Things are getting tense with China: What's really going on here?

2019-03-20 22:12:57

OPINION: A Chinese proverb holds that, When you say one thing, the clever person understands three.

What then is China trying to tell us through recent chilly relations? It's invited Prime Minister Jacinda Ardern to visit, but she's halfway through her term and there's just never been a good moment.

Chinese state media and other government agencies are warning Chinese travellers - big spenders for Kiwi tourist businesses - of difficulties in New Zealand. And Sanford, the country's largest seafood exporter, was having an unusually tricky time getting fresh shipments through Chinese customs before they spoiled, though a spokesperson says that trouble has abated.

It's no coincidence that China is miffed about tech giant Huawei's exclusion from 5G contracts in New Zealand. China would also like New Zealand's support for its wide-ranging efforts at extending its global power through a trade and development policy it calls one One Belt One Road.

The New Zealand government has legitimate security qualms in both instances.

That's making relations a little tense, though we're still a long way from a China-US-style trade war. In fact, our relationship with China is a good deal more relaxed than China-Canada at the moment, and falls roughly on a par with Australia, which is struggling to understand why its valuable coal shipments are being blocked and delayed at some Chinese ports.

Still, a closer look at how our allies are faring does help us to interpret China's message.

China makes wide use of improvised trade barriers to articulate annoyance. Both Canada and Australia have moved against Chinese corporate darling Huawei in recent months.

Australia excluded the Chinese telecom giant from bidding on 5G contracts. Canada - which is still considering the 5G question - kindled Chinese anger with its arrest of Huawei chief financial officer Meng Wanzhou on a US warrant. She now faces extradition. China is furious and the diplomatic spat quickly spread to business.

Canada's largest grain handler - Richardson International - was recently stripped of its licence to sell canola, a valuable oilseed crop, in China. China is claiming the presence of weeds, which nobody in Canada is taking at face value. For one thing, only Richardson has lost its licence; the other big canola handlers are not Canadian-owned and are unaffected.

"Weeds in the canola, I think we can call that a spurious excuse," says Charles Burton, an associate professor of political science at Canada's Brock University and a former counsellor at the Canadian embassy in Beijing. He points out that the dispute fits squarely within China's recent history of voicing displeasure through trade.

Among the most notable examples is a spat with Norway that only recently eased. In 2010, the Nobel Peace Prize went to the imprisoned Chinese democracy advocate Liu Xiaobo. His empty chair at the ceremony was ominously symbolic. Lucrative Norwegian salmon exports to China crashed thereafter.

Similarly South Korea suffered broad retaliation after it confirmed it would install an advanced US defence system known as Thaad in 2017. In an instance that should worry New Zealand, tourism dropped precipitously as Chinese travellers were discouraged from visiting the previously popular destination. No directives flowed from official government sources but China watchers say travel boycotts frequently start with vague warnings about a destination.

There's an aspect of this unofficial frostiness to the current Australian coal dispute. Last month, one of China's biggest ports stopped Australian coal imports, and now clearing times are an extraordinarily onerous 40 days. The Australian minister for trade says he has been assured that the delays are not country specific, and Australia's largest exporters are, publicly at least, reading the situation differently. Glencore says it's political, BHP says it's not.

But the difference of opinion is neither unusual nor surprising. Companies typically like to keep low profile for fear of being singled out in a dispute, and many refuse to be drawn when asked to speculate on reasons for Chinese stumbling blocks.

Another difficulty is what Ben Bland, director of the Southeast Asia Project at the Lowy Institute in Sydney, calls "deliberate ambiguity." China uses informal barriers to signal displeasure precisely because they can be shrugged off, or even dismissed. For this reason it also blows hot and cold, as in the case of the postponed China-New Zealand Year of Tourism kick off, delayed by Chinese officials and now rescheduled to start at the end of the month.

The ambiguity, says Bland, allows China to be nimble and change tack quickly if agreement is reached, equally a climbdown can be achieved with a minimal loss of face. But China's recent targets, Canadian canola, Australian coal and tourism in New Zealand are unlikely to be random, says Jia Wang, deputy director of the China Institute at the University of Alberta, Canada. "You can never be one hundred percent sure of the motivation," she says.

"But these are all high value industries for the countries involved. And the timing is very important. You have to ask, Why now?"

Kate MacNamara has been a journalist for 20 years. She covered business and trade for the Canadian Broadcasting Corporation, and also as a contributor for the BBC.

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