Saturday, November 22, 2014

China/New Zealand "win-win" deal?

John Key, NZ Prime Minister presenting Xi Jinping, China's President, with a No 8 All Black jersey to seal the 'win-win' strategic partnership.
Xi Jinping’s 2-day stopover in NZ was a success. It sealed a ‘strategic partnership’ upgrading the 2008 FTA (Free Trade Agreement) with China to match Australia’s recent FTA. It’s all about NZ as supplier of cheap food plus high tech inputs into China’s rampaging economy.

This upgraded FTA access will be exploited by the US when it succeeds in forcing NZ to sign up to the TPPA (Trans Pacific Partnership Agreement). US investors will have open access to grab control of strategic NZ IP assets and piggy back into China on the basis of the ‘win-win’ partnership. So NZ is no more than a stalking horse for US entry into China.

The US has made clear from the outset that it must compete with China by penetrating its domestic economy. China developed rapidly by welcoming Western FDI but on its own terms. To date the US, Japan and EU have been only able to buy into China as joint ventures. The profits from these ventures have not been enough to rescue the US, Japan and EU countries from economic stagnation. China has been able to quarantine its powerful value producing economy from a Western takeover.

The rivalry between the TPPA and the APFTA (Asia-Pacific Free Trade Area)  is really about getting access to more value produced in China.  Yet APEC was a victory for China in promoting the APFTA while the TPPA was stalled over US and Japan Agricultural trade protection. That is the meaning of the symbolic bi-lateral deal between Xi Jinping and Obama signed at APEC over climate change and mutual exchanges designed to divert attention from great-power rivalry.

Despite it's setback, the US strategy is to open up China to FDI access on the same terms as the TPPA. That is, US corporations dictating the terms and not China. So the next move by the US-led bloc is to increase ownership of China’s high tech value-added domestic production as the life-line it needs to survive the impending global recession.

In this power play, NZ is no more than a client state of both major players. Not only does NZ provide a back-door into China. All parliamentary parties join the chorus preaching US objections to China’s failure to live up to 'Western' human rights and the rule of law, as barriers to open access of the global free market.

So this is no 'win-win' for NZ. It is a pawn in this zero-sum heavyweight bout between the US and China imperialist blocs. The way ahead for NZ workers is to fight both imperialist blocs by joining forces with the workers in both China and the US, and the client capitalists in NZ,  to overthrow their ruling classes and unite to build a socialist world.

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