Risks of A Recession Mount in NZ

Messing In Our Own Nest

New Zealand is probably heading into an economic downturn.  It is too early to speculate on how deep or long the "recession" will be.  The irritating truth is that any downturn will have been largely of our own making.

Firstly, New Zealand is unable to get "cut through" with the United States.  We have been hit with a substantial tariff on our steel exports to the US.  There has been no "best friends" relief.  There is no free trade agreement with the US in sight.  Why the obstacles?  Well, NZ is very small in the grand scheme of things.  At the very time when NZ needed as much negotiating coin with the US as possible, we have elected a neophyte as Prime Minister whose "bestie" on the world stage is Canada's Trudeau. 

Our Prime Minister, Jacinda Ardern lacks the depth of a puddle in a parking lot.  Her most significant achievement is noting with famous people whilst overseas and managing to get a few photos taken so as to increase her profile back in NZ.

At the same time, we have managed to rile up China.  Now this may or may not be a serious matter.  We have a double mind with respect to the current president of China who has now engaged in one of the worst human rights abuses on the planet.  Premier Xi Jinping is happily engaged in smashing to bits one of its minority ethnic groups--the Uighurs, who are Islamic in faith.  He is also responsible for the suppression of Christians.  He is showing every sign of being a reincarnation of Mao Zedong.
 
As China enters a period of Cultural Revolution Part II it would be very helpful to be in a situation where one of its "best friends", New Zealand could both protect and maintain our free trade agreement with China, and also raise our concerns over human rights breaches by the Chinese government.  Sadly, our coin has lost its lustre.  NZ must now have put its free trade agreement with China in jeopardy.  It has lost its "best friend" status. 

So, here we are.  We have offended the United States.  We have offended China.  The economic ramifications are going to be felt keenly.  Hence, our belief that we are likely heading into a significant economic downturn. 

Global Times is one of those media outlets that represent the party line in China.  It recently carried an article, doubtless originating with the Chinese Government itself , claiming that NZ is falling out of favour as a tourist destination for the Chinese.  It threatens economic "pay back" for our refusal to permit Huawei to do business in NZ. 

New Zealand's strained political relationship with China - following the ban of Huawei from building part of its 5G networks - is costing the country more than it can afford.  That's especially true in its tourism industry which China has become the nation's second-largest source of visitors and contributed millions of dollars to its annual tourism income.

In the latest move, China postponed an event to launch the 2019 China-New Zealand Year of Tourism, which had been scheduled to take place on February 20 at Te Papa in Wellington, New Zealand, New Zealand authorities said on Tuesday, according to a Reuters report. It is not clear when the event will be rescheduled. The organizer of the event did not respond to an interview request by the Global Times as of press time.

Bilateral relations have soured since November, after New Zealand followed certain Western countries' moves and barred Chinese telecom equipment maker Huawei from building a 5G local network, citing national security reasons. The move sparked widespread complaints among Chinese netizens.

It is becoming increasingly obvious that our immediate economic future is no longer in a "safe pair of hands".  The government has managed to mess in its own nest.  Welcome to amateur hour.  Let's start to take stock before recession bites.