4th hand sources

Fairfax has been running a story for several days that alleged very senior China official were threatening a trade war with New Zealand because of a complaint with MBIE about steel imports allegedly being dumped in NZ.

One of the so called sources has clarified in NBR that in fact he could find little substance to it:

The star witness in the China trade war rumours that has erupted over the past couple of days says the story is a dud.

Former trade negotiator Charles Finny says he was quoted out of context in a Sunday Star Times story alleging China is pressuring for an investigation into steel dumping to be dropped – and that his own investigations indicated the rumour was baseless.

The editor asked Mr Finny to ring around. He duly obliged. But when he called contacts he had made during his time with Prime Minister’s Department, the Department of Trade and Industry and the Ministry of Foreign Affairs and Trade, the former China FTA negotiator drew a blank. No one had heard rumours of any China pressure on exporters on exporters – bar one source in the Beehive who had heard that the topic had been raised with an exporter in China but by a person at a Chamber of Commerce-type organisation.

So this seemed to be the basis of a major story which gave the impression that the Chinese Government at senior levels was planning trade restrictions.

A later story in Stuff claims vindication on the basis that Zespri knew of the approach. But look closely at the actual details:

In a major backdown, the Government confirms it was told a Chinese industry body had approached a New Zealand exporter, venting anger over a complaint against alleged steel dumping practices. 

But Trade Minister Todd McClay says Mofcom – China’s trade ministry equivalent – has denied any knowledge that an approach occurred. 

So the allegation is that someone from a Chinese industry body made a threat, not the Government (which knows nothing of it). But again look at the actual details:

Zespri released a statement following McClay’s comments, saying it’s local staff in Beijing received “unsubstantiated information” from an industry body in China on “purported industry consultations related to the import of New Zealand agricultural  products”.

So a local Zespri staff member received some unsubstantiated information from an industry body, and this is the basis of the entire front page story.

This is like saying that because someone from Federated Farmers says they have heard some gossip about what the NZ Government will do, that this is proof the Government is planning a trade war.

The story was worth reporting, but not in the way it was. I think the original story was quite misleading as to the source of the so called threat, and that it represented the view of the Chinese Government. The original story said:

China has threatened “retaliatory measures” against New Zealand trade, warning it will slow the flow of dairy, wool and kiwifruit imports. …

But somehow, China learned of the application – and it is taking retaliatory action.

In the past week, representatives of New Zealand’s biggest export industries have been called in by Chinese officials, and told to exert their influence to make sure the MBIE investigation does not go ahead.

Those paragraphs are not supported by the facts now emerged. China is not taking retaliatory measures. No representatives have been called in by Chinese officials, and there is no demand the investigation does not go ahead. The far less sensational story is that a Chinese industry body said that they had heard there was an investigation.

My suspicion is that the story was fed to the Sunday Star-Times by NZ First, and they ran it on the basis of a fourth hand verification that someone heard someone from someone.

As I said the story was worth reporting, but the way they do so was over the top. What is annoying is they won’t admit their original story was overblown. Here’s their latest:

Dairy giant Fonterra told Government officials  it had been approached by Chinese commerce representatives, warning of reprisals if they did anything to compromise Chinese steel imports.

It’s the latest revelation in a series of about-turns about the Government’s knowledge of Chinese threats of a wider trade war.

Fairfax are desperately trying to keep the story alive, but again read beyond the first two sentences.

Fonterra director for global stakeholder affairs Phil Turner said there had been “rumours on the ground that Fonterra concluded were simply that – unsubstantiated rumours“.

“Fonterra has not received any threats, has not been approached by the Chinese Government, and does not have any information related to the rumours which includes the source of the initial speculation.”

What is amazing is that their own story contradicts them. They start claiming vindication and keep using the language of warning of reprisals, and the actual quotes from Fonterra say quite the opposite.