“Building Back A Better World”: Can it challenge the BRI?

Introduction

Ever since taking over as President, Joe Biden has reiterated the need for the US and its allies to work together to check China’s economic rise by providing alternatives to China’s ambitious Belt and Road Initiative (BRI) project as well as its burgeoning technology scene. During his State of the Union address in April 2021, the US President had said:

China and other countries are closing in fast. We have to develop and dominate the products and technologies of the future

It would be pertinent to point out that 138 nations on five continents have signed various BRI cooperation agreements with China as of the end of 2020. (EU member states including Greece and Italy are also on board the BRI.) China has so far invested a whopping $690 billion in BRI-related projects in 100 countries.

G7 and the B3W

On June 12, 2021 the G7 unveiled the Building Back a Better World (BBBW/B3W), a brain child of the Biden Administration. The G7 leaders said that the B3W would be “values-driven, high-standard, and transparent.” During a conversation with Boris Johnson in March, the US President had discussed the need for an alternative to the BRI. A number of BRI related projects in developing countries in Asia and Africa have drawn criticism for lacking in transparency and not being economically sustainable, leading to debts which make countries dependent upon them or leads to a “Debt Trap (pdf).”

Debt trap has been defined as “a predatory system designed to ensnare countries into a straightjacket of debt servitude.” A prominent example of this is Sri Lanka, where when the South Asian nation’s debt burden vis-à-vis China became untenable, it was compelled to sign a 99-year lease with China through which Beijing got 70% stake in the strategic port of Hambantota. Many projects falling under the China Pakistan Economic Corridor (CPEC), too, have been under the cloud for lacking transparency and not being feasible. In certain cases, such as the Kyaukpyu port in Myanmar, Beijing has had to renegotiate the cost of projects (it was brought down from $7.3 billion to $1.3 billion) as a result of strong local opposition.

Alternatives to BRI

The Trump Administration received bi-partisan support for the BUILD (Better Utilisation of Investment Leading to Development ) Act, which created a new agency (the United States International Development and Financial Corporation, or USIDFC) with a corpus of $60 billion to facilitate private sector involvement in the Indo-Pacific, especially African countries. In 2018, the US Secretary of State Mike Pompeo had also made a commitment of $113 million to projects in the Indo-Pacific focused on technology, infrastructure, and energy. In November 2019, the US, Japan, and Australia had also launched the Blue Dot Network on the sidelines of the ASEAN Summit.

Then-US National Security Advisor Robert O Brien had compared the Blue Dot Network to Michelin Guide, which meant that just like a Michelin star is the sign of approval for a restaurant, a blue dot would be a seal of approval for infrastructural projects. Days before the G7 meeting, the inaugural meeting of the consultation group of the Blue Dot Network was held in Paris, apart from representatives from Western governments and Japan, other stakeholders such as members of civil society, academics, and 150 global executives participated in this meeting.

The US State Department, while commenting on the Blue Dot Network, had said:

The Blue Dot Network will be a globally recognized symbol of market-driven, transparent and sustainable infrastructure projects

Under the umbrella of Quad countries (US, Japan, Australia, and India), too, there has been discussion on enhancing economic cooperation as well as connectivity.

Opportunities for the B3W

There is an opportunity for the B3W, since in the aftermath of Covid, certain BRI projects have slowed down. Second, the geographical scope of BBBW is much wider than that of the projects under the Indo-Pacific (B3W will also include Latin America and Caribbean). BBBW can also hardsell its strengths such as transparency and sustainability – both economic and environmental. It also can dovetail with some of Biden’s ambitious economic schemes related to the economy and infrastructure. The fact that Biden is willing to take the lead, unlike Trump, is reassuring for allies and sends out a positive message to developing countries looking for alternatives to the BRI. While addressing a press conference after G7, the US President made this point:

The lack of participation in the past and in full engagement was noticed significantly not only by the leaders of those countries, but by the people in the G-7 countries, and America’s back in the business of leading the world alongside nations who share our most deeply held values

The US had also categorically clarified that the B3W seeks to provide an alternative to BRI, but it is not merely about targeting China.

Possible limitations of B3W

Yet, there are limitations. First, the B3W still does not have a clear blue print. Second, it would be tough to match the BRI in terms of resources. Third, a number of G7 members who themselves share good relations with China may be reluctant to get on board the initiative (even though it has been made clear that the B3W initiative is not just about targeting China).

Conclusion

In conclusion, a lot will depend upon how much not just the US government and big businesses are willing to invest in the B3W (since the model will be different from the BRI, which is one of ‘state capitalism’) but whether other members of the G7 are willing to play a proactive role in such a project. An alternative is needed to the BRI and the announcement of B3W is welcome. Taking it forward and competing with BRI may not be impossible but is certainly a tough task.

State formation in Korea and Japan

State formation in Korea and Japan occurred a thousand years before it did in Europe, and it occurred for reasons of emulation and learning, not bellicist competition. Korea and Japan emerged as states between the 4th and 8th centuries CE and existed for centuries thereafter with centralized bureaucratic control defined over territory and administrative capacity to tax their populations, field large militaries, and provide extensive public goods. They created these institutions not to wage war or suppress revolt – the longevity of dynasties in these countries is evidence of both the peacefulness of their region and their internal stability. Rather, Korea and Japan developed state institutions through emulation and learning from China. State formation in historical East Asia occurred under a hegemonic system in which war was relatively rare, not under a balance of power system with regular existential threats. Why? We focus here on diffusion through a combination of emulation and learning: domestic elites copied Chinese civilization for reasons of prestige and domestic legitimacy.

This is good, and it comes out of the most interesting journal in international relations today, but it doesn’t quite do it for me. I think China’s imperialism was far looser than contemporary scholars imagine, especially as China spread territorially outside of its cultural hearth. I think China’s imperial sovereigns were more akin to Emperors in the Holy Roman Empire than, say, Louis XIV. I do think that Japan and Korea mimicked China, which is exactly why both countries had relatively decentralized political systems up until the 19th and 20th centuries.

Contemporary scholarship has a soft spot for pre-modern (before 1500 AD) non-Western state systems, so you get stuff like this. Again, this is a great article, and you should read it right now, but I don’t buy it. I don’t think Japan and Korea were states that existed for centuries “with centralized bureaucratic control defined over territory and administrative capacity to tax their populations, field large militaries, and provide extensive public goods.” That’s too rich for my blood. There were cultural hearths and polities in Japan and Korea that tried to mimic China, but sovereignty was still far too fractal until the Europeans arrived with their formal imperialism. See this piece for an example of why I’m skeptical of the author’s claims.

Biden’s Summit on Climate and Xi’s Belt and Road Initiative

Introduction 

US President Joe Biden hosted a Summit on Climate (April 22-23, 2021) which was attended by 40 world leaders, including Chinese President Xi Jinping. Ever since taking over as President, Biden has sent out a strong message that the US would take a leadership role as far as climate issues are concerned. During his address at the Summit, the US President also dubbed this decade as decisive. Said Biden: 

Scientists tell us that this is the decisive decade – this is the decade we must make decisions that will avoid the worst consequences of the climate crisis. 

Under the Trump Administration, the US had withdrawn from the Paris Agreement, while one of Biden’s first steps was getting the US to re-join the Paris Agreement, and he has also made a commitment of $1.2 billion to a Green Climate Fund.  Another important component of Biden’s climate change agenda includes an infrastructural package, which seeks to invest in clean energy transition. The Biden Administration has also been laying emphasis on creating clean energy jobs, and greater investment in Research and Development (R and D) related to clean energy. 

US-China scope for cooperation? 

While ties between US and China have witnessed a serious deterioration in recent weeks, Chinese President Xi Jinping attended the Climate Change Summit. Days before the Climate Summit, Xi, while addressing the Boao Forum at Hainan, was critical of the US for promoting a cold war mentality, but did clearly leave the door open for cooperation with the US in dealing with common challenges posed by climate change.

In spite of the downward spiral in bilateral relations, Biden and members of his administration have also repeatedly stated that there is scope for the US and China to work together.

Biden’s Climate Change envoy, John Kerry, had visited China earlier this month, and during the course of his trip exchanged notes with China’s special envoy for climate change, Xie Zhenhua. A joint statement released by both sides stated

The United States and China are committed to cooperating with each other and with other countries to tackle the climate crisis, which must be addressed with the seriousness and urgency that it demands,

An invitation to Chinese President Xi Jinping to attend the Summit was extended during Kerry’s visit, though China did not give any confirmation (Xi gave his confirmation to attend the Summit one day before).

Agenda of the Summit

During the summit, the US President made a commitment that US would reduce its greenhouse gas emissions by around 50% below its 2005 emissions levels, by 2030. (Former US President Barack Obama had made a commitment to reducing emissions around 26-28% by 2025.) Biden’s announcement has been hailed by some, and being cited as a reiteration of the point that Biden wants to show the way on climate change. Biden’s announcement may be opposed by certain quarters within the US who feel that the US should not be compelled to reduce emissions drastically.

Before the Summit, China had made it clear that it would not toe the US line. During John Kerry’s China visit the Chinese Vice Foreign Minister, Le Yusheng, said:  

Some countries are asking China to achieve the goals earlier. I am afraid this is not very realistic.

While addressing the summit, Chinese President Xi Jinping reiterated a commitment he had made last year while addressing the United Nations General Assembly (UNGA): that China would achieve carbon neutrality by 2060, and to peak carbon emissions by 2030. He reiterated the need for global cooperation. 

How Biden and Xi linked their commitment to environment with their economic visions 

What was interesting was that both Biden and Xi Jinping also linked the climate goals to their economic goals. Xi Jinping spoke about a focus on a ‘green’ Belt and Road Initiative (BRI). Interestingly, the mega connectivity project, often dubbed as China’s ‘Marshall Plan,’ has often been criticised not just for its lack of transparency, but also for the fact that it is not environmentally friendly (in fact many observers have argued that Biden’s infrastructural plan is a counter to China’s BRI).

Biden has repeatedly spoken about creating clean jobs and infrastructure and repeated the same during his address. 

Conclusion

In conclusion, while Washington-Beijing ties are likely to face numerous strains, climate change seems to be one area where there is space for cooperation between the two. While the US under Biden is likely to follow a significantly different approach from that under Trump, China is unlikely to budge from its commitments. What would be interesting to see is whether Beijing actually addresses criticisms of the BRI not being environmentally friendly. While China and the US may find some common ground on climate change, it is likely that the Biden administration, given its focus on the environment, may come down more harshly on the BRI and may come up with an alternative.

Nightcap

  1. Free speech is more important than ever Niall Ferguson, Quillette
  2. Is it racist to expect black kids to do real math? John McWhorter, It Bears Mentioning
  3. Revolt of the three feudatories Wikipedia
  4. War and trade in the peaceful century (pdf) Karlsson & Hedberg, EHR

Nightcap

  1. Taiwan as the world’s newest flashpoint Blackwill & Zelikow, War on the Rocks
  2. Witch hunts, economics, and the Holy Roman Empire Johannes Dillinger, Aeon
  3. On deserts Tariq al Haydar, Threepenny Review
  4. System, empire, and state in Chinese IR (pdf) Yongjin Zhang, Review of Int’l Studies

Nightcap

  1. What did John Calvin think about economics? Steven Wedgeworth, Calvinist International
  2. The ethnocultural borderlands of early Maoist China Benno Weiner, Age of Revolutions
  3. Burning books Akram Aylisli (interview), Los Angeles Review of Books
  4. Ivy League English departments and low culture Mark Bauerlein, Modern Age
  5. But Maliki was supported both by Iran and by the United States.” John Jenkins, New Statesman

Nightcap

  1. Fascinating piece on Ming China’s censorial system Branko Milanovic, globalinequality
  2. On the farmer’s protests Jeet Singh, Time
  3. Understanding the rise of socialism Brad Delong, Grasping Reality
  4. Understanding middlebrow Scott Sumner, Money Illusion

Nightcap

  1. Immigration and voting for redistribution Derrill Watson, NOL
  2. What shouldn’t be surprising about democracy John Hasnas, RCL
  3. Wobbly: China’s post-Covid future Andrew Scobell, War on the Rocks
  4. Experts versus elites Robin Hanson, Overcoming Bias

Nightcap

  1. The hidden story of the Singapore Mutiny Francis Sempa, ARB
  2. The rise and fall of Rhodesia Xan Smiley, Literary Review
  3. Illusions of “American” empire Santiago Ramos, Commonweal
  4. China’s quiet play for Latin America Margaret Myers, Noema

EU-China trade talks: More than just economics

The in-principle agreement between the EU and China over the EU-China Comprehensive Agreement on Investment (CAI) is significant both from an economic and geopolitical standpoint.

The first round of talks for EU-China CAI began in January 2014 (it was only in 2016 that there was some agreement between both sides on the broad contents of the CAI). Ties between the EU and China too had witnessed a sharp deterioration in the aftermath of the covid-19 pandemic, and a number of EU member states, including Germany, Spain, and Italy, had tightened FDI regulations with an eye on preventing Chinese takeover of companies, especially in sensitive sectors like security.

In the month of September, while commenting on the possibility of the CAI, the European Commission President Ursula Von der Leyen had stated: “China has to convince us that it’s worth having an investment agreement.”

Key contents of the agreement

The CAI will ensure a uniform arrangement for the whole of Europe with China. The key issues which will be addressed through the CAI include; resolution of disputes, greater transparency with regard to Chinese state subsidies, and curbs on China’s practice of asking foreign investors to share their technology in lieu for market access.

China has also agreed to address issues pertaining to sustainable development – such as environment and climate (China has agreed to implement the Paris Agreement on climate change). Beijing has also agreed to implement the International Labour Organisation (ILO) conventions.

According to an EU official, substantial commitments have been received from China on three issues: market access, level playing fields, and sustainable development. One of the strong backers of the CAI has been the German Chancellor Angela Merkel.

The deal will provide the EU greater access to China’s market. While the EU provides a significant amount of market access to China, the same can not be said of Beijing. Beijing is supposed to have made a firm commitment to the EU towards greater market access, especially in manufacturing (which makes up more than half of EU’s investment in China, including the automotive sector and basic materials).

Geopolitical implications

The deal has an important geopolitical dimension to it. While in the aftermath of the covid-19 pandemic, ties with the Western world, including the EU, had witnessed a downward spiral, this deal is important in terms of symbolism. Chinese media publications have hailed the finalization of this agreement, emphasizing the point that the EU has adopted an independent stance vis-à-vis China and not followed Washington’s line.

Gao Jian, a scholar at Shanghai International Studies University, states:

Deeper China-EU ties will decrease possibility that the US will be able to hijack Europe for its anti-China chariot. Hopefully, the completion of the China-EU BIT talks will sound an alarm bell to the US administration and send this message: cooperation is the only way out for China-US relations.

If one were to look at US reactions, it is not only officials in the Trump Administration (which has a little over two weeks in office) who have been skeptical, but those from the incoming Biden Administration as well. Matt Pottinger, Trump’s Deputy National Security Advisor, has stated:

Leaders in both U.S. political parties and across the U.S. government are perplexed and stunned that the EU is moving towards a new investment treaty right on the eve of a new U.S. administration.

One of Biden’s key thrusts has been on working with the EU, and his pick for NSA chief, Jack Sullivan, had said that the US would like to work with the EU on common concerns vis-à-vis China’s ‘economic practices.’ Many observers argue that the decision of the EU could drive a wedge between the EU and the US, and this was one of Beijing’s main aims. It has also been argued that trilateral economic cooperation between Japan, the EU, and the US vis-à-vis China could also be impacted by the CAI.

Conclusion

In conclusion, the EU has sent out a clear message: that it would like to chart its own course given that it has its own economic interests, and not necessarily toe the US line vis-à-vis Beijing. For China, it is important in terms of messaging, as is evident from the tone of the Chinese media who are trying to dub this as a snub by Brussels to Washington DC. While US President-elect Biden has sought joint cooperation with the EU, the EU and the US will need to be on the same page with regard to dealing with China.

Next

I have to report that I think my advancing age is not preventing me from gathering facts and exercising criticality. (Sorry, Joe; I don’t mean to put you down. – Joe Biden and I are the same age. But, I know what I am talking about.)

The year 2020 was rough, of course, not so much for me or for my wife Krishna, as for our children and others we love. For the two of us, sheltering in place did not really change our habits all that much except that our shopping for ourselves became progressively more limited. We didn’t party much before; we did not party in 2020. We had not partied that much in 2019. (That’s unless you count staying up until eleven pm with a small glass of Marsala as partying.) We might start partying in 2021 but it’s not all that likely!

The COVID affair did two things for me. First it reminded me of what a thin veneer rationality really is in Western society. We saw many lose their cool and accept the unacceptable. I was reminded also of something I knew in my bones, from thirty years of teaching: Even otherwise educated people don’t know how to deal with simple numbers. So, 320,000 excess deaths from the C-virus for a population of 320 million correspond to an excess death rate of 0.001. That’s one per thousand; it’s a very small figure. (I am deliberately leaving aside the idea that the number of deaths from COVID is almost certainly overestimated in this country. One problem at a time works best.) If people understood how small the number is, they would respond accordingly that is, with calm, perhaps. The evidence of innumeracy is all over our media, and all over Facebook, on all political sides. I don’t know why we keep doing such a piss-poor job teaching basic math. (It’s been like this as far back as I can remember.) Perhaps, it’s because people who can’t count don’t know that they can’t count.

Speaking of innumeracy, another topic rises to my mind irrepressibly. Above, I was referring to the task of interpreting simple fractions for example. There is something else missing among those, specifically, who are tasked with explaining what causes what, and who take the task seriously. People so engaged have always had to deal with two problems. First, there are multiple real causes to the thing they wish to understand, multiple causes of different strengths. So, weight gain is influenced both by calorie intake and by amount and intensity of exercise; fact. Calorie intake counts more than exercise. Second, there are possible causes that may not be causes at all. So, in addition to the two causes above, one may believe that weight gain is influenced by the ambient temperature. (It’s not.) Well it turns out that there is a series of tools that help understand better both kinds of problem. I mean much better.

There exists a toolbox called “econometrics” that does exactly that. It’s far from new. I learned econometrics in the seventies, and I was not a pioneer. Media explainers have evidently no acquaintance with it and probably don’t even know the tools exists. Now, I don’t want to give the wrong impression, learning econometrics is not light intellectual lifting but it’s within the reach of any smart person with a little time. I am baffled by the fact that something so obviously useful to figure out with real data whether X causes Y, in addition to Z, has failed to leach into ordinary educated society in fifty years and more. It’s discouraging about the pace of, or even the reality of progress.

The second important thing that happened in 2020 is that government at all levels gave us striking examples of its incompetence, and further, of its tendency immediately to turn tyrannical when frustrated. In the US and in France (whose case I am following pretty closely in the French media), government decisions have ruined a good part of the economy without real explanation being forthcoming. I mean closing by force thousands of small businesses that have little or no chance of recovering. I mean closing schools which prevents some, or many parents from going to work. The explanations for such actions are too light-weight to be taken seriously and they are frequently reversed like this: X causes Y; Ooops! X does not cause Y, Ooops! X does cause Y, sort of… Sometimes, often, good government consists in doing less rather than more: “We don’t know; do what you think is right,” at the most local level possible.

And, speaking of everyday government incompetence: The state of California wants to eliminate all internal combustion engines cars (and my own little pick-up truck) within fifteen years, to replace them with all-electric vehicles. That’s in a state where the local (PG&E, in central California) power monopoly has chronic trouble merely keeping the lights on. So, the question arises: Does the State of California really not know or does it know and not care (because it’s all about saving the planet)? I am not even sure which answer I prefer.

In the US, in addition to the COVID pandemic, we had a half a year of riots and burning of businesses, all in large cities held by Democrats for a long time. The inability, or the unwillingness, to stop the civil strife was striking. It expressed either a stunning degree of incompetence, or of complicity with the rioters. One explanation does not exclude the other, of course: Personal cowardice can easily hide under ideological fellowship. And ideology can generate cowardice.

In the minds of small government conservatives like me, the minimal task of government is to keep order so that individuals and companies can go about their constructive business. Local government largely failed in America in 2020. Extreme libertarians were more right than I thought. I wonder, of course, how much worse it would have been if a liberal had held the presidency instead of Donald Trump.

Government demonstrated to me in 2020 that it tends to be both incompetent and tyrannical. The thought crosses my mind that if it were more competent, it would be less inclined to tyranny.

The riots were adroitly attached to protests against the deaths of black suspects at the hands of police in questionable circumstances. They were staged as anti-racist protests, and especially as protests against “systemic racism.” I have already written why I think the police killings of black citizens in general are not racist acts. (Note: This is a long article. It can be read in nine segments, for convenience.)

I have also argued that in today’s America, systemic racism is too hard to find to lose sleep over it. Black Lives Matter, the organization, did almost all of the staging. It’s an organization of professional Marxist revolutionaries. I believe they are merely using alleged racism as a means to trigger a revolution in the US, or at least, to make their brand of statism gain ground, or at worst, to earn some credibility among the ill-read but well-intentioned.

In spite of the mendacity of the BLM campaign in every way, it may have done some good simply by drawing attention. I have always thought that American society has never really digested the fact of slavery. I mean the fact that it was 250 years of unrelenting atrocities. Some good may come from greater and deeper knowledge of that past. Same reason I am horrified by the brutal removal of statues and by the biased (“woke”) erasure of history going on in the streets and in universities as I write. Not facing the legitimate grievances about yesterday is like asking for insidious and endless blackmail today. That’s what we have now. There is a better way.

Do I think the Democrats, some Dems, stole the presidential election? I am not sure. I am sure of two things however: Many Democrats in several locations tried to steal it as much as they could. Some have argue in their defense that it was just “normal” cheating, that it happens the same every year. I want to know more about that. The second thing is that – to my knowledge (I am educable) there have been few or no complaints of cheating against Republican entities. Electoral cheating is a Democratic specialty.

Stealing a word from conservative commentator, Mark Stein, I fear we are entering a post-constitutional era. I don’t know what to do about it. I wish secession were more practical. It’s happening anyway on a small scale with tens of thousands voting with their feet by leaving California and New York State. It’s a first step. If the federal government would shrink some, I could imagine that this sort of peaceful partial secession would work for all: a Middle America centered on Texas, and an Extreme America based in California and New York State. The two parts linked in a loose confederacy. (Oops, wrong word!) Unfortunately, there is no miracle in sight by which the federal structure will become more skinny, with a shorter reach.

2020 saw the dramatic introduction of censorship and also of guided thought throughout the social media. If capitalism is allowed to function, the giant privately held businesses responsible for these poisons, and first and foremost Facebook, will have to withstand the emergence of rivals that will compete on that basis, precisely. I have tried one such and it did not work for me. There is no reason why there can’t be more, better ones. In the worst scenario with which I come up, the forces of darkness cannot eradicate capitalism fast enough to prevent this from happening. That’s my optimistic prediction for 2021 and beyond.

Other interesting things have happened to me that are kind of hard by their nature to recall. Here is the main one. As anthropogenic global warming became the state religion in many places, including to an extent, in the US, its narrative lost its remaining credibility in my mind. (Ask me why.)

Finally, we saw again that Communist China is too big and too powerful for a country that does not share our values. I refer to mass imprisonment without trial and outside the law, extra-judicial kidnapping by the government, guaranteed non-freedom of the press. This is true even if most rank-and-file Chinese citizens are satisfied with their government. (They may well be.) I am not Chinese myself. Chinese economic power has to be restricted (even if doing so is unfair). The influence of the Chinese Communists in America must be constrained. If Finland, for example were as big as Communist China, I wouldn’t mind so much, or at all.

I wish all of us a better year, more wisdom, more intellectual honesty, the ability peacefully and firmly to resist creeping tyranny.

Nightcap

  1. The weirdest people in the world James Crabtree, Financial Times
  2. Finding Mrs Dalloway Jenny Ofill, New Yorker
  3. Trapped by Thucydides? John Sullivan, War on the Rocks
  4. The emergence of globalism Or Rosenboim, In The Long Run

New Zealand’s elections and the geopolitics of the Pacific

Introduction 

The convincing victory of Jacinda Ardern is important for more than just one reason. First, the 40 year-old Ardern’s centre-Left Labour party has won convincingly — securing 49% of the vote, and securing 64 seats in the 120 seat assembly. Ardern has delivered the biggest election victory for her party in half a century. The victory gives Ardern and her party the opportunity to form a single party government.  

Second, while there is often talk of a right-wing political discourse being dominant globally, it is important that a center-left leader has won. Many commentators of course would argue that New Zealand is a small country, with a small population of less than 5 million – and that not much should be read into the electoral result.

Third, Ardern’s successful handling of the Covid19 pandemic, along with other women leaders – including German Chancellor Angela Merkel, Taiwanese President Tsai Ing Wen, Bangladeshi Prime Minister Sheikh Hasina, and Denmark’s Mette Frederiksen – has been acknowledged globally. A study published by the World Economic Forum and The Center for Economic and Policy Research makes this point and has cited some of the reasons for the success of the these leaders. The success has been attributed to the fact that all these leaders were quick to react to the crisis. 

Fourth, at a time when the world is becoming insular, the New Zealand PM has been firmly pitching for open immigration policies, has taken a strong stance vis-à-vis Islamophobia (something which leaders of other liberal democracies have failed to do), and repeatedly argued in favor of a more inclusive society. In March 2019, shootings at a Mosque in Christchurch by white supremacists had resulted in the killing of 50 people. Ardern, while expressing solidarity with members of the community, donned a head scarve, or hijab, and this gesture was appreciated. In her victory speech the New Zealand PM stated that the world is becoming increasingly more polarized and that “New Zealanders have shown that this is not who we are.” 

The New Zealand PM has her task cut out on issues related to the economy (the economy had shrunk by 12% in the second quarter thanks to the impact of the lockdown). Like other countries, there have been many job losses. Some of the sectors which have witnessed job losses, such as retail, hospitality, and tourism – employ women (according to some estimates a whopping 90% of people who have lost jobs are women). Some commentators also believe that the Labour government has not been able to deliver on key promises related to housing, child welfare, and the economy. There is also an argument that Ardern’s first tenure was not transformational, and after her win the expectations from her will be much higher.

Foreign Policy Challenges  

New Zealand, in spite of being a small country, is important in the context of foreign policy issues. There are two important dimensions: New Zealand’s ties with China, and as a part of the 11-member Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP).

As far as New Zealand’s ties with China are concerned, there are various layers to the bilateral relationship. Jacinda Ardern’s government has largely gone along with other 5 eye countries when it comes to the issue of allowing Huawei entry into New Zealand’s 5G network. On issues pertaining to Hong Kong, the Uygurs, and the South China Sea too, New Zealand has taken a firm stance vis-à-vis Beijing. After the imposition of the National Security Law in Hong Kong, New Zealand suspended its extradition treaty with Hong Kong, and it also made revisions with regard to its policy on military and dual-use goods and technology exports to Hong Kong, subjecting the city to the same as the People’s Republic of China (PRC). 

During her speech at the China-New Zealand Summit, Ardern said: 

As you know, this has come to the fore recently around developments like Hong Kong’s new security law, the situation of the Uyghur people in Xinjiang province, and Taiwan’s participation in the World Health Organisation.

Like its neighbour Australia, New Zealand has also been taking cognizance of increasing political interference in its domestic politics, via governments, political parties, and universities. There has been bipartisan support for taking measures to check the same. Some policies have been introduced with regard to political donations as well as Foreign Direct Investment. 

At the same time, New Zealand has a close economic relationship with China and this is strong reiterated by figures. In 2019, China accounted for a staggering 33% of New Zealand’s dairy exports, over 40% of meat experts and contributed to 58.3% of international education earnings (it is estimated that in 2019, 87% of New Zealand’s service export earnings from China came from education-related travel and personal tourism).

While there has been a shift in New Zealand’s approach vis-à-vis China, officials have also repeatedly made the point, that it will not blindly toe any other country’s stance vis-à-vis China. 

CPTPP

Another important foreign policy component of New Zealand is as member of the 11-member CPTPP. Along with other countries, New Zealand worked towards keeping supply chains going in the midst of the pandemic. For instance in April, New Zealand sent a first plane load of essential supplies to Singapore. (This included commodities like lamb and beef which were sent by a chartered plane.)

New Zealand and other CPTPP members have also been working to resume essential travel, while Singapore opened a travel bubble with New Zealand on September 1, 2020 (which means that quarantine-free travel will be allowed). 

New Zealand and its neighbour Australia, another member of CPTPP, have opened an air bubble too (though this is one-way as yet only passengers from New Zealand can travel to Australia). The bubble currently is applicable only to two Australian states New South Wales and the Northern Territory.

Conclusion  

In conclusion, the election result is important not just in the context of domestic politics, but in sending a message that there is space for centrist and inclusive politics and that it is not necessary to have a Strong Man image cultivated by many right-wing leaders. It is also important to bear in mind that liberal democracies, which respect diversity, are in a far better position to provide an alternative narrative to that of China. Apart from this, while the shortcomings of globalization do need to be acknowledged and addressed, inward looking economic and immigration policies need to be firmly rejected.

Nightcap

  1. All ideologies eventually seem to fail Scott Sumner, EconLog
  2. State capacity libertarianism as a pipe dream Jason Brennan, 200-Proof Liberals
  3. China after Covid Wang Xiuying, London Review of Books
  4. Nationalism, Eastern European style James Felak, Law & Liberty

Nightcap

  1. Conflicts of interest in economic research Fabo, et. al, NBER
  2. In the dragon’s shadow Frank Beyer, Asian Review of Books
  3. 2020 is a black comedy Scott Sumner, The Money Illusion
  4. The risk of creeping Apartheid? Chris Bertram, Guardian