Remarks by Gerry Brownlee

Gerry Brownlee is a member of the New Zealand parliament who previously served as Leader of the House and in a number of Cabinet posts.

The title of this seminar 'China and the challenge of the Pacific' is of interest given New Zealand's long association with the Pacific as a Pacific nation, but also as a country that has benefited enormously from Pacific migration and the contribution that so many Pacific Islanders have made to our economy.

I see the challenges for Pacific governments as three things:

economic independence, climate change, and quality social services.

Pacific Island leaders want for their people, the same as any other country that focuses on the well-being of their people - prosperity, security, good health and education, law and order, good housing and full employment.

Underlying the renewed interest in the Pacific is the reshaping of the geopolitical landscape across the world; how we react to this as it plays out in the Pacific is our challenge.

The question then becomes, how do we capture the current significant interest in the Pacific to strengthen the responses to challenges faced by Pacific Governments?

If the current perceived or speculated tensions between the US and China for dominance of influence in the Pacific serves any purpose, then I hope it will lead all Pacific and Pacific rim nations to recognise the difficulties of life on many Pacific islands. I prefer to see tensions as more of a cultural, economic and environmental challenge, rather than as potential grounds for conflict.

Notwithstanding the history of various warfare actions in World War II, I'm not one who lives in fear of either militarisation of the Pacific or potentially devastating consequences from the full-on conflict between the US and China, played out in the Pacific.

That doesn't mean we shouldn't be vigilant and aware of the shifts in the world's geopolitics. That shift is seen in the decline of the United Nations authority, the expansion of the BRICS countries, the failure of the G7 to condemn the Russia Ukraine aggression, and even the current diplomatic standoff between India and Canada.

The Pacific is not isolated from these changes. So it does require an understanding of how the geopolitical shifts and the repositioning they will bring, could affect the Pacific. I note that as this conference takes place, Pacific leaders are having a second meeting in Washington with President Biden and the US administration. Similar gatherings have occurred in Beijing. These meetings follow on from the offers made to Pacific Governments by China and then countered by the US.

Some of the multiple initiatives on offer from China, have caused concern from outside the Pacific – particularly policing and other security matters. But perhaps the most attractive offer from China is the thousands of educational opportunities it’s willing to provide. Pacific nations will find those hard to decline.

While each of the island nations has its own strong culture, these cultures are significantly augmented by Western democratic values and structures. Education on a large scale in a different culture may over time change things.

I’ve heard it said, that after infrastructure aid projects have been installed in the Pacific, they often follow three phases – build – breakdown with limited repair – and finally, abandonment and replacement. This is because the skills base in many island countries is too small to maintain some modern infrastructure.

Education from trades and technicians, through to advanced degrees, is attractive to island Governments, but so too is the retention of those skilled individuals in their home countries. Provision of greater educational opportunities and rewards in the home countries is a challenge to which we should be giving very serious thought.

The rules-based system has served the free world very well since the Second World War, and many other countries now willingly embrace those concepts and have joined the organisations that give life to those rules.

The greatest threat to the rules-based system could be the consequence of Russia's illegal invasion of the Ukraine. That action alone is a clear breach of the understanding that had been the norm for recognising territorial boundaries.

Consequential multiple sanctions and financial isolation brought down by countries opposed to Russia’s invasion is having effects on almost all economies in various ways. It’s also seen Russia seeking support in both arms and money from a number of African countries where stability is fragile and the rule of law limited. However, the rules based system is worth preserving and is worth developing further. Those rules can be of great value to economies in the Pacific.

They are small economies that need to develop away from their current heavy dependence on remittances and foreign aid. This is no small challenge.

It is a rules-based system that could offer opportunities for new technologies to enable a greater harnessing of Pacific resources for Pacific nations.

A good example of this is the annual losses from unregulated, unreported illegal fishing in the Pacific seen to be approaching a billion dollars a year. That is a multiple of many of the individual islands' current debt commitments.

If nations which have expressed concern about debt traps and other financial entanglements were to assist in the capture of that lost revenue by cooperating to enforce the rules for legal fishing, then some of the concern about the indebtedness of the Pacific islands could fall to one side.

I make the point that recently much has been made of Tonga's national debt post their cyclone. They needed to access significant capital to rebuild what was a much-devastated country.

And so yes, they have taken loans from China. They've done that over a period of years and some of those loans are called for repayment in the next 12 months.

The quantum of the debt from all sources is not in my opinion, troublesome. True, it is a significant proportion of Tongan GDP, around $200 million US dollars. That is a big challenge for Tonga. But considering that building any infrastructure in New Zealand generally starts in the billions, it would seem a manageable amount. The huge amount of aid money available in the Pacific from many donor countries may be in part, better deployed in debt relief, freeing funding for Island Governments’ other priorities.

Handwringing about China filling a vacuum, when other sources of funding were not on offer, is pointless, particularly when the money may well be available to compete — albeit currently held in various countries’ aid budgets

I applaud the concept of peaceful competition. Competition and trade go hand in hand. The trade that China has with the rest of the world tops some $7 trillion dollars, an enormous sum. It's led to 143 countries having China as their major trading partner. It means that the interaction with China of so many nations is now critical to the success of their economies.

One of the questions that is raised about China and the challenge in the Pacific, is the issue of trust. Trust between nations is important. Trust between those who subscribe to the rules-based system is absolutely essential. And I think it's too easy to rely on speculation that it’s a lack of trust alone causing concern about China’s interest in the Pacific.

It's worth noting that the $7 trillion dollar two way trade, while facilitated by Government to Government trade agreements, is not directly conducted by governments but by individual traders, both in China and throughout the world. That trade is substantially conducted on the basis of trust.

So there is very clearly a People to People level of trust, that I think should be recognised in considering how the current interest that China has in the Pacific is positioned.

Looking specifically at the Pacific, the Pacific Island Forum has countries from one side of the Pacific to the other, including New Zealand, Australia in the south, and Micronesia in the north. But in the central Pacific, there are 10 countries that have a population of around 2.3 million people. Some of those countries have very, very small populations indeed.

The forum is an important body for those smaller voices to be heard. For a time, the importance of the forum was not as well recognised as it should be. But if the concept of the Blue Pacific continent is to get legs, the forum needs to be enabled and supported to be the driver of that initiative.

Competition for influence and presence in the Pacific is not going away. A regional voice, given support for coercive influence from all parties to the forum, will strengthen its calls for the needs of all Pacific nations to be seen, heard and answered.

So perhaps the question we should we be thinking about is not so much “China and the challenge of the Pacific”, but rather “the place of China, the U.S and others, in meeting the challenges of the Pacific.”