Opinion | 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

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Published: 9:15am, 4 Feb 2021Updated: 11:05am, 4 Mar 2021

Australia and New Zealand ended up in a minor diplomatic squabble last week after New Zealand trade minister Damien O’Connor said in an interview that if Australia “were to follow us and show respect” by engaging “a little more diplomacy from time to time and be cautious with wording”, then it could have as positive a relationship with China as New Zealand does.

It is no secret that Sino-Australian relations are in a particularly low trough at the moment and O’Connor’s advice was probably unappreciated in Canberra. Officials there would probably have preferred more solidarity from their old friend.

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.

New Zealand trade minister Damien O'Connor speaks at a press conference on the upgraded free trade agreement with China, in Wellington on January 26. O’Connor’s remarks on Australian diplomacy towards China have sparked a minor row. Photo: Xinhua

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.