The trade tension between China and the United States is unprecedented. Even if the Democrats win next year, US attempts to contain China will shift only in style, not objective. The US will block Chinese technical innovation wherever possible, stem its rise, and coerce partners and allies to do the same.
This situation presents ongoing crises for Western nations such as New Zealand, for it is not simply a choice between Beijing and Washington – both are vital relationships. Politicians and diplomats are tempted to appease as many interests as possible, but they often end up losing the trust and respect of all. This is now Australia's status in Asia, and is swiftly becoming Canada's. The New Zealand Government has a good track record of acting according to its own principles and those of international law, even when its actions may evoke the ire of its strategic partners. It needs to draw on that legacy now.
New Zealand can resist the overly dramatic US characterisation of its trade conflict with China as a 'cold war'. It is not a cold war, it is trade war. The US's cold war with the Soviet Union was founded on a competition to export political and economic systems and gain maximum commercial influence, yet neither was dependent economically on the other. China and the US are inextricably linked economically, and their own as well as the balance of global trade depends on their ultimate co-operation.
Over the last three years, the US has tried to dissuade its friends from joining the Asia Infrastructure Investment Bank (AIIB), a much-needed funder of infrastructure projects in Asia. The AIIB nevertheless has 86 members, the largest borrower India with USD4.4 billion, even though India is the neighbour with which China is most frequently in dispute. The Belt and Road Initiative (BRI), is another focus of Washington's chagrin, characterised as an instrument of Chinese coercion.