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Shipley and the China Council

07/03/2019

Following a recent court decision there has been considerable media and other comment on the role of former NZ PM Dame Jenny Shipley.

The other day (06032019) Morning Report had this

Dame Jenny Shipley’s sudden resignation as chair of China Construction Bank New Zealand has raised questions about whether she will also quit the board of the New Zealand China Council. Her position there has been under scrutiny since a High Court ruling about the failed construction company Mainzeal. Michael Reddell is a former Reserve Bank economist who has written extensively about China. He talks to Gyles Beckford.

Michael Reddell also addressed this issue in a blog post, which Adam suggests is read in full, but his conclusion is worth considering:

Whatever other contributions Jenny Shipley may have made over the years, her record at Mainzeal now means that she diminishes the standing and reputation of any body or individual that continues to use her in governance roles, or which support her in such roles.  Foremost among those now, the Prime Minister and the China Council itself.   As one expert noted in the Dominion-Post this morning, the market has ways of taking care of these issues – Shipley (and her other fellow Mainzeal directors) might now struggle to get directors and officers liability insurance.   But those mechanisms can’t protect us when it comes to public bodies. Only leadership protects us there.  But at present there seems to be a void – an abdication – where leadership on this issue should be.

Mr Reddell has written extensively and comprehensively on NZ involvement with China. Adam does not necessarily agree with all of his comments, but he makes some very relevant points which are well worth considering. Adam recommends that anyone who is interested read his posts on the China-NZ nexus. They repay reading. His comment, noted above on leadership is very pertinent.

Then this morning (07032019) Morning Report ran this piece:

The New Zealand China Council is biting back at claims it serves as a propagandist for China. The former Reserve Bank economist Michael Reddell told Morning Report that Dame Jenny Shipley should not sit on the council’s board, which receives taxpayer funding. He also says the China Council needs a shake up in the wake of the Mainzeal ruling. But the New Zealand China Council’s executive director Stephen Jacobi says Michael Reddell’s got it wrong. 

“It quite put me off my muesli yesterday morning,” he tells Guyon Espiner.

“New Zealand and China disagree on fundamental issues… but that shouldn’t stop us developing a relationship in the areas it makes sense to do so.”

Now, this does not on first blush sound too bad,though the attempt as Adam saw it to trivialise Reddell was rather petty. Jacobi seemed to Adam to be rather defensive.

Reddell wrote a further piece today in which he demolished much of what Jacobi said

These extracts are relevant:

It was a fairly soft interview that really did nothing to dispel the suggestion that the China Council – substantially funded by the government, with two very senior public servants on the Board – serves, in effect, as a propagandist for Beijing’s interests. The fact that the people involved probably think they are primarily serving their own commercial interests, and perhaps even some warped conception of the national interest, doesn’t change that. Unfortunately, the interviewer didn’t ask Jacobi for a single example of a case where the China Council had been critical of the PRC. For the record, I haven’t been able to find a single example.

Soft interview, it made marshmallows look like solid granite

Then and dammingly in Adam’s view, Mr Reddell wrote:

With a full week having now passed since the High Court judgment was handed down, and with the Prime Minister not willing to express any concern, it looks as though she is going nowhere. In fact, Jacobi went on to speak highly of Shipley (former Prime Minister, “widely respected in China”), and to note that the China Council is not a financial institution or a commercial organisation. That’s true. It is more than that; it is a New Zealand government sponsored organisation. I’m sure there is some fondness for Shipley in Beijing – cover for Jiang Zemin against protestors all the way through to interviews declaring how wonderful the Belt and Road Initiative is. But this is someone who presided over the failure of a major company in New Zealand, allowing it to trade for years while insolvent, failing in her basic duties. That isn’t acceptable conduct in New Zealand. A person with that track record – perhaps especially when a former Prime Minister – shouldn’t be holding high-profile semi-government appointments. For her to keep on doing so tells you about the Prime Minister’s, the Foreign Minister’s, and the China Council’s Board and Executive Director’s values and priorities. Again, it wouldn’t appear to be decency and integrity.

Now the relationship between NZ and China is fraught with the potential for difficulty. The Chinese are very sensitive to nuance, but there are ways to make a point.

Unfortunately our government, especially the PM , the Foreign Minister do not understand that. Furthermore allowing Shipley to continue on the China Council sends entirely the wrong message. Consigning Shipley to the outer darkness might well send the right message. That is the kind of message the Chinese understand.

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