Hedging on China’s rise: Australia and New Zealand offer lessons on the benefits and pitfalls
- A New Zealand minister’s advice to Australia on dealing with Beijing may be impolitic, but it lays bare the challenges of small nations caught in the US-China competition for influence in the Indo-Pacific region
But, as inappropriate as O’Connor’s remarks might have been, they do raise a pertinent question facing the smaller countries of the Indo-Pacific region: what is the best foreign policy strategy to manage China’s rise?
The region has been experiencing something of an epochal transformation in the past two decades, moving from a region where US hegemony was unquestioned to one where there is now an apparent revisionist challenger: China.
Many believe the coming decades will see the complete breakdown of Sino-US relations. Some argue that the seeds of a new cold war have been sown while others, even more pessimistically, argue that the US will be forced to take pre-emptive action against China. In either scenario, the region’s smaller countries will find themselves navigating an extremely challenging environment.
Typically in such a situation, smaller countries have three options in their basic strategic foreign policy arsenal. One is to strengthen their alignment with the status quo power to offset the security threats caused by the rise of the revisionist power. This is known as balancing.
Another option, known as “bandwagoning”, is to realign themselves with the revisionist power to reap the rewards of becoming a friend.
And the third, arguably more ambitious, strategy is to try and secure a win-win middle ground between the revisionist and the status quo powers. This is known as a hedge.
Most of the smaller countries in the Indo-Pacific have opted for the hedge strategy, but this has become more difficult to execute in recent years. Against this context, New Zealand and Australia offer an interesting comparison. China is the most important export destination for both, yet they are seemingly embarking on wildly different strategies for dealing with China’s rise.
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New Zealand has gone full steam ahead with the hedge option. The government has said it would like New Zealand to act as a bridge between China and the United States. Rather than being forced to choose a side, New Zealand has sought to concurrently align itself with both.
However, acting as a bridge between China and the US has been difficult, and will become even more so if the Sino-American relationship deteriorates further. Maintaining positive relations with both requires skilful diplomacy, resting on an ability to project a non-threatening appearance while also maintaining ambiguity in foreign policy signalling.
The benefits of having strong relations with both sides come at a cost. One limitation is the need to remain somewhat muted on topics which are sensitive to either country, particularly China, given its penchant to lash out at any outside criticism.
Although Prime Minister Jacinda Ardern and others in the New Zealand government have at times criticised China over issues such as Hong Kong and the treatment of Uygurs, this was done in an extremely careful way.
Yet, it is likely that a hedge remains the optimal policy on the table for Canberra, but one that does not require constant kowtowing to Beijing.
It is hard to see which strategy is the best one to deal with China’s rise in the long term. China might be a great source of revenue for the smaller countries of the Indo-Pacific region, but it has also proven to be an impetuous and thin-skinned partner at times.
But, on the other hand, the US is hardly a bastion of stability any more, particularly as its domestic issues continue to distract it from playing a consistent security role in the Indo-Pacific region.
While O’Connor’s remarks were delivered in an ill-considered way, there are some pearls of wisdom to his argument, as erring on the side of being more diplomatic is probably the safest strategic option right now for the smaller countries in the region.
Nicholas Ross Smith is an associate professor of international studies at University of Nottingham Ningbo China