New Zealand between America and China: John McKinnon argues that we need to recognise the nature of Sino-American competition and understand our ability to shape events within this framework.

• Author: McKinnon, John
• Position: Report

The United States and China, the two dominant powers of the Asia-Pacific region, have been managing their mutual relationship with some success since 1972. China's economic growth in recent decades has enormously strengthened its position. The United States has stated that it will remain in the region and it has the wherewithal to do so. Co-operation and competition will be equally present in this relationship. New Zealand has good relations with both countries. Neither containment nor exclusion benefits us. Rather, our interests and values are served best by a constructive relationship between the two powers. We can assist this through our bilateral relations and through participation with those countries and others in regional and multilateral organisations.

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The Asia-Pacific region in which New Zealand is situated is diverse, with a large number of countries, with multiple linkages between them and many more beyond. Yet in recent years it has become commonplace to speak of the dominance of the region by two great powers, the established power of the United States and the rising power of China, to the extent that to some analysts this is the only significant reality in the region. Is that so? And if it is what would that mean for New Zealand's future? Will we be caught up in a titanic power struggle, the likes of which we have not seen since the Cold War, but which, unlike the Cold War, may force us to make uncomfortable choices? Is some other form of hegemony possible? Or, as this article argues, is the competition between China and the United States one that we have to recognise and understand, but within which there is more scope for others to shape events than some analyses might suggest?

Let us begin in 1978. Two significant events occurred in the last month of that year. On 15 December the United States and China announced the establishment of full diplomatic relations. And on 22 December the 3rd Plenum of the 11th Central Committee of the Chinese Communist Party announced the policy, which soon was characterised as 'reform and opening up' and which heralded the return yet again of Deng Xiaoping to high office in Beijing.

Both decisions built on the past but both were wrenching. The establishment of diplomatic relations between China and the United States, the logical but not the automatic culmination of the actions taken by Nixon and Kissinger in 1971-72, constituted the closure of over 20 years of hostility between the two governments. Nixon, whose anti-communist credentials were second to none, could take that step, confident that his new friends in Beijing, despite being communists themselves, shared his hostility to the Soviet Union. The further step taken by Carter, which required the United States to sever its political relationship with Taiwan, was painful to many both there and in the United States. Nevertheless the decision was not reversed by Reagan when he came to office two years later, although he did negotiate a third communique with Beijing which inter alia addressed the question of US support for Taiwan by way of arms sales. The three communiques still stand as the framework of US-China relations.

The decisions of the 3rd Plenum bore some resemblance to the direction of Chinese policy in the 1950s, before the Great Leap Forward and the Cultural Revolution wreaked havoc on the political and social landscape of China. They also stood in a longer tradition: since the late 19th century Chinese officials and intellectuals had grappled with how China should respond to the impact of the West. Westerners in China, unlike any previous group which China had encountered, had proved impervious to the attractions of civilisation as embodied in the Qing empire. China had investigated and even pursued many different policies in the years between 1898 and 1978. All had been directed at restoring Chinas wealth and thus its power, and thereby giving China the wherewithal to safeguard and advance its interests. None had succeeded.

Decisive change

In embarking on the policy of reform and opening up, Deng Xiaoping assessed that economic integration with the rest of the world would serve Chinas purposes better than isolation. Even Deng himself probably never imagined how correct his assessment would be. The trajectory is too well known to need repeating. Let it simply be said that China is now the major trading partner of most countries of the world and its economy is likely to exceed in size that of the United States in the next 20 years. China faces significant challenges in the years ahead: its average per capita income is still low and actual per capita incomes vary hugely by both location and occupation. But while these facts will shape Chinas future they are unlikely to diminish the key role it will play in the global economy and in world affairs more generally by virtue of its economic clout and the military capability that goes with it.

In both decisions there was a reservation. Nixon and Carter opened relations with China despite it being a communist country with a very different political culture and system from that of the United States and despite the requirement to forsake Taiwan. Deng Xiaoping in embracing modernisation of agriculture, industry, agriculture, national defence, and science and technology, at no time included changes to the political system in his agenda. Reform and opening up was about enabling the People's Republic of China to flourish as a state led by the Communist Party, and not otherwise, as demonstrated by the dosing down of 'democracy wall' not long after the 3rd Plenum.

New Zealand benefitted from both decisions. The rapprochement between Washington and Beijing paved the way for the establishment of diplomatic relations between New Zealand and China. And Deng's policy of reform and opening up was to make China over the years an immensely more valuable economic partner for New Zealand than it could ever have been in 1972.

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