OPINION: Predictions are not easy, especially when it comes to China. But here are 12 predictions from us for 2022.
Will New Zealand’s relations with the People’s Republic of China deteriorate in the 50th year of diplomatic relations, like Australia’s?
New. Foreign Minister Nanaia Mahuta has learned to fine-tune New Zealand’s responses to Chinese provocations, to go as broad as possible with his Five Eyes partners without irritating the Chinese or creating unrealistic expectations. Both the Chinese and the Americans (who matter) will put up with this. This will be the case as long as New Zealand doesn’t do anything too daring like speak too loudly or protect a Hong Kong dissident, which it won’t do.
Will China invade Taiwan and leave New Zealand midway between Beijing and Washington?
New. The Chinese military is not yet ready to launch an attack on Taiwan. However, the saber rattling continues. This is mainly about frontline training and preventing Washington from deviating too far from previous agreements on Taiwan. A time to wait for is 2024, when the next presidential election will take place in Taiwan. The incumbent Tsai Ing-wen has served her maximum term of two terms. Beijing finds dealing with the Nationalists (Kuomintang) in Taiwan easier than the ruling Democratic Progressive Party, and will do anything to get another Kuomintang president.
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Will China avoid open conflict elsewhere?
Yes. Conditions in the South China Sea, a potential flashpoint, will remain largely unchanged, with China controlling much of the sea. Freedom of navigation or “defensive drills” by the US Navy, with marginal support from others, including New Zealand, will have little effect. Relations between India and China remain unstable, but neither side wants another bloody border dispute. China’s relations with Japan will remain tense, but no more. Elsewhere, China will try to maintain the status quo and push through international organizations to legitimize it. An exception is Ukraine: if Russia invades, China will give its unwilling support.
Will Xi Jinping strengthen his power at the party congress at the end of this year?
Yes. He has already lined up himself and his propaganda apparatus, with a recent party plenum endorsing a new version of history that suits him. So far, rumors of opposition to his rule have proved untrue. That said, conventions are always a time for internal party bickering. Still, Xi is likely to emerge from Congress with even less overt opposition than before. He may even become party chairman, a position no one has held since Mao. In China, this won’t make any difference, as one of his current positions, state president, is “chairman” in Chinese.
Will the Chinese economy turn inward and negatively affect foreign trade?
New. Chinese leaders talk about dual circulation, meaning you do what you can within China, and the rest is only managed externally. Despite this, China’s foreign trade has held up remarkably well even during Covid. The same applies to the pace of economic growth. That may slow this year and next, but in line with the slowing growth inevitable for an economy the size of China. The Chinese appear to be serious about joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) of which New Zealand is a member. If they succeed, which is quite possible, China’s outward orientation will be strengthened.
But what about new restrictions imposed on large companies such as Ant and Didi, as well as on private education, children’s video games and cryptocurrencies? Don’t these tell us that the Chinese economy is changing?
Yes. But they are part of an effort by Xi and the party to control data, including individual data, reduce unexplained monopolies and promote greater equality of incomes and lifestyles among ordinary Chinese. The party opted for the latter policy in 2017, but got off to a slow start. None of this means the Chinese economy is shifting away from international trade and investment, or the private sector, the main driver of growth. The bankruptcy of housing giant Evergrande will leave a major dent in the private sector, but will be resolved.
Will New Zealand’s trade with China continue to grow rapidly?
New. The share of New Zealand exports to China grew to 31 percent of the total by 2021 and Chinese demand is likely to remain stable in 2022, but New Zealand companies are now wary of putting too many eggs in one basket. The debate on over-dependence and risk has gained more attention and efforts to balance trading portfolios through new economic agreements, such as the free trade negotiations with the UK and the EU, are starting to pay off. New Zealand, like most countries, will maintain strong trade ties with China, but the rapid growth of recent years has come to an end.
Will China’s relations with America remain as they are?
Yes. They can even improve a little. The Joe Biden administration has maintained many of Donald Trump’s positions on China. But it is quietly taking steps to stabilize the relationship on things like climate change and military talks. Chinese leaders see the US shifting to a more hostile long-term view of China, but want to restore acceptable relations and prevent further unwanted moves from Washington. For example, it could be an embargo on the export of high-quality chips to China, which would pose a major problem. All this is true until the US presidential election in 2024, at which point all bets are off.
What about China’s relations with Australia? Will they get better?
New. But they won’t get any worse either. Sino-Australian economic relations have been much less affected than the headlines suggest, with only certain sectors, such as Australia’s wine exports, really being hit. China continues to need things that Australia supplies, such as iron ore. And China’s nagging and puffing about nuclear submarines may hide a concern that potentially hostile partnerships like Aukus aren’t becoming the trend. That said, China will continue to use trade as a political tool when it sees the need.
What about China’s relations in the South Pacific? Will diplomatic, trade and investment ties intensify and will the Pacific remain a bone of contention?
Yes. China’s investment in the South Pacific, particularly through soft loans and Belt and Road projects, has slowed in recent years. But as in so many parts of the world, China’s longstanding commitment to diplomatic and economic relations with countries in the South Pacific is clear. Expect this to continue steadily and get off the ground after the journey resumes. Issues of strategic intent, the location of potential military bases and debt diplomacy will continue to haunt commentators, but are unlikely to change drastically by 2022.
Will the mass outflow of Chinese students and tourists in New Zealand resume?
New. China won’t open until Omicron, and any likely successor soon-shipped, dies. That’s not going to happen this year. Depending on New Zealand’s policy towards foreign tourists, some Chinese tourists will return, but from places like Taiwan and Singapore rather than the PRC. For students, the door will not remain closed for too long. But over time, more Chinese students will be drawn to China-based foreign university campuses, and to China’s own increasingly high-quality tertiary education sector.
Will China continue to violate civil and political rights in Xinjiang and Hong Kong?
Yes. The new party secretary in Xinjiang, Ma Xingrui, is unlikely to be any worse than his blatant predecessor Chen Quanguo. He will play the same anti-terrorist tunes as he tries to control the news of the continued repression of Muslims. In Hong Kong, civil and political liberties are a thing of the past. There will be a change of leadership from Carrie Lam, the hapless chief executive, to another pro-party figurehead. But the policy does not change. Repression will indeed increase as party apparatchiks, after suppressing the free media, target lawyers, scholars and teachers.
Jason Young is director of the New Zealand Contemporary China Research Centre, where Peter Harris is a senior fellow.