Impact of China-US-North Korea tensions on NZ businesses
NA CAPE seminars address impact of China-US-North Korea tensions on NZ businesses
29 November 2017
What do the emergence of a strong China, a nationalist US president, and a nuclear-capable North Korea mean for New Zealand businesses?
Four respected business and academic leaders addressed this and other pressing geopolitical and economic concerns at the recent regional seminar series, "Trump, Kim and the nuclear codes".
Held in Hamilton, Auckland, Dunedin and Wellington, the seminars were presented by the North Asia Centre of Asia-Pacific Excellence (CAPE). The North Asia CAPE is committed to strengthening New Zealand’s economic and cultural ties with Greater China (including Hong Kong and Taiwan), Japan, and Korea.
Dr Reuben Steff (University of Waikato) argued that US President Trump’s seemingly erratic approach to foreign policy is actually a deliberate "dealmaker" strategy designed to position the US for eventual negotiations on terms favorable to Washington. While tensions appear to rise with every tweet and insult hurled by Trump and the DPRK’s Kim Jong-un, Dr Steff predicted the "status quo" – inflammatory rhetoric rather than a nuclear attack – is the most likely scenario for now.
To help New Zealand businesses navigate this instability, Dr Steff advised they appoint staff that are geopolitically literate, capable of strategic foresight, and can offer critical assessments tailored to their specific business interests. Keeping an eye on the domestic political developments in the US and North Asia is essential.
Dr Stephen Noakes (University of Auckland) focused on the brokerage role of China in the North Korean missile crisis, emphasising the shared histories and, to some extent, identities, of China and the DPRK. He said these commonalities inform China’s response to North Korea and serve as critical reminders of the power of cultural and national motivations over economic and political drivers. However, Dr Noakes noted the historic closeness between China and the DPRK is being severely strained by recent events, and the increasingly erratic behaviour of the DPRK.
Professor Siah Hwee Ang (BNZ Chair in Business in Asia at Victoria University of Wellington) posited that world trade is slowing and protectionism is on the rise. Professor Ang said the resurgence in nationalism is challenging for New Zealand, particularly with the inevitable slowdown of China’s economy. New Zealand business must leverage opportunities as China moves from manufacturing to innovation and service-based industries.
"Know your customers and stay in touch if possible," Professor Ang advised. "Understand what they buy, how they live. Do not take ‘NZ brand’ for granted as the value proposition. Language barriers can be overcome through training or by working alongside native speakers, ideally those who understand who we are and how we work."
Dr Raymond Xia (University of Otago; former head of marketing of RedBull, China) echoed Professor Ang’s call for New Zealand business to understand the North Asia markets. He explained that, even though China opened to the rest of the world nearly 40 years ago, traditional values inform Chinese culture and behaviour. He said awareness of Chinese cultural principles (e.g., harmony, Guanxi (networking), face, and conformity) is key to building sustainable, long-term relationships.
"The North Asia CAPE’s first regional series created an important opportunity for key opinion leaders and stakeholders across the country to come together and share ideas," says the University of Auckland’s Professor Jenny Dixon, Pro Vice-Chancellor (Strategic Engagement). "The lively discussions ranged from geo- and personality politics to practical tips on how to succeed in a complex and fast-changing economic environment."