War in Taiwan could hit New Zealand trade hard, executives say

Minister of Trade Todd McClay.

Executives were asked in the Herald’s Mood of the Boardroom survey whether they are concerned the China-Taiwan conflict could escalate into war and if it would affect New Zealand’s interests.

Some 68% of business leaders say they are concerned. The remaining 22% are not, while 10% say they are unsure.

China’s significance to New Zealand’s economy means any disruption to trade would have far-reaching effects.

Barfoot & Thompson managing director Peter Thompson reflects this concern.

“China is a big player for New Zealand business, and if war broke out, trade deliveries would be slowed, having a huge impact on businesses back here, similar to during the Covid period.”

Complicating matters further is the delicate geopolitical balancing act New Zealand faces.

“Our two biggest trading partners at war with each other would be a nightmare for New Zealand,” warns NZ Windfarms Director Craig Stobo, referring to the United States, which last year overtook Australia to become New Zealand’s second-largest trading partner, and highlighting the complexity of New Zealand’s position.

Despite this anxiety, some respondents are confident that the situation will not escalate.

Les Morgan, who runs the Sudima hotel chain in New Zealand, trusts that “the economic impacts of such action will temper any desire to pursue formal action”, while a logistics executive suggests that “China will not invade Taiwan, they will get control economically over the century”.

Some have broader concerns over inadvertent escalation.

“I worry about the likelihood of a proxy conflict or miscalculation leading to conflict,” a public sector CEO says.

The long-term implications of such a conflict go beyond mere trade disruptions.

“The risks associated if China and Taiwan go to war extend far beyond the region, with profound economic, military, humanitarian, and diplomatic consequences,” the New Zealand head of a US-headquartered multinational says.

Others note that while New Zealand may not be directly involved, the country must be prepared for the fallout from any escalation.

Deloitte chair Thomas Pippos warns: “This is a real risk, with care required to ensure matters don’t escalate to that level — accepting that New Zealand will not be the cause or protagonist.”