on this debate by clicking on one of the social media channels below:

• Youtube.com/c/EveningReport/
• Facebook.com/selwyn.manning
• Twitter.com/Selwyn_Manning

RECOGNITION: The MIL Network’s podcast A View from Afar was Nominated as a Top Defence Security Podcast by Threat.Technology – a London-based cyber security news publication. Threat.Technology placed A View from Afar at 9th in its 20 Best Defence Security Podcasts of 2021 category.

You can follow A View from Afar via our affiliate syndicators.

In this the sixth episode of A View from Afar for 2023 political scientist Dr Paul G. Buchanan and Selwyn Manning will present a two-part episode to analyse what to make of New Zealand Prime Minister, Chris Hipkins’ bilateral meetings with People’s Republic of China’s President Xi JinPing and other leaders of the PRC.

In part one, we will also consider how the PRC-NZ trade relationship will be seen in the eyes of New Zealand’s security partners.

Then, in the second half of today’s podcast, Paul and Selwyn will analyse the most recent events in Russia – events that have taken shape since Wagner Commander Yevgeny Prigozhin’s pronounced intent to mobilise his mercenaries against the Russian Federation’s top two military heads, and, while doing so, pronounced that the Kremlin’s decision to invade Ukraine was based on falsehoods.

What should we expect next? What is the real state of Putinism? What do the political and power elites in Russia make of President Vladimir Putin’s handling of the matter?

Weeks prior to this event happening inside Russia, Paul and Selwyn analysed the question: How stable is Russian President Vladimir Putin’s hold on power? It’s a question that all those who watch Russian affairs have now been confronted with.

In this episode Paul and Selwyn will unpack the complexity, look at what has changed as opposed to what has been said, and consider the effect Russian instability has on NATO and BRICS aligned states.

INTERACTION WHILE LIVE:

Paul and Selwyn encourage their live audience to interact while they are live with questions and comments.

To interact during the live recording of this podcast, go to Youtube.com/c/EveningReport/

Remember to subscribe to the channel.

For the on-demand audience, you can also keep the conversation going on this debate by clicking on one of the social media channels below:

• Youtube.com/c/EveningReport/
• Facebook.com/selwyn.manning
• Twitter.com/Selwyn_Manning

RECOGNITION: The MIL Network’s podcast A View from Afar was Nominated as a Top Defence Security Podcast by Threat.Technology – a London-based cyber security news publication. Threat.Technology placed A View from Afar at 9th in its 20 Best Defence Security Podcasts of 2021 category.

You can follow A View from Afar via our affiliate syndicators.

Today’s speech by Jacinda Ardern to the China Business Summit in Auckland was full of soothing words for Beijing.

The headline-grabber was Ardern’s comment that ‘a few plans are afoot’ for New Zealand ministers to return to China – and that the Prime Minister herself hopes to return to the country ‘to renew and refresh in-person connections’.

This might come sooner than we think. While China’s current elimination approach to Covid-19 heavily restricts in-person travel, New Zealand’s own experience shows how quickly these settings can change. After abandoning its own zero-covid policy, New Zealand this week fully re-opens to all visitors.

Expressing a willingness to travel to China – even if it is not currently possible to so – is a signal in itself.

A recurring theme during Ardern’s speech and the subsequent Q&A was the importance of marking this year’s 50th anniversary of diplomatic ties between Beijing and Wellington.

Calling New Zealand’s relationship with China as ‘one of our most important’, Ardern pointed to the ‘long history of engagement, and of beneficial interactions between our governments, our people, cultures and in commerce’.

Indeed, throughout the speech, Ardern was mild with her criticism of China and optimistic about the health and future of the bilateral relationship.

This does not mean that the speech was entirely a one-way street – Ardern said that New Zealand would continue to ‘speak out’ on contentious issues such as ‘economic coercion, human rights, Xinjiang and Hong Kong’.

But none of this was new – Ardern has cited these same issues in similar speeches before. And in the context of an address that was overwhelmingly positive towards China, the enumeration of the thorny issues on which Beijing and Wellington do not see eye-to-eye felt more like an obligatory recitation than a serious attempt at criticism.

In the speech itself, Ardern made only a single reference to Taiwan, on which she called New Zealand’s approach ‘consistent’ – a rather placative word she also deployed at several other times during the speech. But unsurprisingly, the Taiwan issue also topped the Q&A session afterwards, especially in relation to rumours of a potential visit there this week by US House of Representatives Speaker Nancy Pelosi.

In response, Ardern noted that ‘dialogue and diplomacy remain key’. And she continued to deploy these and other China-friendly phrasings – such as ‘de-escalation’ – to stave off the more sensitive sections of the interactive session. These very tactical ‘d-words’ also made multiple appearances in the speech itself.

Taken as a whole, then, Ardern’s speech seemed to strike a softer and friendlier tone towards China than might be expected given the overall deterioration in bilateral relations between Wellington and Beijing this year.

Of all of New Zealand’s shifts towards the West this year– and there have been many – Beijing seemed most irked by the Prime Minister’s participation at the NATO summit in Madrid in late June and by the hawkish joint statement issued after Jacinda Ardern met Joe Biden in the White House at the end of May.

Both actions met with swift and sharp rebukes from China. While Beijing imposed no further penalty, there is no guarantee that New Zealand will keep escaping punishment if it continues down this bolder path.

Of course, Jacinda Ardern is adept at tailoring her speeches to her audiences. Today’s summit would have always been a chance to express a more China-friendly position. After all, Wang Xiaolong, China’s Ambassador to New Zealand, was listening in the front of the audience – and Ardern greeted him as she left the stage.

Still, the Prime Minister’s speech today continued an attempt at rhetorical recalibration that seemed to begin with her addresses in early July to Chatham House in London and the Lowy Institute in Sydney.

In London, Ardern defended China’s right to be involved in the Pacific and talked up the need for diplomacy and dialogue. In Sydney, she rejected the idea of a ‘democracy vs autocracy’ contest in the aftermath of Russia’s war on Ukraine.

Ardern’s Lowy Institute speech also heavily emphasised the notion of New Zealand having an ‘independent foreign policy’ – the phrase or variations of it were deployed no fewer than seven times – and her address to the China Business Summit today continued this theme.

Noting once again that New Zealand aimed to be ‘consistent’, Ardern said the country had for ‘decades’ adopted a ‘fiercely independent foreign policy driven by our assessment of our interests and values’.

This will go down well with Beijing: several recent official Chinese statements on the bilateral relationship have approvingly cited the phrase. The embassy’s account of a virtual meeting held between Chinese foreign minister Wang Yi and his New Zealand counterpart Nanaia Mahuta in mid-June – when tensions were particularly high – cited Beijing’s ‘respect for New Zealand’s independent foreign policy.’

China’s liking for the phrase is not without good reason. After all, the origins of the ‘independent foreign policy’ lie in New Zealand’s rift with the United States in the 1980s over the Fourth Labour Government’s nuclear-free policy.

Wellington may have largely patched up its relations with Washington since then, but New Zealand has never been fully reintegrated into the ANZUS defence alliance – a situation that Beijing would no doubt like to see continue.

The theme of the China Business Summit this year is ‘A Balancing Act’. And certainly, the softer line on China today and in recent speeches could be driven by a realisation on the part of Ardern that New Zealand had gone too far with its pro-Western foreign policy in the first half of the year.

The bigger international picture might also provide an opening for a less hardline and more nuanced approach to relations between East and West. In July, Wang Yi signalled a potential thaw in tensions with Australia, saying ‘the Chinese side is willing to take the pulse, recalibrate, and set sail again’. And Joe Biden’s virtual meeting with Xi Jinping last week was the first direct communication between the pair since March.

Of course, this positivity over rhetoric needs to be set against the substance. And on that front, the picture looks rather bleak. After all, Xi used his phone call to tell Biden ‘if you play with fire you get burned’ – a reference to the rumours that Nancy Pelosi will visit Taiwan this week.

Against this grim global backdrop, Ardern’s more generous, critical friend approach towards China will be popular with Beijing.

But time will tell whether it is anything more than just talk.

Geoffrey Miller is the Democracy Project’s international analyst and writes on current New Zealand foreign policy and related geopolitical issues. He has lived in Germany and the Middle East and is a learner of Arabic and Russian.

Further reading on international relations today
Newshub: Prime Minister Jacinda Ardern wants to visit China to ‘seize new opportunities’
Audrey Young (Herald): Jacinda Ardern: NZ opens arms to students and tourists from China
Shane Jones (Herald): We need to maximise our trade potential with China (paywalled)
Christine Rovoi (Stuff): NZ targets defence policy reset amid US-China fallout in the Pacific
Vaimoana Mase (Herald): Prime Minister Jacinda Ardern heads to Samoa as international borders reopen
Gianina Schwanecke (Stuff): Russia bans 32 more Kiwis from entering country in retaliation for sanctions
Reuben Steff (Newsroom): NZ can’t kick the can on global crises
Sam Sachdeva (Newsroom): Independence, not neutrality, for NZ foreign policy

Other items of interest and importance today

POLITICAL FINANCE LAWS AND HIGH COURT TRIAL
Thomas Manch (Stuff): Government to close NZ First Foundation ‘loophole’ in electoral law
Max Rashbrooke (Stuff): Undisclosed money threatens next election
Jane Patterson (RNZ): Cabinet to consider urgent law change to close donations loophole
ODT: Editorial – Maturity missing on reform
Claire Trevett (Herald): Money and politics – the troubling mess of donation laws and attempts to outwit them (paywalled)
Russell Palmer (RNZ): Political donations law changes: Clock ticking ahead of election
Claire Trevett (Herald): National, Act say Labour’s electoral donation reforms attempt to ‘screw the scrum’
Thomas Manch (Stuff): Political donation reform on the cards as Greens call for ‘loophole’ closure
Brent Edwards (NBR): Act calculates cost of lower disclosure threshold for donations (paywalled)
Tim Murphy (Newsroom): Two dinners, a $90,000 imperial robe and a hall full of evidence
Amy Williams (RNZ): Money trail in Nats and Labour ‘sham donors’ trial unfolding in High Court
Catrin Owen (Stuff): Week 1 of the Labour and National political donations trial and what’s next

GREENS
Thomas Coughlan (Herald): Green leadership race begins as MP complains of ‘nefarious deeds’, others eye candidacy (paywalled)
Heather du Plessis-Allan (Herald): James Shaw deserves the attack on his Green Party leadership (paywalled)
Josie Pagani (Stuff): Green plotters are wrong: James Shaw is a radical achieving as much as he can
Emile Donovan (RNZ): The Green Party’s philosophical tug-of-war
William Hewett (Newshub): Former Greens MP Kevin Hague backs James Shaw, says he’s ‘achieved more’ on climate than every previous minister, Government
William Hewett (Newshub): Green Party leadership challenge: MPs Jan Logie, Teanau Tuiono rule themselves out of running for co-leader
1News: Green MP Teanau Tuiono not running for co-leader
Peter Dunne (Newsroom): Removing Shaw as Greens co-leader won’t lead to stronger climate change policy
Chris Trotter: The Greens’ unhappy relationship with power
Colin Peacock (RNZ): Greens’ grass roots ‘revolt’ excites media
Hayden Munro (Herald): Green Party’s James Shaw knows climate action needs parliamentary power not protest (paywalled)
RNZ: Green Party co-leader nominations open
1News: Julie Anne Genter not seeking Green Party co-leadership
Steve Braunias (Herald): The secret diary of James Shaw (paywalled)
Martyn Bradbury (Daily Blog): The Greens only have themselves to blame for this phantom coup
Martyn Bradbury (Daily Blog): By capitulating to Māori Capitalism, James Shaw proves why he should be rolled

ECONOMY, EMPLOYMENT AND COST OF LIVING
Gareth Vaughan (Interest): Politics + monetary policy = a political schmozzle?
Janet Wilson (Stuff): You can’t reduce inflation by throwing more money around
Matthew Scott (Newsroom): Targeted living cost payments no bullseye, say advocates
Liam Dann (Herald): Nation of Debt: Just how much does every Kiwi owe now? (paywalled)
Jem Traylen (BusinessDesk): Zero income but no cost of living payment from government (paywalled)
1News: Ardern rejects claim Govt spending making inflation worse
Melanie Carroll (Stuff): What is the risk of a recession for New Zealand?
Tom Pullar-Strecker (Stuff): Unemployment figures expected to show labour market ‘as tight as a drum’
Kevin Norquay (Stuff): We are spending less on the things that make us happy, thanks to Covid
Harshal Chitale (Stuff): We must fight inflation now or pay a higher price
Paula Bennett (Herald): The job market is in crisis and welfare numbers don’t tally (paywalled)
Michael Neilson (Herald): Benefit incomes up 40pc on 2018 – Ministry of Social Development report
Daniel Smith (Stuff): Businesses trial four day working week but expert says employers should go even further
Liam Dann (Herald): Making sense of the Reserve Bank pile-on (paywalled)
Brent Edwards (NBR): Treasury begins paying for losses incurred by the Reserve Bank (paywalled)
David Hargreaves (Interest): How hot will the labour market be? And what will the RBNZ make of it?
Richard Harman: Reserve Bank “played with fire” (paywalled)
Andy Fyers (BusinessDesk): Everyone feels the inflation pain this time (paywalled)
Catherine Hubbard (Stuff): Fishing company boss to work on factory floor as labour shortage bites
Liam Dann (Herald): NZ’s inflation problem: It could be worse – and it is in many countries (paywalled)
Rob Stock (Stuff): New Zealanders overseas face mounting student loan debt
Herald: What would a monetary policy review mean for the Reserve Bank?

PARLIAMENT, GOVERNMENT AND ELECTIONS
Rachel Smalley (Today FM): Labours leadership is inept, irresponsible and chaotic
Matthew Hooton (Herald): Danger on the left, risk on the right (paywalled)
Pete McKenzie (North & South): The Man in the shadows
1News: Class politics in Western democracies are changing – expert
Liam Dann (Herald): Grant Robertson: ‘I loved him, he was my father but I never really forgave him’
Martyn Bradbury (Daily Blog): TDB Cabinet Top 10 Rankings
Brian Easton (Pundit): Turmoil in the National caucus
Alison Mau (Stuff): The figures just don’t stack up for big-talker Brian Tamaki
Bill Ralston (Listener/Herald): Searching for a bright spot in NZ’s bleak, cold winter of discontent (paywalled)
Larry McMyler (RNZ): Youth MPs call for improved civics education in NZ schools
Luke Malpass (Stuff): ACT and the Greens: two very different parties, two similar trajectories
Sam Sachdeva (Newsroom): Govt hires for income insurance scheme despite timing concerns
Thomas Going (Stuff): Make lowering voting age an issue for Parliament
Audrey Young (Herald): Three MPs exempt from wearing masks in Parliament all from Act
Glenn McConnell (Stuff): Simon Bridges wants to start a new life, but strangers keep flashing him
Newshub: Michael Wood, Nicola Willis quizzed on whether they want Labour, National’s top jobs

THREE WATERS
Graham Adams (The Platform): Talk of a coup ratchets up Three Waters debate
Herald: Editorial: Three Waters seems to have blocked Government’s ears (paywalled)
ODT: Calls for national referendum
The Facts: Summary of 10 Three Waters polls
Thomas Manch (Stuff): LGNZ asks Government to delay stormwater handover in Three Waters reforms
1News: Compromise could see Three Waters become Two Waters
Grant Miller (ODT): Three Waters: Jacinda Ardern’s governance message greeted with scepticism by southern leaders
Cate Macintosh (Stuff): No timeframe for fluoridating Christchurch’s water, while misinformation grows
Adan E. Suazo (Newsroom): No resolving water conflicts without trust

CO-GOVERNANCE AND DEBATES ON RACE
Deena Coster (Stuff): ‘White anxiety’ and the quest for power-sharing in Aotearoa
Deena Coster (Stuff): The idea of sharing power in Aotearoa doesn’t need to be scary
George Driver (North & South): The Fate of our national estate
Elizabeth Rata: In Defence of democracy
Anthony Poole (Open inquiry): It’s time to speak up against the New Racists
Wilhelmina Shrimpton (Today FM): Let’s stop racism before it starts

GOVT TRANSPARENCY AND CONTROL OF OFFICIAL INFORMATION
Andrea Vance (Stuff): National accuses Government of ‘sanctimonious talk’ on transparency
Andrea Vance (Stuff): How flawed freedom of information system keep the public in the dark
Nikki Macdonald (Stuff): Official information law is a horse and cart on a Formula One race track – former ombudsman
Peter Boshier (Stuff): The changes our official information watchdog wants to see
Nikki Macdonald (Stuff): ‘Delay is the killer’ – why our OIA watchdog isn’t working
Andrea Vance (Stuff): Gagging the official information act: why new secrecy clauses are a worry
Andrea Vance (Stuff): Ombudsman raps police over ‘no surprises’ policy for Ministers
Lisa Woods (Stuff): Accountability, transparency are the victims of a flawed law
No Right Turn: Why we need an OIA review
Ella Somers (BusinessDesk): Transparency International, Council for Civil Liberties call for urgent stats bill amendments (paywalled)
Charlie Mitchell (Stuff): The Government has built a data colossus – is it playing with fire?
Phil Pennington (RNZ): Head in the clouds? Call for NZ to take control of data storage

MEDIA AND COMMUNICATION
Duncan Greive (Spinoff): The Te Puke Affair: How Morning Report saw a social media flub and smelled a cover-up
Mark Jennings (Newshub): TVNZ news boss a scapegoat in Santamaria affair
Damien Venuto (Herald): Kamahl Santamaria saga: Why TVNZ news boss Paul Yurisich had to go
Tom Dillane (Herald): The short turbulent tenure of Paul Yurisich as head of TVNZ news and current affairs (paywalled)
Stuff: The Kamahl Santamaria scandal at TVNZ, why it matters and what next
Herald: TVNZ’s Head of News Paul Yurisich who hired ex-Breakfast host Kamahl Santamaria resigns
Melanie Earley and Alison Mau (Stuff): Kamahl Santamaria scandal claims head of TVNZ news boss as review criticises hiring of key presenters
1News: TVNZ news boss quits after review finds failures recruiting Santamaria
Colin Peacock (RNZ): Criticism of mini-doco funding hits a dead end
André Chumko (Stuff): Warning over social media news proves new media entity needed ‘more than ever’
Sophie Cornish (Stuff): Social media giants agree to ‘first of its kind’ code of conduct in Aotearoa
Tova O’Brien (Today FM): It’s time for a Misinformation Minister
Tom Pullar-Strecker (Stuff): NZ code to tackle disinformation: what have Google and Meta really agreed to do?

RNZ-TVNZ MERGER
David Skipwith (Stuff): Conflict brewing ahead of TVNZ-RNZ merger over journalists promoting brands on social media
RNZ: New state broadcasting entity passes first hurdle
Dita De Boni (NBR): Nats rail against TVNZ/RNZ merger (paywalled)
RNZ: Public media legislation takes another step

IMMIGRATION AND BORDER:
Kelly Dennett (Stuff): New Zealand is fully reopening to the world, but how prepared are we?
Chris Hyde (Stuff): What will a near-fully reopened New Zealand look like?
Glenn McConnell (Stuff): The ‘Immigration Rebalance’: What it is and why it matters