US Secretary of State Hillary Clinton jets into Rarotonga today to attend the Post-Forum Dialogue of the 43rd Pacific Islands Forum. The leaders of the 15 countries attending the forum – including Prime Minister John Key and Australian Prime Minister Julia Gillard – have been discussing a number of environmental, security and economic issues, with a particular focus on renewable energy, development assistance, and climate change.

Clinton’s visit is significant for New Zealand, not just because it adds more weight to the dialogue but because it underscores Washington’s mission to increase its strategic and economic presence in the South Pacific as a counterweight to Beijing’s growing influence in the region.

In an article in yesterday’s New Zealand Herald, Key said that China has “grown tentacles around the world”. China’s expanding diplomatic and economic influence in the Pacific Islands – most visible in increased aid, loans and investment – has been described by Victoria University scholar Marc Lanteigne as a form of ‘soft balancing’ power aimed at Washington’s presence in the region.

Although we don’t hear a lot about it in New Zealand, the geopolitical tensions underlying China’s growing influence in the Western Pacific, and America’s relative economic decline, are hotly debated in Australia. Canberra, of course, shares a much deeper strategic relationship with Washington than Wellington does. Unlike New Zealand, Australia is still committed to a formal military alliance with the United States, highlighted by the Gillard government’s decision to allow Washington’s deployment of 2,500 Marines at a base near Darwin.

But as the great powers compete for influence at our doorstep, New Zealand can hardly turn a blind eye to the tensions emerging in the US-China relationship.

Local China watchers will be listening with interest to Key’s opening speech at a China symposium at Parliament next week to mark the 40th anniversary of the establishment of New Zealand-China diplomatic relations.
Among a myriad of high-profile speakers are former Deputy Prime Minister Rt Hon Sir Don McKinnon, BNZ chief economist Tony Alexander, and Asia-Pacific editor of The Australian, Rowan Callick.
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It’s good to see that part of the symposium is dedicated to the challenges ahead for the New Zealand-China relationship. In the coming decades, New Zealand will have to confront the issue of living in an environment in which a bigger and stronger China may play a much more influential role, not only in trade and economics but in the diplomatic and military spheres as well.