New Zealand’s conservative National Party, one of the country’s two major parties of big business and imperialism, remains in a state of crisis following its second-worst election defeat ever on October 17.

The party got just 26.8 percent of votes and 35 seats in the 120-seat parliament, compared with 56 seats in the 2017 election where it won 44.4 percent of the votes. National leader Judith Collins announced there will be a review into “what went wrong” in its campaign and over the past three years in which the party was riven with in-fighting. The Labour Party, led by Prime Minister Jacinda Ardern, increased its share of the votes from 36.9 percent in 2017 to 49.1 percent, enough to get 64 seats in parliament.

The election was held amid a global surge in coronavirus cases and the growing danger of dictatorship and war, centred in the United States. Working class struggles are erupting in country after country to demand safe working conditions and oppose social inequality.

The Labour Party is negotiating a deal to bring the Greens into the government, in an attempt to provide a “progressive” fig leaf for its right-wing agenda, which will inevitably provoke opposition among workers and young people. The Ardern government’s unprecedented multi-billion dollar handouts to the banks and corporations, accompanied by a wave of pro-business restructuring and mass redundancies, have already produced soaring poverty and inequality.

Labour has replaced the National Party as the preferred party of big business and the rich, with many wealthy areas switching their support to Labour in the election. Labour benefited from overwhelmingly positive media coverage, in NZ and internationally, of Ardern’s pandemic response. In fact, the government’s lockdown in March, which prevented mass deaths, was imposed due to fears of a developing movement in the working class, not the benevolence or wisdom of Ardern.

The National Party’s turmoil contributed greatly to Labour’s landslide victory. For several years, National has been the target of a destabilisation campaign by sections of the ruling elite which oppose its advocacy of close business links with China.

The Ardern government has greatly strengthened New Zealand’s integration into US preparations for war against China. The drive to war is accelerating rapidly in response to the economic breakdown triggered by the pandemic. In the lead-up to the November 3 US election both Republicans and the Democrats are continually demonising China, which is viewed as the main economic rival to the US and the chief obstacle to its global hegemony.

New Zealand’s support for the US build-up to war was not discussed in any of the four pre-election debates between Ardern and Collins, although both leaders pledged to continue working closely with Washington. The political and media establishment fears that open discussion about the danger of war would trigger an anti-war movement even more explosive than the mass protests that erupted in 2003 against the US invasion of Iraq.

The 2008-2017 National Party government led by Prime Minister John Key significantly strengthened trade and investment ties with China, which became New Zealand’s largest trading partner. Since 2007, two way trade has increased from $10 billion to $30 billion.

At the same time National maintained a strong alliance with US imperialism; it continued New Zealand’s participation in the criminal wars in Iraq and Afghanistan, invited the US military to train in New Zealand and expanded NZ’s role in the US-led Five Eyes mass surveillance network—all with bipartisan support from the Labour Party.

This fraught balancing act became increasingly untenable as the US ramped up its economic and military encirclement of China under President Barack Obama’s “pivot to Asia” strategy, demanding that US allies fall into line. After 2016, President Trump announced trade war measures against China and stepped up military threats.

Beginning about 2012, the National government came under increasing attack from the Labour Party and the right-wing nationalist NZ First for encouraging Chinese investment and immigration. In the lead-up to the 2017 election this developed into a full-blown McCarthyite campaign, with sections of the media promoting the pro-US academic Anne-Marie Brady, who accused National of being a tool of Chinese interests.

The September 2017 election was marked by blatant US interference aimed at strengthening the alliance against China. When neither Labour nor National gained enough votes to govern alone, both parties spent four weeks trying to form a coalition with NZ First. This rabidly anti-Chinese party was able to choose the government, despite only getting 7.2 percent of the votes.

While coalition talks were underway, US ambassador Scott Brown made extraordinary public statements criticising National Party leader Bill English for voicing misgivings about Trump’s threat to “totally destroy” North Korea. Brown made clear that Washington expected New Zealand to align more firmly with its moves against North Korea and China.

NZ First then announced it would form a government with the Labour Party and the Greens, despite the National Party having significantly more votes. Ardern rewarded NZ First with the positions of foreign affairs minister and defence minister. Her government significantly strengthened the alliance with the US and released a defence strategy in 2018 that labelled China and Russia the main “threats” to the international order.

NZ First leader Winston Peters, as foreign minister, urged the Trump administration to send more US military forces into the Pacific to push back against China’s economic and diplomatic influence. The Ardern government also boosted New Zealand’s military presence in the region to defend its interests as a minor imperialist power. According to Stuff political reporter Andrea Vance, the National Party was “shaken by Winston Peters’ decision” in 2017. “There was disappointment and some anger at those who failed to strike a deal” with NZ First.

Divisions over China fuelled factional warfare and leadership spills. Bill English was replaced as leader in February 2018 by Simon Bridges. Nine months later Bridges was attacked for allegedly failing to declare a political donation from a Chinese businessman.

Senior National MP Jami-Lee Ross, who revealed the donation, was expelled by the party. This year he became a co-leader of the far-right Advance NZ, declaring that “big political parties are bought and sold by Chinese foreign money.” Advance NZ was promoted internationally by Trump’s fascistic advisor Steve Bannon.

The attacks on Bridges from the media, the Labour Party and its allies continued in 2019, particularly following his visit to China aimed at boosting trade. Bridges and his deputy leader Paula Bennett were both rolled in a leadership spill in May 2020. Bridges’ replacement Todd Muller resigned after just 53 days, citing mental stress, and was replaced by current leader Judith Collins in July, just three months before the election.

With such instability, National was incapable of mounting a credible campaign. In addition to the leadership changes, 19 National MPs announced they were retiring at the election. Among them was Jian Yang, a Chinese-born MP who had been accused by Brady, NZ First and the Daily Blog, without any evidence, of being an agent of the Chinese Communist Party.

The bloodletting has not resolved the political establishment’s divisions over China. Asked by Newstalk ZB on October 4 whether she saw China as “friend or foe,” Collins replied equivocally: “Both.” While emphasising that she was “absolutely committed” to the US alliance, she added that China “is our biggest trading partner… it takes most of our agricultural products.” Collins’ husband is a former director of dairy company Oravida, which carried out significant trade with China.

The Ardern government, meanwhile, has signalled its ongoing commitment to the anti-China build-up. A press release two days after the election announced the redeployment of New Zealand air force planes to Japan to support sanctions against North Korea. This places New Zealand’s military on the front lines if war breaks out between the US and North Korea or China.

This was followed by extraordinary police raids, just days after the election, on the homes of two members of the New Zealand-DPRK Friendship Society, a charity that sent about $2000 to North Korea to purchase pandemic supplies such as face masks. The small organisation is absurdly accused of breaching United Nations sanctions against the country’s nuclear program.

These developments should be taken as a warning by the working class. Far from being progressive or a lesser evil to the National Party, the Labour Party-led government is a party of imperialism, which is actively preparing to take the country into a third catastrophic world war.