The Fonterra botulism scare will become a small blemish on New Zealand’s future relationship with China, according to the British author of a bestseller on the eastern superpower.

New Zealand will continue to be significant beneficiary of China’s growth said Martin Jacques, author of When China Rules the World.

“By a stroke of great geographical fortune [New Zealand] is in a position to develop a strong economic relationship with the Asian mainland. The effect of it will be economic, but in the long run will be intellectual, cultural, in some ways political,” said Jacques, who is the keynote speaker at a Massey University forum on New Zealand’s place in China’s historic growth.

The botulism scare has made a significant dent in New Zealand’s exports to China, but the damage will be short term and should not be overestimated, Jacques said.

That, however, is little comfort for exporters who have seen their business take a huge hit from a Fonterra crisis they had nothing to do with.

“It is one things to say it is going to come back, but when? And in the meantime people have lost their jobs,” said Chris Claridge, managing director at dairy exporter Carrickmore Nutrition.

The long-term health of the dairy industry in China is irrelevant to companies that have seen their business in Asia evaporate as Chinese consumers perceive their milk as poisoned.

“He is talking about macro economic issues. He is talking about supply and demand issues. He’s an academic. This is personal,” Claridge said. Jacques argues that New Zealand being the first developed country to sign a free-trade agreement with China will hold greater weight than the botulism fear.

“The Chinese value continuity of relationships. They value loyalty,” he said. “It is part of the Chinese way of thinking about things.”

Probably the most important factor, though, is respect for its political affairs. Historic Western arrogance meant many developed nations looked down on China.

Now China will punish you economically if you cross them politically, Jacques said. In 2012 China demanded an apology from the UK prime minister for his meeting with the Dalai Lama. The icy relations could cost the UK billions of dollars.

After the Chinese dissident author Liu Xiaobo was awarded the Nobel Prize in 2010, the Chinese immediately stopped fair trade talks with Norway. Only now, three years later they have resumed.

“If New Zealand really wanted to score an own goal now, the government would invite the Dalai Lama to pay a visit,” Jacques said. Instead, there was a 21-gun salute from three Chinese warships as they entered Auckland harbour on Friday.

Milk powder dominated John Key’s discussion with Chinese President Xi Jinping at last week’s APEC meeting in Bali but the apparent lecture on food safety by Xi was criticised by Chinese citizens who face regular and serious food scandals.

Many took to the Chinese social media site Weibo to mock the the president for daring to reproach New Zealand’s food safety record, the Wall Street Journal reported.

And as the Chinese consumer becomes more savvy, New Zealand must ensure it preserves its reputation as a supplier of safe, quality food, Jacques said.

“As the Chinese move up the value chain, as consumer standards are raised, it is really important companies like Fonterra don’t cut corners, are on the side of the Chinese consumer, rather than taking advantage of the Chinese consumer, or exploiting the Chinese consumer,” he said.

China is projected to overtake the US as the world’s largest economy within five years according to the Economist, but in the long term China will also overtake the US in its cultural and political influence.

“For 200 years the world has become habituated to western culture. Firstly European, then American. How we are going to be changed in the long term, is by the deep Chinese culture,” Jacques said.

Soon Chinese film, Confucianism, Chinese literature, the aesthetics of calligraphy and oriental art will all become familiar to the West, said Jacques. China will have a growing influence on our society and political structure too. The importance of family will grow, against the individualism of the West. And the Chinese idea of statehood will change our ideas of democracy.

“New Zealand, in its modern form, was a western creation [but] you are coming under the growing gravitational pull from China,” Jacques said, adding we must quickly adapt to the Asian influence to make the most of our strong relationship with China.

— Simon Day

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Updated and expanded new Chinese edition just released.

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Turkish edition just published!

When China Rules the World is the first book to fully conceive of and explain the upheaval that China’s ascendance will cause and the realigned global power structure it will create.

New edition available now from:

Amazon UK
and all good booksellers.

US second edition is available now via: 

Amazon US