\u201cYou can\u2019t prepare yourself to be the best rugby team in the world and then discover the competition is actually ballet,\u201d says Woods, a New Zealander and graduate of the University of Auckland who has lived abroad for decades.<\/p>\n
Our current way of stepping back and letting the market do its work doesn\u2019t make sense in a world where China and the US are pursuing industrial policies to support national champions.<\/p>\n
\u201cWe\u2019ve come through 35 years of believing that the government should really just be this sort of cocktail party hostess, ushering different businesses and market players,\u201d she tells The Detail.<\/p>\n
But China and the United States are not supporting open markets.<\/p>\n
A decade ago, Beijing laid out a \u2018Made in China 2025\u2019 strategy that led it to become a global leader in solar panels and electric cars. Meanwhile, the US \u2013 under both the Biden and latest Trump administrations \u2013 has put export controls on advanced computer chips to stop other countries (mainly China) catching up with the United States.<\/p>\n
\u201cThey\u2019re weaponising interdependence,\u201d Woods says. \u201cThey\u2019re weaponising trade policies, subsidised credit, investment controls, to create a world in which countries need economic alliances, and to create a world in which other countries need to think really carefully about what kinds of industrial policy work.\u201d<\/p>\n
Woods says what governments need to do is create a sector in which Kiwi companies compete vigorously with one another, and which strengthens them for when they go out into the world.<\/p>\n
\u201cNew Zealand government officials and politicians are going to have to learn very fast what are the industrial policy muscles we need and how are we going to do that in a world where that\u2019s what winning economies do.\u201d<\/p>\n
Backing industries \u2013 rather than companies \u2013 would enable them to compete at home and strengthen themselves for the global marketplace, Woods says.<\/p>\n
\u201cIs New Zealand doing enough to make its economy resilient, and to make its businesses competitive enough to survive when they go into the rest of the world?\u201d she asks.<\/p>\n
Woods sits on the board of Rio Tinto, a multi-national mining company, and says when they think about global supply chains now, they\u2019re not just thinking about where they\u2019re going to get the most efficient price or supply.<\/p>\n
\u201cThey\u2019re thinking about within which economic alliance is that nested, and how is that going to affect our resilience in a much more geopolitical world?\u201d<\/p>\n
That\u2019s a big change in mindset for us, she says, but also brings huge opportunity for New Zealand if we can navigate that very different world.<\/p>\n
\u201cWe were all brought up with a mindset which was to think that we were playing in a rules-based order. And suddenly we have to change our mindset into one which is far more geopolitically attuned and far more proactive in what governments need to do.\u201d<\/p>\n
This Saturday episode is made with funding from the Peter M Acland Foundation.<\/p>\n
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