Pick your poison.

datePosted on 13:37, June 12th, 2018 by Pablo

Two decades ago New Zealand uncoupled the security and trade strands in its foreign policy. The decision stemmed from the removal of New Zealand’s preferential trade status with the UK in the early 1970s and the fallout to the embrace of a non-nuclear status in 1985, which led to the dissolution of the Australia-New Zealand-US military alliance (ANZUS). With the end of the Cold War, New Zealand foreign policy elites decided that one of the cornerstones of foreign policy in the tight bipolar world that dominated international affairs from 1945 to 1990, issue linkage between security allies who trade preferentially with each other, no longer applied to the conduct of its international relations and that placing the trade and security “eggs “of foreign policy in different baskets better ensured independence and autonomy in international affairs.

Over the next twenty years New Zealand shifted its trade orientation to non-traditional partners in Asia, Latin America and the Middle East while slowly re-establishing its security ties with its traditional Anglophone allies. The latter trend was accentuated after 9/11 but did not slow the pursuit of preferential trade agreements with new markets, China in particular. In fact, New Zealand signed the first bilateral free trade agreement (FTA) between a Western democracy and the PRC in 2008, and within a few short years China has become New Zealand’s second largest trading partner (after Australia), supplanting both the EU and the US in that regard.

In parallel, New Zealand joined the US-led “war on terror” (sic) by deploying troops to Afghanistan from 2001 to the present (now in a diminished role), Iraq 2003-2013 and Iraq and Syria from 2015 to the present. It signed the bilateral Wellington (2010) and and Washington (2012) Declarations that made it a first tier defense partner of the US, and it has strengthened its intelligence ties with the Anglophone partners in the 5 Eyes signals intelligence network as well as upgraded liaison relations between its human intelligence agency, the Security Intelligence Service (SIS) and Western counterparts such as ASIO (Australia), the CIA (US), DGSE (France) and others.

The trouble with the “eggs in different baskets” approach is that it assumes that a balance of power can be maintained and ignores the possibility of conflict between major trade and security partners. The guiding principle of issue linkage was that security and trade partners trusted and did not conflict with each other. Conflict was limited to between alliance systems. Uncoupling of security and trade linkages consequently raises the possibility of conflict between competing security and trade partners, something that makes the delinked stance more akin to straddling a barbed wire fence while standing on ice blocks than balancing between competing interests.

The situation is made worse for small states trying to remain neutral between competing great powers. That situation, described by Thucydides in the History of the Peloponnesian Wars when recounting the siege of Melos and its attempts to skirt the conflict between Athens and Sparta,occurs when a small state is forced to choose between two great power rivals. Although the Spartans accepted its neutrality, Melos refused Athenian demands to swear fealty and as a result was starved, invaded, ransacked, its men killed and its women and children taken prisoner.

Mutatis mutandis, this is increasingly likely to be the dilemma posed to New Zealand as a resulted of its bifurcated foreign policy. China and the US are on a collision course across a range of strategic issues, including security and trade, as the jockey for dominance in the Western Pacific. Chinese militarisation of artificial islands in the South China Sea and its claims to sovereignty over that entire water space (and territories claimed by five neighboring states), coupled with its aggressive use of “checkbook diplomacy” to win friends in and influence the foreign policies of Pacific Island nations, added to its rapid naval expansion and power projection into the blue waters of the Western Pacific have been met with a US “pivot to Asia” and a shifting of US military assets to the Pacific theater. The Chinese have tied their military expansionism in part to the “One Belt One Road” trade initiative that seeks to extend China’s trade influence across continents (combining the old land-based Silk Road routes with a Maritime Silk Road linking Southern China and East Africa with ports in between). It also has a naval strategy—the “chain of pearls” strategy– premised on moving beyond defence of what it considers to be its inshore seas (such as the South and East Asian Seas) and into the Indian and Pacific oceans where it can self-guarantee maritime security in its sea lanes of communication.

Under Donald Trump’s presidency the US has retrenched economically, abandoning free trade pacts such as the Transpacific Partnership in favor of an economic nationalist strategy premised on protective tariffs and bilateral trade agreements. It has turned its back on much of the rules-based liberal world order crafted over the past sixty years in favor of a unilateralist diplomatic approach heavily grounded in aggressive military re-assertion in contested areas. It has also abandoned issue-linkage between trade and security with ertswhile allies except to use “national security” as an excuse to gut extant trade pacts (as the most recent G7 fiasco demonstrates).

The combination of economic nationalism and military-led diplomacy raises the possibility of open conflict with power contenders disinclined to bend to US demands. More broadly, the transition from the Cold War to the unipolar world in which the US was undisputed hegemon has now been followed by the rise of a contentious multipolar order in which rising and re-assertive powers contest US leadership in world affairs, China and Russia especially. Since conflict serves as a systems regulator during transitional international moments and because old alliance systems are under siege and new “power blocs” are being created, the likelihood that conflict will break out between ascendent and descendent powers as they jockey for supremacy in the new world order has increased markedly.

The jostling for position has many manifestations. One of them is the contest for influence in non-aligned and uncommitted states. Because of its bifurcated foreign policy New Zealand is seen as one such state by China, and recent controversies about PRC “influence operations” in Aotearoa parallel similar debates about the extent of Chinese “soft” subversion in the political and economic systems of Australia, Canada and several African and Latin American states. In fact, there is enough backlash throughout the Five Eyes network about PRC use of front organizations and other “magical weapons” (including corrupt inducements to key actors) so as to have it rated as a threat as grave over the long-term as espionage and other intelligence collection activities conducted by the Chinese. They are seen as more pernicious than Western influence activities such as educational and cultural exchanges, etc. because they are more directly focused on influencing political and economic outcomes in ways favorable to the PRC and are designed to support (and are in fact closely linked to) the authoritarian policies of the Chinese Communist Party at home and abroad.

The result is a growing ideological battle between the PRC and New Zealand’s Western allies, particularly the US and Australia, over the future direction of the country. On the one hand, the Chinese presence in New Zealand has been materially beneficial. But that has come with strings attached that are believed to compromise the integrity of New Zealand institutions. For its their part, New Zealand’s Anglophone orientation has not paid similar material dividends in recent times even though it gives it a seat at the table in security meetings with its traditional partners. And although Western influence in New Zealand has been benign due to shared values and cultural norms, the record of the the US when confronting democracies that stray from their preferred political and economic approaches demonstrates that there is a dark side to their influence as well (one only need think of US subversion of the Whitlam government in Australia and record in Latin America to get a sense of this).

New Zealand consequently finds itself caught on the horns of an impending dilemma: if push comes to shove between China and the US, which side should it choose? Even if the great power conflict is economic and diplomatic rather than military, it will be forced to choose within the next decade or so because New Zealand is too deeply tied to both countries to play the balancing game once the great power rivalry erupts into open conflict. The question is therefore not a matter of if but of when and for/against who?

There will be significant costs to whatever choice is made. Should New Zealand choose China (as a rising great power), it will lose the security umbrella and suffer the diplomatic wrath of its most traditional and closest international partners. The consequences will be felt in a loss of trade and diplomatic ostracism, but most acutely in security relations with other Western democracies. The Five Eyes listening posts in New Zealand will be dismantled and all of the highly sensitive equipment, to say nothing of archived records and stored data, will be removed under duress. This could well cause a revolt within the New Zealand intelligence community given its Anglophone orientation and when coupled with “dark” influence operations could prompt civil unrest amongst those disinclined to cast their lot with the Chinese. It could even prompt covert and overt hostile responses from the jilted partners, who will likely discontinue military relations with New Zealand, including sale and supply of equipment. There will be a moment of national crisis.

Should New Zealand opt to side with the US and its security allies in any future conflict with China, it will suffer serious economic losses as a result of Chinese retaliation. This has already been presaged by the Chinese response to New Zealand’s support for the International Court of Arbitration’s ruling in favor of the Philippines in its dispute with China over island-building in contested waters, where New Zealand goods were held up in port and CCP-controlled media editorials warned New Zealand over the consequences of siding against China in future disputes.

Given that the New Zealand economy is highly dependent on agricultural and other primary good exports to China as well as tourism and students from it, the economic costs of losing the Chinese market will not be balanced by increasing trade elsewhere or recruiting tourists and students from other countries. That includes trade with the European Union with or without Great Britain, particularly if New Zealand persists in negotiating a bilateral FTA with Russia in the face of EU sanctions against it. No other export market can compensate for the loss of China, and since New Zealand does not have enough value-added exports or a domestic service sector that can take up the slack, and because its tourism and foreign student markets have been framed around preferential treatment for Chinese (e.g. via special visa schemes), it is bound to suffer a severe economic downturn should its choice go against the PRC.

The PRC will also use its deeply embedded influence assets to sow discord within the Chinese expat community and within the power circles that it has penetrated. That could add to the general unrest caused by the turn away from such an economic powerhouse and benefactor. It will undoubtably use diplomatic as well as economic and perhaps even covert and overt hostile means to punish New Zealand and hurt its interests (say, by abandoning fishery and other conservation schemes in the South Pacific and using naval assets to protect its commercial fleet from foreign law enforcement). This list of retaliatory measures is long and the means by which they are delivered powerful.

So what could precipitate the forced choice? Consider the following scenarios which, if not exhaustive or immediate, are definitely within the realm of the plausible:

1. China continues to demand that New Zealand renounce its participation in the multinational naval conducting freedom of navigation and safe passage exercises in the disputed waters of the South China Sea. When New Zealand refuses to do so and send a ship on patrol just outside the 12 mile territorial limit claimed by the Chinese around, say, the Spratly Islands, the Chinese respond by suspending all agricultural imports from New Zealand for six months. New Zealand exporters go crazy over the loss of income and the government is pressured to give in to the Chinese demand; or, the government refuses to give in to the demand and a subsequent patrol by a New Zealand frigate is hit by an anti-ship missile fired from the Spratlys**. Several sailors are killed and the ship is crippled and towed into Chinese claimed waters and held until apologies are given for its “intrusion” and “provocation.” What then?

2. The Chinese announce the signing of a forward basing agreement with Fiji in which a deep water berthing complex, a 14,000 foot runway and facilities for a division’s worth of troops will be constructed near Suva. Soon after that the Russians announce that they have made a deal with the Chinese to rotate expeditionary forces through the base for tropical warfare training. Australia, France, the UK and US denounce the move as unacceptable. What does New Zealand do?

3. Australia and the US announce the uncovering of a Chinese espionage ring in the South Pacific. It includes several Chinese individuals, including dual nationals, in New Zealand. These are diplomats, students, business people and front agencies engaged in both intelligence gathering and subversive activities that extend into the Beehive and security bureaucracies. The allies call for the closure of Chinese diplomatic facilities and the expulsion of diplomats identified in the sweep and the arrest of those without diplomatic immunity on spying charges, including the possibility of their extradition to the US because of attempts to penetrate the Five Eyes listening posts and other sensitive sites in which the US has a presence. How does New Zealand respond?

4. The US imposes redoubled tariffs on New Zealand exports because it refuses to raise its defense spending to 2 percent of GDP and permit US pharmaceutical and IT companies to extend the lifetime of monopoly patents and proprietary intellectual property rights in New Zealand. It demands New Zealand take a more adversarial stance against China in regional and international fora and reinforces its position by restricting intelligence flows and military-to-military contacts within 5 Eyes and between the two countries, including a cut off of US Air Force resupply flights to NZ Antarctic bases from Christchurch.

Strategic planners in Wellington may not like to ponder these unpalatable scenarios and the unpleasant consequences that a forced choice entails regardless of the nature of the decision. But given the way great power rivalries are playing our at present, they need to consider the possibility that the time will come when the “eggs in different baskets” approach is proven detrimental to the national well-being and a choice between great power poisons has to be considered.

** Less readers think this scenario far-fetched, be aware that it would demonstrate Chinese resolve to defend its self-proclaimed territories knowing that New Zealand’s larger security partners will not risk war over an attack on the “weakest link,” in the multinational naval coalition, especially given New Zealand’s seeming reluctance to denounce Chinese norm violations in the region. That will force a diplomatic resolution, which itself is a victory for the PRC.

31 Responses to “Pick your poison.”

  1. Sanctuary on June 13th, 2018 at 07:30

    “…if push comes to shove between China and the US, which side should it choose..?”

    The question assumes we have a choice.

    It is impossible to imagine a scenario where NZ would stand by while Australia fought a serious conflict in the Pacific. Australia is (assuming Trump doesn’t fuck it up) a bedrock US ally. To that extent, the decision would be made for us in Canberra.

    Let’s look at your scenarios…

    1 – We would probably give in to Chinese demands, then retreat to a state of total denial and pretend it never happened. What we should do is give in to Chinese demands and treat it as a Munich moment wake up call and spend the next decade re-aligning our trading partners as much as possible while arming ourselves to the teeth for the inevitable round two, when we’d be ready with our allies.

    2 – We’d probably do nothing in public, whilst allowing every assistance to the inevitable US/Australian invasion to replace the Fijian government with one more democratic and freedom loving (/sarc), then offer “peacekeeping” troops as part of the occupation force. Then we would retreat to a state of total denial and do nothing else. What we should do is pretty much the same, except we should make clear that we support the invasion and formulate, with Canberra, a sort of South-West Pacific Munroe doctrine. To that end, we should build up our armed forces to take part alongside the Australians in such interventions if the USA can’t/won’t take part.

    3 – Hard to tell. A full blown spy scandal though would probably see decisive action.

    4 – We would probably cave to US demands then retreat to a state of total denial and do nothing else. What we should do is give in to US demands and treat it as a Munich moment wake up call and spend the next decade re-aligning our trading partners as much as possible while arming ourselves to the teeth for the inevitable alliance rupture and requirement to go it alone as an armed neutral in the South West Pacific.

    I have an additional scenario based on my own observations of the behaviour of the local Chinese community, which largely remains totally loyal to Beijing. It starts out the same as 3. –

    So, my question:

    5 – Australia and the US announce the uncovering of a Chinese espionage ring in the South Pacific. China denounces the accusations as racist. It uses it’s control of the local Chinese media and agent-provocateurs to organise demonstrations that quickly become riots through the streets of inner city Auckland with a level of violence the police are ill-equipped to contain. Vigilante groups of Pakeha and Pacific Islanders take to the street to support the police and Chinese businesses and people are targeted. Beijing demands the right to send troops to protect Chinese citizens. What do we do?

  2. Sanctuary on June 13th, 2018 at 07:37

    One thing just occurred to me. All my scenarios above require bigger armed forces to give us more options beyond abject surrender followed by amnesia. The thing is, the intellectual leap of imagination for the change in force structure required for such a realignment of our strategic goals is probably completely beyond the ability of our teeny military. It would require a revolutionary shake up of our defense forces. How do you shake up a defense force which is as isolated from mainstream society and whose strategic thinking is as reactionary as ours?

  3. Erewhon on June 13th, 2018 at 09:56

    Hi Pablo

    Have you ever considered expanding one or more of these scenarios into a what-if novel?

  4. Pablo on June 13th, 2018 at 10:05

    Erewhon:

    Not really. I lack the imagination to go full novelesque on such scenarios. My point here is mixed but includes noting how path dependency, that is, how one decision sets off a chain of events that can lead in unexpected directions and outcomes, may well come back to bite NZ foreign policy elites. What seems like a good idea in the 1990s–uncoupling security from trade–may not be so appealing now that externalities in the form of a different international context have intruded on the idea.

    In another life I used to be part of what was called a Net Assessment team comprised of regional and subject analysis who gathered once a week to discuss trends and future scenarios, many of them worse case. We took all the intel, diplomatic, economic and military streams pertinent to our respective portfolios and formulated scenarios, which we then offered for review to the other team members (so I did Latin America and in return got to review other regional scenarios). It was a good exercise of the imagination and allowed for some out of the box thinking about contingencies. I can only hope something similar happens here, perhaps in the NAB if not MFAT itself.

  5. Erewhon on June 13th, 2018 at 11:05

    Perhaps there is a potential for a co-authorship project, where you provide the geographic/political/strategic insight and somebody else rounds it out with prose, characterisation etc etc?

    Don’t worry, I’m not volunteering myself…

  6. Barbara Matthews on June 13th, 2018 at 13:42

    Rather off topic (all a bit scary) but what do you think about Trump trying to bring Russia back into the fold? Is he being self preserving, cunning or clever? How goes Russia plus US v China? Or the reverse?
    Barbara Matthews.

  7. Pablo on June 13th, 2018 at 15:33

    Barbara:

    Trump is not trying to bring Russia ‘back into the fold.” Not only was Russia never in the fold but Trump’s affection for Putin is due in part to the leverage Putin has on him and in part due to his admiration of “strong” leaders unencumbered by the strictures of democratic checks and balances. Plus, he and Steve Bannon believe that Russia is one of the last bastions of white culture that needs to be defended against the brown non-Christian hordes.

    Russia and China are in a tactical alliance where they join to help oppose and weaken the US in particular and West in general. The demise of the liberal internationalist world order helps both of them assert supremacy as rising and re-emergent great powers bent on re-casting the international system in a light more favorable to their dispositions and interests. Trump is doing his level best to help them in this quest.

  8. Stephen on June 13th, 2018 at 15:41

    For an extension of some “what if” scenarios, have a look at Gwynne Dyer’s Climate Wars.

  9. Barbara Matthews on June 13th, 2018 at 16:08

    Thanks, I like your Bannon related “last bastions of white culture to be defended against the brown non-Christian hordes!” Two less Christian or barely human people than Bannon and Trump would be hard to find. You do have a talent for language – a novel is not beyond you, but I guess that is not your interest.
    Barbara Matthews.

  10. Pablo on June 13th, 2018 at 16:27

    Barbara:

    The reality that we live in is stranger than any fiction that I could hope to write. OTH, perhaps I could get into some of that magical realism type of approach, which would suit the moment quite well.

  11. Barbara Matthews on June 13th, 2018 at 22:09

    A very suitable genre choice for a South American!

  12. James Green on June 14th, 2018 at 17:10

    Your basis for the choice of two poisons is wrong. We don’t have to pick either. There are more than enough other countries out there that we could do better without either China or the US as allies. We are overly dependent on both at the moment, as you outline, but that doesn’t mean we always have to be.

    And NZ isn’t Melos; Taiwan is Melos; NZ is Bosporus.

    Another point: when has the US, or even Europe for that matter, ever been interested in trading fairly with NZ? Maybe if the US, EU, and Japan want us to criticise China more loudly they should stop trying to prevent us selling food to them. (To be clear I think we should be criticising China a lot more than we are anyway.)

    Personally I think a multipolar world is better than the unipolar one we are exiting and the bipolar one before that.

  13. Pablo on June 15th, 2018 at 16:53

    James:

    I beg to differ on the Melos/Taiwan analogy. Taiwan is firmly within the US security orbit, at least for the time being, and is openly hostile to the PRC from the moment of its creation. This is not the situation Melos was in. Moreover, could you elaborate on the Bosporous analogy? Do you mean Byzantium? Or the Strait?

    Normally I would welcome an independent and autonomous foreign policy stance and in principle still do in what is emerging as a multipolar world (which I also agree is better a system than a bipolar or unipolar system). But the decisions made in the 90s set NZ up for the growing predicament that is finding itself in–what I have labeled elsewhere as the “Melian Dilemma”–where it is caught between two great power rivals upon which it is very dependent in different ways. The US will not pick up the loss of Chinese trade and the Chinese will not pick up the loss of US security guarantees, at least over the near term. Plus, although is not nice to have no friends or allies when one is a small state facing aggressors, it might be even worse to be a small state whose best “friends” hate each other and are likely to enter into conflict.

    Perhaps NZ can try to tie itself to the BRICs in a multipolar configuration, but that leaves the US out and China in. Perhaps it can forge ties with India and Europe to keep a democratic alliance focus to its trade and security. Maybe it can do some sort of Pan-Pacific entente. But I am not sure that the current foreign policy elite, known for their trade zealotry to the point of blindness about other aspects of foreign affairs, are capable of constructing from the ruins of their bifurcated approach, much less anticipate a replacement before things hit the fan and turn to custard.

  14. Erewhon on June 15th, 2018 at 20:31

    @James: Does China trade fairly with New Zealand?

    Actually, let me expand the question – has any foreign trade partner ever traded fairly with New Zealand?

  15. Edward Main on June 15th, 2018 at 22:38

    It is quite apparent from the article and comments New Zealand is seriously stuck between a rock and a hard place.

    Our country is small, insignificant and far away so if our political masters did favour one group ( Anglo zionist empire ) over the the other ( Eurasia / BRICS ) we would be tossed out into the cold with no great loss to either group.

    My concern is shipping. All shipping companies that service New Zealand are foreign owned ( European or
    Asian ) so withdrawl of services would bring total shut down to our economy

    So Erewhon: I think NZ has never been in a position to ever be traded with fairly. Before the 1980’s we were dependent on the UK for trading purposes and since then we kid ourselves ours is a free market economy. The brutal reality is we are low wage, commodity supplying and subservient.

  16. James Green on June 16th, 2018 at 22:42

    I was thinking a lot more in geographic terms, the Bosporan Kingdom was in the Crimean Peninsula. Wisely, Taiwan has not made the mistake of Melos (yet, anyway).

    I think the way forward to try gathering all the democratic countries into a combined security and trade alliance. Such an alliance would replace NATO and have the explicit goal of protecting and promoting democracy (of which free trade is an essential enabler). The US is not sufficiently democratic to join I think; it is too big to ever be good at democracy.

    The current Western mindset is to promote capitalism first and liberalism second, in order to bring all nations together. It should be about promoting democracy above all else instead. Only democracy is going to work out in the long run.

    @Erewhon: Even Australia have been jerks about trade with apples in the past, but there are degrees. At least China has signed an FTA with us. Japan is about to, although I’m doubtful about how worthwhile that one is. The EU and US haven’t.

    The problem with China is that our trade is entirely dependent on our government not saying anything bad about China, which is a real problem when there are plenty of bad things to say about it.

  17. Erewhon on June 17th, 2018 at 00:09

    Is the China FTA worthwhile, in your opinion?

  18. Edward Main on June 17th, 2018 at 18:21

    The China FTA is important.

    We need to use it as leverage to get in on the Belt and Road Initative ( BRI )

  19. Pablo on June 17th, 2018 at 18:59

    Edward:

    So when the time to choose arrives (should it come), you will side with the PRC on material grounds?

    If BRI is grounded in a broader network of (perhaps BRIC) alliances perhaps the turn against a Western-centric foreign policy might be understandable. But since foreign policy involves much more than material interest, without such a grounding could bring with it neo-colonization as we are seeing elsewhere in the SoPac, but with higher costs to the shift.

  20. Edward Main on June 18th, 2018 at 19:36

    Distinguido Señor!

    Yes. It is looking that way.

    I am influenced by what I have read.

    I remember reading President Putin mentioning the idea of a multi-polar world about ten years ago and it has resonated with me ever since.

    Add to the mix BRICS, The Shanghai Co-operation Organization and the emergence of Eurasia and a different
    different world is emerging.

    New Zealand is and will always remain a colony,
    so we better get used to it!

    Saludos Atentamente

  21. Erewhon on June 18th, 2018 at 19:47

    What do you mean by “the emergence of Eurasia”?

  22. James Green on June 19th, 2018 at 17:46

    @Erewhon: While I don’t actually know that much about the China FTA so my view on it could easily change from what I do know it seems to have been worthwhile so far and I think will continue to be so in the short term. Relying on it in the long term is a mistake though, the idea should be to diversify so as to insulate ourselves from problems due to being too dependent on any one country. For example: I don’t see how a big credit crunch doesn’t occur in China in the next 5 years.

    I wouldn’t touch the Belt and Road operation with a 40 foot barge pole. It looks exactly like neo-colonialism to me.

    And while I’m always quick to be down on America (I wince every time the MoD buys US military equipment) I wouldn’t actually be in any rush to move away from the Five Eyes agreement, it doesn’t seem to actually hurt us much and we do gain something from it. In contrast any military involvement with US doesn’t seem worth it at all.

  23. Edward Main on June 19th, 2018 at 18:18

    Erewhon: Eurasia

    My understanding is it refers to European Countries who may use the One belt one Road Initiative as a means to increase their trading opportunities with Russia and China

  24. Erewhon on June 20th, 2018 at 00:48

    @Edward Main: That’s a very specific meaning for a quite general term, but OK.

    Do you see this as something that is happening, or something that is likely to happen in the future?

    @James Green: What about the China FTA seems worthwhile to you? I’m not arguing it isn’t, mind, just interested in specifics.

  25. Pablo on June 20th, 2018 at 12:45

    Camarada Eduardo:

    NZ needs to look forward to the emergence of a new multipolar order and plan accordingly. It can choose to be aligned to one bloc or another, it could side with individual powers on a case by case basis, or it can try to continue to straddle the fence between increasingly hostile great powers. Above all, it must try to get a fix on what the nature of the future order will be (3, 5 or 7 great powers balancing each other?) and make calculations as to who is ascendant, who is descendant and which country or combination of countries offer NZ the most stable partners across a range of strategic issues over the medium to longer term.

  26. Edward Main on June 20th, 2018 at 18:31

    @Erewhon: From what I read, I see this as starting to happen now.

    China has developed its own payment system CIPS, in competition to the SWIFT systems

    The option of using the Yuan and the ruble instead of the US dollar for international payments

    @ Pablo. The play on words with ‘ Camarada ‘. Que bien! I like it .
    Very well put. Perspective is the key. I think a combination of all those options is the best way to go

  27. Erewhon on June 21st, 2018 at 01:58

    Sorry, I thought we were talking about One Belt One Road? Or do you see CIPS and Yuan-denominated payments as part of One Belt One Road?

    Also, while the options you’ve mentioned exist, are they being used widely in Europe, to the point that we could talk about Europe and Asia forming a single financial system (e.g. the “Eurasia” you spoke of?).

  28. Edward Main on June 21st, 2018 at 17:00

    @ Erewhon .. sorry if I am all over the place !

    Overall, I think west v east issues as a game of wealth, power and influence. Hence the OBOR initiative, CIPS payment systems, strategic alliances among the major players are eastern strategies to challenge western dominance.

    The CIPS payment system may not be widespread in Europe at the moment but there is the potential for it to do so, given one effect of the US Trade war is that it is pushing Europeans to do business with Russia

  29. Erewhon on June 21st, 2018 at 20:46

    So it would be fair to say that “Eurasia” is a possibility for the future, not a current reality?

  30. Edward Main on June 23rd, 2018 at 15:39

    @ Erewhon FYI below. Internet site source: Russia Insider

    The Shanghai Cooperation Organization was announced on June 15, 2001 and its charter was entered into force on September 19, 2003. The original members included the People’s Republic of China, Kazakhstan, the Kyrgyz Republic, the Republic of Tajikistan, the Republic of Uzbekistan and the Russian Federation. In 2017, both India and Pakistan were granted status as full members. There are also four observer states; Afghanistan, Belarus, Iran and Mongolia. There are six dialogue partners; Azerbaijan, Armenia, Cambodia, Nepal, Turkey and Sri Lanka.

    So based on what I have cut and paste, Eurasia is a current reality, the west choose to not know about it !

  31. Erewhon on June 24th, 2018 at 22:11

    I’m confused.

    You said Eurasia referred to European countries using the One Belt One Road.

    The Shanghai Cooperation Organisation doesn’t include any European members, except Russia?

    Also, the Shanghai Organisation is a military/security alliance. It has no economic dimension. So even if Germany or France did join the Shanghai Organisation, it wouldn’t signal any intent to get involved with One Belt One Road (or Yuan denominated transactions, or CIPS, or some of the other things you’ve mentioned). To use a concrete example, Russia is a member of Shanghai but doesn’t use Yuan denominated transactions or CIPS.

    So I’m still quite unclear about your thesis, and the more you try to explain it, the less clear it gets.

    You’re listing a lot of organisations/institutions/initiatives where China leads or is a key member. But that doesn’t really answer any of the questions I’ve asked.

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