Yikes. First Rob Campbell, now Steve Maharey. It seems we are going to fire – or expect public self-flagellation –from every chair of a Crown agency that ever dares to express a “political” opinion about a serious policy matter. What does that say about the maturity of our public discourse?

IMO, it is an insult to the public to suggest that we would be shocked – shocked! - and lose our faith in public institutions if we read somewhere that Steve Maharey says he doesn’t think much of the National Party’s track record of positive innovation.

Most of us who knew Steve Maharey before he became a political virgin again would remember that he used to be a Cabinet Minister in a centre-left party. It was therefore not surprising that he should express negative views of the centre-right in a newspaper column labelled “Opinion.” Do we really want to sacrifice free speech in the name of a political convention whose cultural justification ended – in effect - with the passing of a State Sector Act in 1988 that enabled the politicisation of senior public service appointments?

Most members of the public are grown-ups. They expect that people can voice a political opinion while still going to work and doing their job in a fair and competent fashion. Most of us do it every day. Steve Maharey has done it for decades. It has been embarrassing to watch him have to indulge in the kind of public self-criticism that we normally associate with authoritarian regimes, in order to keep his job. Campbell did not recant, and so he remains cast into the outer darkness.

To repeat: The fiction of political neutrality does not really serve the public. It mainly serves the politicians of both major parties who share a vested interest in the muzzling of political discourse. If it didn’t exist, not everyone in the upper echelons of the public service would choose to go public. But, on occasions, we would all benefit if senior, experienced heads of Crown agencies could be allowed to defend in a forthright fashion the foundation principles – in Campbell’s case, co-governance – of the organisations they lead. Tellingly, few have disputed the truth of what Campbell said. His sin, allegedly, was in saying it out loud.

Using the trade weapon

Clearly, the first victim in the current Cold War against China has been free trade. As the US ramps up its trade war with China, it is becoming harder for countries like New Zealand (and Australia) to remain best friends with China on trade, and best friends with the United States on defence and security. Through gritted teeth, the US says it understands our dilemma. But look at it from their perspective. Can an ally reluctant to confront the mortal peril posed by TikTok really be relied on, should push ever come to shove in the South China Sea?

Within the Five Eyes security talks, the pressure that was initially exerted on the partners to show a common front against Huawei, is now being extended to a whole barrage of Chinese companies that the US has deemed to pose a mortal threat to its national interests.

Really? The tricky thing about is that the US could just be (a) seeking a trade advantage for US firms against their Chinese rivals and (b) seeking to deter China from pouring ammunition and weapons into Russia’s faltering war efforts in Ukraine and (c) seeking to hobble China’s economic modernisation, full stop. Or all of the above.

The sense that the US has been using security and foreign policy concerns as a trade weapon goes all the way back to the attacks on Huawei. There was always a lack of credible evidence about Huawei’s wrong-doing beyond the fact that Huawei is Chinese, and its products were cheaper and better than anything that Dell Technology and other US forms could produce for the global market.

In fact, if you look at the 28 Chinese firms that were recently added by the US to their “Entity List” of firms subject to US trade restrictions on security and foreign policy grounds they include – for example – the microprocessor firm Loongson, the server maker Inspur Group Co, and the subsidiaries or genetics firm BGI.

As Bloomberg News recently pointed out, some of this is about countering the threat of competition:

Loongson is considered a potential alternative in the future for Intel Corp. chips, while Inspur competes directly with servers made by the likes of HP Inc. and Dell Technologies Inc. Another company cited is 4Paradigm Technology Co., an up-and-coming AI unicorn backed by some of the world’s biggest investors including Sequoia Capital, Goldman Sachs Group Inc. and Mubadala Investment Co. The US also added Chinese agencies such as the National Research Centre for Parallel Computer Engineering and Technology and the Wuxi Institute of Advanced Technology.

To be fair, Loongson is indeed a supplier of services essential to the upgrade of China’s military efforts:

China itself already confirmed that its defense forces are using Loongson chips and the company’s LoongArch microarchitecture…

However, there’s also nothing new about the fact that the product development carried out by a commercial company should also be an integral part of a nation’s military efforts. (Think Lockheed Martin, Boeing etc.) Also think of Inspur’s US trade rival Dell Technologies, whose company brochure makes quite a virtue out of Dell’s enhancement of the US capacity for military force projection.

In effect, US companies are banned from exporting to the Chinese companies on the “Entity” blacklist without prior US government approval. Good luck with getting that. As Bloomberg News adds:

The sanctions that cover Inspur are similar to those imposed on Huawei Technologies Co., and apply to US shipments as well as foreign-made items produced with US-origin tools or technology, which effectively means all semiconductors on the planet are covered…

Finally, there is a human rights dimension to the growth in trade restrictions on security grounds that the US is imposing on China:

In 2020… Beijing Liuhe BGI and Xinjiang Silk Road BGI, were among 11 Chinese companies added to the US Commerce Department’s entity list over their alleged implication in human rights abuses in Xinjiang… Overall, the Commerce Department cited 18 entities in China for allegedly supporting the country’s military, 14 entities in China and Pakistan for work on ballistic missile programs, six entities in China and Burma for alleged human rights violations and three entities in Russia, Belarus and Taiwan for supporting Russia’s military.

While the world abhors China’s genocidal actions in Xinjiang, in this instance the US is the pot calling the kettle black. As the world’s biggest arms dealer, the US routinely sells its weaponry and civilian control technology to terrible regimes in Saudi Arabia, Egypt etc that systematically violate human rights.

Our (shrinking) room to move

In addition to the above, China has in the past month moved closer to Russia and Iran, reportedly – for instance – by replenishing Russia’s dwindling supplies of ammunition. As we increase our involvement in Ukraine, it is going to be increasingly difficult to - at the same time - avoid criticising China’s role in keeping Russia’s war machine fighting fit for purpose. Especially if, as Foreign Policy magazine recently suggested, China has a keen interest in treating Ukraine as a testing ground for its own invasion of Taiwan, and in weighing the likely duration of significant Western solidarity against such a move. If China did invade Taiwan, would we boycott trade with China in protest and in solidarity with the brave Taiwanese? Hardly. Not for long.

In the meantime, New Zealand has been dutifully lining up on defence and security matters with the US and our traditional allies for quite some time – including with less traditional allies like Japan. Some observers think that the extent and the pace of this involvement has increased under the Hipkins administration. Our allies will be looking to the May Budget to see what extra defence spending New Zealand can still manage to set aside, even while the government is supposedly focussed upon those ‘bread and butter’ issues at home.

Reportedly, the US is already asking its allies to join in with its trade sanctions against China. How long then, will the US tolerate our trade dalliances with China, and how long will China tolerate our deepening involvement in what it sees to be a hostile alliance lining up against it, before retaliating? It would be surprising if China does not try – at some point - to exploit our vulnerability on the trade front.

Meanwhile, and in a “dog not barking” sense… The relative silence from our usual free trade champions (Charles Finny etc) about the ways security and human rights concerns are being used to erect trade barriers has been striking. Elsewhere, even conservative think tanks like the CSIS have recently begun treating the weaponisation of trade as a dangerous trend.

Footnote: As an exporter of farm products, New Zealand has a lot in common with agricultural producers in North America, much as we may resent the extent of their government subsidies. Weirdly, an editorial I saw last week in the local Storm Lake, Iowa newspaper will ring a bell with any New Zealand farmers who may feeling a bit worried about the fusion of agricultural trade policy with defence policy:

A lot of politicians are piling on China these days, some for good reason and others just looking to pick a fight in perilous times. Food is not best used as a weapon. Our agricultural trade policy should foster prosperity and cooperation, and not be a source of provocation.

And furthermore, the scribe of Storm Lake says:

It makes sense for the United States to protect national security by re-shoring critical industries like computer semi-conductors. We should protect ourselves from Chinese cybercrime. We should support Taiwan and advocate for Hong Kong. But we don’t want to stumble into conflict just for its sake. When the CIA tells you that China is doing this or that with Russia, take it with a grain of salt. Statements of top-secret intelligence are made public for a reason…

Trade is always inviting to politicians wishing to make a point because it sits so enticingly right there in between diplomacy and going to war. It offers more than an outraged press release, but is less risky than putting one’s troops in harm’s way. Again, the Storm Lake editorial makes good horse sense:

Staying grounded in a pragmatic food and agriculture trade policy with China is important for U.S. agriculture, for hungry people, and to maintain the peace. It’s important for the Amazon rain forest that the U.S. [and New Zealand] can be counted on as a reliable provider of agricultural commodities — if we start another trade war, China will simply order up more acres in Brazil.

Besides, as the editorial concludes, trade wars have a habit of turning into shooting wars.

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