I’m not a paid subscriber to David Farrar’s private, paywalled website Patreon where he provides political and polling analysis more detailed than on Kiwiblog, so I’m having to somewhat guess what his ideas are from Kiwiblog regulars who have read his Patreon piece, How New Zealand Should Respond To The Trade Wars.

However, the overall thrust of the advice appears to be that since the USA can no longer be trusted (…the decision by the United States to renege on all 21 trade agreements it has signed is terrible…) he proposes that we should get even closer to China than we already are with our Free Trade Agreement with them, signed almost a quarter century ago.

With that in mind readers might like to cast their minds back to November 2nd, 2020 when DPF outlined what he wanted for the Republican Party in the USA as they approached the 2020 election with President Trump in power:

It will surprise no-one that I want Trump to lose. I have made that clear over many years.

But I also want the Republican Party to lose the Senate and remain in the minority in the House. I say this, even though I will detest many of the policies a Biden Presidency could push through a Congress they control. And don’t even start me on the Judges.

Only if the outcome in 2020 results in stuff GOP officeholders and activists hate, will they learn the lesson. A Supreme Court packed with liberal judges. A huge tax hike. Democrat controlled state legislatures deciding congressional boundaries etc. The more it hurts, the more likely they will turn their back on Trump.

That was and is an utterly fucking insane desire.

Had that happened the result would have been a one-party America controlled by the Democrat Party, just as they control State shit holes like California, Illinois and Minnesota, and cities like San Francisco, Chicago, LA, Seattle, Portland, Minneapolis and now even New York.

A nation where any future GOP “victories” would thus be rendered meaningless since so much could not have been reversed, resulting in an endless series of tweedledee vs tweedledum elections while the nation declined.

All because he so hates Trump. This is a perfect example of Trump Derangement Syndrome (TDS): a willingness to cut your nose off to spite your face because democracy did not go his way, either inside the GOP or in the nation at large. And of course it’s now happened again, and with GOP majorities in the Senate and House.

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As a result we now have DPF’s advice on China, a nation that, as leftist journalist Matt Taibbi says, as he translates NPR’s similar advice, is:

A serial trade and human rights violator that with the help of decades of corrupt politicians from both parties polluted, price-dumped, and stole its way to a generation of American jobs and revenue, now owns so much of our debt that we must put up with its shit indefinitely. That’s the point of view of our own federal news agency. We have officially cucked ourselves past the point of no return.

A nation which has also broken major international treaties, since DPF is shocked by such:

On July 12, 2016, The Hague’s international arbitral tribunal, relying on the 1982 UN Convention on the Law of the Sea treaty (UNCLOS), issued a ruling supporting the Philippines’ claims that China had violated Filipino territory in the South China Sea by seizing islets and “sea features.” China had also plundered resources in the Philippines’ maritime Exclusive Economic Zone (EEZ).

Despite having signed the sea treaty (which meant accepting the arbitration process), the Chinese government callously ignored the verdict and disdained the court’s authority.

China’s blunt rejection of the decision stunned the Filipino government and alerted other nations on the Pacific Rim. The Beijing regime not only broke a major treaty it had ratified but also openly maligned legal procedures created to promote peaceful resolution of international disputes. 

I’ve covered much of the arguments about this here before, starting with a March 2020 post as the Covid pandemic cranked up and fights between China and other nations started over that, before they were suppressed, Trump was right about China:

Trump has been hammering the idea that the USA is too dependent upon China since the start of his campaign in 2015. I admit I rolled my eyes at this because he was saying the same thing about Japan back in the late 1980’s, and we know how that turned out. What most people have missed however is that Japan never had the sort of global geopolitical goals that the Chinese Communist Party has, nor did it ever appear to turn its economic links into international political leverage as the CCP has, with its One Belt One Road (OBOR) initiative being the most obvious.

That article lists numerous trade threats and actions on trade taken by China against the USA, Australia, Japan, the EU and other nations, long before the current blowups.

As I said back then, I supported our FTA with China as well as their accession to the WTO in 2001. The collapse of the USSR and its communist satellites just a decade earlier, plus China having given up on communist economics a decade before that, pointed to a non-communist future for China, if they were allowed to trade freely like a non-communist nation, thus growing wealthier, with that wealth pushing greater degrees of freedom.

It wasn’t like I was expecting a Jeffersonian democracy, or even some Parliamentary democracy like Japan’s. Even Asian democracies have had long periods of dominance by a single political party – Japan’s Liberal Democratic Party has been almost continuously in power since 1955 – so I hoped for something similar in China eventually. The imposition of two maximum terms for the CCP’s General Secretary position, thus limiting the chances of the usual communist cult-of-personality crap, fit nicely with this hopeful future.

There were reservations, but to paraphrase Leo McGarry from The West Wing, was not engagement with China better than Cold War II? I was hardly alone in these beliefs, as shown by Never Trumper, Andrew Sullivan in this piece from early 2020:

I remember the old debate from the 1990s about how to engage China, and the persuasiveness of those who believed that economic prosperity would lead to greater democracy. COVID-19 is the final reminder of how wrong they actually were.

Integrating a communist dictatorship into a democratic world economy is a mug’s game.

Exactly. The CCP hasn’t retained much communism but the world of the Marxist-Leninist politburo and three thousand years of massively centralised, technocratic government has fitted together nicely. Add to that the other traditional Chinese government aspect of The Mandate From Heaven – which Xi Jinping has embodied by trashing the two term limit and remaining as General Secretary now since 2012 – and regarding all other peoples as barbarians, and you’ve got yourself a very ambitious government that very much wants to be top dog in the world, supplanting the accursed Americans.

To that end the capitalist economy has been bent in the directions the CCP wants it to go, which just so happens to be what will support being the No 1 superpower in the world. It’s actually the old Socialist-Democrat dream of commanding the heights of the economy – in this case the world economy, via crucial areas such as production and control of key minerals and metals, steel production, aircraft (China is determined to beat Boeing and Airbus), pharmaceuticals (as America was shocked to find during the Covid lockdowns…

On March 4, 2020 an article titled “Be Bold: The World Owes China a Thank You”, was published in China’s state-run Xinhua news service and amidst all the usual propaganda tropes it noted that China has leverage over the U.S. and Europe because it can restrict the supply of medicines that have been outsourced to China. Specifically the USA could be “plunged into the mighty sea of coronavirus.”

Frankly I thought this was just the usual boasting bullshit one expects from Communists, but it turned out to be true.

Ultimately this would lead to high tech stuff like space technology and computers, especially silicon chips and AI. As a result of this strategy the CCP has targeted all these sectors to grow via exporting, with things like R&D, tax credits, indirect subsidies like cheap state loans, cutting rules and regulations where necessary, and of course protection from foreign competitors via tariffs and other tactics.

China’s IP (intellectual property) theft, according to an investigation led by Trade Representative Robert Lighthizer, is costing the U.S. “between $225 billion and $600 billion annually.” As far back as November 2015 The Office of the Director of National Intelligence reported that China’s hacking was costing U.S. companies $360 billion per year.

Finally, there is a military aspect to all this: it just so happens that those industries are crucial for building and supporting vast military capabilities. Shipbuilding depends on having a huge steel production industry, metal processing industry, and machinery manufacturing industry, and they’ve got all that. As a result, aside from the commercial shipping, China’s navy is already the world’s largest, and its shipbuilding capacity, estimated to be 230 times larger, dwarfs that of the U.S.

Such preponderance provides an important wartime advantage: one recent study concluded that larger fleets won 25 out of 28 historical wars. Like those historical combatants, China has the numbers to absorb more losses than the United States and keep fighting. In one recent set of wargames, China lost 52 major surface warships compared to between 7 and 20 U.S. equivalents. Even after such catastrophic losses, China still had more surface warships than the United States and was able to continue the naval battle.

China’s Ships Are Newer and its Shipyards More Productive

Despite recently pushing around commercial and coast guard ships from the Philippines and other smaller Indo-Pacific nations, I don’t think China is aiming to fight America. Those actions show she’s up for bullying her neighbours, but with bigger nations it’s all about deterrence. That will be crucial in the case of Taiwan, where China could win not with a bloody and messy invasion but by simply blockading the island. Blockades are an act of war but less obvious than outright attack, so China could defend itself pretty well militarily against American and Taiwan trying to link back together across the Pacific, and diplomatically against the rest of the world.

In summary it’s clear the idea that free trade would lead to a free society in China turned out to be wrong. Their Chinese Communist leadership simply used the wealth to build a 21st century military and security state the East German Stasi could only dream of.

That’s not something that New Zealand should be enabling further in any way, least of all by deepening the trade connections between our two countries. In fact we should be reducing our dependence on China for exports and imports, and as I pointed out in 2021 with the article, The spoon is long enough, we can, we’re not as dependent on them as people claim, as economist Michael Riddell argued:

One notable thing about New Zealand is that our trade isn’t very concentrated with any single other country/region (much less so than is the case for Australia). Total New Zealand exports to China, pre-Covid, were about 5 per cent of GDP.A severe and sustained recession in China would represent a significant (but cyclical) blow to the world economy, and to New Zealand – and would do so whether or not New Zealand firms traded much directly with PRC counterparts.

The world price for commodity products is determined by world demand and supply conditions, a point given far too little attention in the timid New Zealand discussion of PRC issues….China didn’t make us rich or poor. It made China first (last century) poor, and eventually middle-income.

Whatever the potential disruptions for individual firms – and they are real (for them) – it simply is not credible – given the (smallish) size of our total exports, the commodity nature of most, the share of trade with China – that any sort of conceivable economic coercion would represent a serious sustained threat to the New Zealand economy.

Not only that, but given China’s demographic problems, its recent very ordinary economic growth, debt, Covid-19 fallout causing a re-thinking of supply chains dependent on it, problems with neighbouring nations and so forth, it is a nation that we do not want to be strongly connected to in the future for purely economic reasons, let alone whatever political plans the CCP has.

All of this also does make me wonder about the National Party in general. I was talking to a friend the other night who has good contacts in National and he said they hate Trump over there to a degree that would astound our Lefty comrades. Add to that the China love they’ve exhibited over the years via MP’s like Jian Yang (A Glorious New Dawn Has Broken Over Our Harmonious Society) and I can see DPF’s arguments gaining traction inside the Party.

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See also:
The spoon is long enough (May 2021)
Trump was right about China (March 2020) – Also the original article on the old Blogger platform shows some interesting commentary.
Dark Clouds cannot hide the light of the Sun (Thoughts from Labour’s China MP).