China must walk softly in dealing with rest of world

PUBLISHED : Saturday, 29 August, 2009, 12:00am
UPDATED : Saturday, 29 August, 2009, 12:00am

Ivisited the South Island of New Zealand this summer and there are two things that I could not miss - the huge sheep population and the influence of China, as well as the tensions that come with it.

In Kaikoura, a coastal town proud of its crayfish, seals, whales and its 'green global certified community' status, I was brought to a whale-watching cruise in a coach. It was not one from Europe or Japan, which boast of their green vehicles, but from a privately owned enterprise, Yutong Bus, in Henan province.

In Christchurch, where tourism accounts for 15 per cent of the economy, I met Adrian, a retiree who spent two days a week poling tourists along the scenic Avon River in a punt. 'How's business?' I asked, assuming that the global downturn and swine flu must have made his life difficult.

'It hasn't been better,' said Adrian. 'The Chinese and Indians are spending lavishly.'

By the way, he charged NZ$20 (HK$106) per passenger for a 30-minute trip and NZ$15 for a photo with his Edwardian punt.

In Queenstown, I joined a farm tour. Our guide Peter spent more than 30 years on the farm before joining the tourist trade. He sheared the sheep, showed my four-year-old the greasy, unprocessed wool and lamented its falling price.

Why has it been falling? He did not talk about seasonal factors or the financial crisis.

Instead, he said: 'The Chinese have not been paying enough. Are you from China?'

In Hamilton, my homestay host, Isobel, shared with us her property investment experience. The grandmother has been waiting for prices to fall further before adding another holiday house.

'But we've missed it,' she said. 'The Chinese are buying, and up it goes.'

People are seeing, hearing and talking about 'China' - its products, its people and its money.

Honestly, I didn't expect this, not in New Zealand, which is nearly half a globe away from China and seems to exist comfortably by itself.

I am a journalist who has been following the mainland's country's development for more than a decade and I am surprised. It's not hard to imagine the feelings of those who suddenly found their lives touched by a country that they know little about, other than it's big and shares a different ideology from theirs. In less than three decades, China has evolved from a maker of low-end goods to the world's factory. And now the buyer of last resort.

No country has done that - not even the once-feared Japan. Shock and ignorance breed misunderstanding and fear. Take Peter's criticism of China depressing wool prices as an example.

Here are some facts, according to New Zealand's Ministry of Agriculture and Forestry:

China is indeed the largest importer of the country's grease wool, but this did not happen until this year's wool season ended in March. The European Union was for decades its largest buyer.

Global wool prices have been falling. But it has little to do with China. 'The collapse of the overseas housing market, especially new house-builds, means far fewer carpets are needed,' said the ministry. 'International wool prices have been in decline as consumers spend less on discretionary items and housing markets slow down in response to the world recession.'

The average sales price of New Zealand wool has in fact been holding up well, rising 8.2 per cent owing to the depreciation of its currency.

An increase in demand from China has more than made up for the drop in EU orders. Together with the increase in price, New Zealand's wool exports fell only 6.8 per cent.

It is fair to say that a Kiwi farmer's life would have been worse without China's buying. Did Peter know this? I doubt it. Would he see it differently if he knew it? I doubt it. Peter is just being normal.

When a robbery happens in a quiet town, it must be the stranger that has just moved in.

And here we are talking about peaceful New Zealand. Imagine what it is like in the rest of the world, most of which has its cultural, economic and political differences with China and its people.

The public relations issue is going to be the biggest challenge to the regime as it enters its 60s and achieves greater prosperity.

On the surface, Beijing is well aware of that. The government is spending billions in cultivating the country's 'soft power'. Anyone hoisting a banner announcing the opening of a Confucius Academy in a foreign country will get about 250,000 yuan (HK$283,625) from the Ministry of Foreign Affairs.

But when you talk to the people, the mood is different, especially after the start of the global financial crisis. Among academics, the concept of G2, which indicates that only China and the United States matter in the world, has stirred up much excitement and discussion.

Among mainland businessmen, getting foreign investors involved is no longer that important. Public relations officers are having increasing difficulty convincing clients, including some major state-owned enterprises, to have simultaneous interpreters or even a press conference in Hong Kong at all.

Among netizens, the rhyme 'In 1979, capitalism saved China, and in 2009 China saves capitalism' has been popular since the Lehman Brothers collapse.

The signs aren't encouraging.