Thursday, 30 September 2021 08:55

Editorial: Who will we back, US or China?

Written by  Staff Reporters
Prime Minister Jacinda Ardern's government faces a tricky balancing act between the US and China. Prime Minister Jacinda Ardern's government faces a tricky balancing act between the US and China.

OPINION: When it comes to hedging between the world's two superpowers, the US and China, no one does it better than the New Zealand Government.

To the US, Prime Minister Jacinda Ardern has committed to upholding democratic values and human rights; to China she is committing to mutually beneficial trade ties.

And all along, Ardern has faced a tricky balancing act maintaining New Zealand's trade relationship with China, while not seeming to support a government accused of human rights violations. China continues to receive the largest share of New Zealand exports: in June 2021, China received 44% of New Zealand's dairy, according to Stats NZ. Milk powder, butter and cheese made up bulk of exports.

But things are evolving on the global stage and Wellington's policy of appeasing both Washington and Beijing, without stepping on the toes of either, is irking some players.

This month, the US, Australia and the UK (without NZ) announced a major security deal that will see the US and UK assist Australia in acquiring nuclear-powered submarines, which will allow Australia's navy to help counter Chinese nuclear-powered vessels in the region.

China has unsurprisingly denounced the deal and its rocky relationship with Australia has almost hit rock bottom.

China is Australia's largest two-way trading partner, but things aren't cosy since Beijing slapped tariffs on more than $20 billion worth of exports including Australian barley, wine, cotton, coal, and beef.

China is also New Zealand's largest export market, buying almost $17 billion of goods annually.

The NZ/China free trade agreement, updated earlier this year, means all safeguard tariffs in dairy are set to be eliminated within one year for most products, and three years for milk powder. This means that by 1 January 2024, all New Zealand dairy exports to China will be tariff free.

In the coming months, the spat between Australia and China will grow bigger and NZ will come under increasing pressure from both sides not to be seen supporting the other.

So how will NZ react? Perhaps it's a good time to relook at what Agriculture Minister Damien O’Connor said in an interview earlier this year: “I can’t speak for Australia and the way it runs its diplomatic relationships, but clearly if they were to follow us, show respect, and speak with a little more diplomacy from time-to-time and be conscious with wording, than they too could be in a similar situation.”

It seems NZ’s trade ties with China will prevail, which should be good news for the dairy sector.

More like this

Editorial: NZ's great China move

OPINION: The New Zealand red meat sector, with support from the Government, has upped the ante to retain and expand its niche in the valuable Chinese market - and the signs are looking positive.

Positive vibes from China

Silver Fern Farms chief executive Dan Boulton says his recent visit to China has left him feeling optimistic about the situation there for the meat industry.

Editorial: Keep FTAs coming

OPINION: The dairy industry will  be a major beneficiary of a new free trade deal between NZ and the Gulf Co-operation Council (GCC).

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

National

OSPRI's costly software upgrade

Animal disease management agency OSPRI has announced sweeping governance changes as it seeks to recover from the expensive failure of…

Machinery & Products

BA Pumps expand

Cambridge based BA Pumps & Sprayers, specialists in New Zealand-made spraying equipment, has acquired Tokoroa Engineering’s product range, including the…

Entries open for innovation award

Fieldays and its renowned Innovation Awards are celebrating their 57th year, marking a longstanding tradition in the agricultural calendar, with…

» Latest Print Issues Online

Milking It

Chinese strategy

OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.

Not fair

OPINION: The Listener's latest piece on winter grazing among Southland dairy farmers leaves much to be desired.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter