TLDR: PM Jacinda Ardern nudged Aotearoa-NZ even closer to the western security alliance pushing back at China overnight. Ardern called in a speech at a NATO summit this morning for the alliance to stand firm against China’s newly assertive approach in the Pacific and again pointed to China’s human rights abuses. There’s more detail and analysis below the paywall fold and in the podcast above for paid subscribers.
Ardern’s comments at the summit early this morning came as the United States pledged to beef up its military forces in NATO and as NATO declared China’s “stated ambitions and coercive policies challenge our interests, security and values” in a new ‘Strategic Concept’ statement.
Elsewhere in the news here and overseas overnight and this morning:
US data showed a softening of estimated GDP in the March quarter amid growing signs inventories are building in US warehouses and tech sector job cuts are widening;
Xero’s small business data monitor out this morning shows another drop in Aotearoa-NZ’s small business activity in May as sales growth weakened and reported annual wage growth rose to 5.3% from 4.1% a year ago;
King Salmon is up for sale and being shopped around by investment bank Cameron and Partners, with Sealord and Sanford seen as potential buyers, The Australian-$$$’s Bridget Carter reported this morning;
Westpac has joined ANZ and ASB in suspending new high LVR mortgage lending Interest; and,
Auckland Council’s planning committee will vote today on whether to confirm the protection on ‘heritage’ grounds of one in four villas and bungalows in zones the Government wants intensified with three-storey townhouses and more apartments, NZ Herald-$$$’s Bernard Orsman reports.
I’ll be covering the first major speech of the Reserve Bank’s new Chief Economist Paul Conway, which is due at 11.30 am today and is due to focus on housing.
PM’s China warning at NATO
PM Jacinda Ardern is pushing ahead with tough talk aimed at China and moved overnight to drag Aotearoa-NZ closer to the western alliance strengthening its defences against China. NATO, in particular, has warned about China'’s increasing assertiveness overseas and is focusing much more closely on China’s human rights abuses inside its borders. So did Ardern in her speech notes here (bolding mine):
“In our neighbourhood we see the mounting pressure on the international rules-based order. We see attempts to disrupt and destabilise – even New Zealand is targeted by Russian mis & dis information.
“Separately China has in recent times also become more assertive and more willing to challenge international rules and norms.
“Here, we must respond to the actions we see. We must stand firm on the rules-based order, call for diplomatic engagement and speak out against human rights abuses at all times when and where we see them.” Jacinda Ardern in her comments to 2022 NATO summit in Madrid.
NATO itself was equally robust in its new strategy document published overnight, including these comments (bolding mine):
“The People’s Republic of China’s (PRC) stated ambitions and coercive policies challenge our interests, security and values. The PRC employs a broad range of political, economic and military tools to increase its global footprint and project power, while remaining opaque about its strategy, intentions and military build-up.
“The PRC’s malicious hybrid and cyber operations and its confrontational rhetoric and disinformation target Allies and harm Alliance security. The PRC seeks to control key technological and industrial sectors, critical infrastructure, and strategic materials and supply chains. It uses its economic leverage to create strategic dependencies and enhance its influence. It strives to subvert the rules-based international order, including in the space, cyber and maritime domains.
“The deepening strategic partnership between the People’s Republic of China and the Russian Federation and their mutually reinforcing attempts to undercut the rules-based international order run counter to our values and interests.”
NATO’s new 16-page ‘Strategic Concept’ document published last night as its leader’s summit in Madrid ended.
So what? - Bit by bit, Aotearoa-NZ is shifting its strategic and security footings closer to the US and EU-led alliance of western nations pushing back at what they see as Russia and China’s combined attempts to undermine democracy.
The problem is our trade footprint is much closer to China. So far, China has not singled us out too much as a competitor or combatant, as it has done with Australia. But the more our PM talks about these issues in such direct terms while standing shoulder to shoulder with western leaders, the greater the risks of a backlash.
It’s also a potential backlash NZ Inc is not ready for. Unlike in the 1960s when there was a combined and concerted effort to prepare for Britain’s entry into the European Union and the resulting loss of assured markets for our commodity exports, little has been done to diversify. If anything, our reliance on commodity exports to China has grown post-Covid as our services export sectors (tourism and international education) have withered and our exports of meat, dairy, fish, logs and wine to China has increased.
The cognitive dissonance is growing louder by the day. Perhaps understandably, the public have yet to hear what the ‘establishment’ within MFAT, NZTE and the wider export community are saying to each other behind closed doors. Talking about it in public would antagonise China even more.
But this can’t be a behind-closed-doors thing for long, especially if it is to sink into the public consciousness and particularly if a new Government, possibly as soon as late next year, is put on the spot.
I welcome comments and suggested and suggested lines of inquiry from paid subscribers below.
Chart of the day
Small business wage growth is surging
Number of the day
News subscriptions working
100,000 - NZME, the owner of the NZ Herald, has reported it has reached its planned milestone of having 100,000 digital-only subscriptions within three years of its premium service launch, thanks in part to its recent acquisition of BusinessDesk, BusinessDesk reported this morning. Subscribers to the physical newspaper also get free access to the digital service, which lifts total digital subscriber numbers to 155,000.
Quote of the day
Sabres rattling in Madrid
“We’re sending an unmistakable message, in my view — and I think yours as well — that NATO is strong, united, and the steps we’re taking during this summit are going to further augment our collective strength.
“To that end, today I’m announcing the United States will enhance our force posture in Europe and respond to the changed security environment, as well as strengthening our collective security.” US President Joe Biden speaking with NATO Secretary General at a press briefing in Madrid overnight (White House transcript)
Some fun things
Ka kite ano
Bernard
PS: I’m trying to keep these a bit shorter to get them out nice and early. Early birds and worms. Fresh is best.
Thursday’s Chorus: PM's China warning at NATO summit