What if China was beating the US at its own super-power game in the Pacific and we didn’t even notice?

While Washington distracts itself with shutdown shenanigans and failed attempts to control the situation in the Middle East, president Obama’s “pivot to Asia” looks increasingly shaky. Beijing is quietly filling the gap, signing multi-billion dollar trade deals with Indonesia and calling for a regional infrastructure bank.

Meanwhile in recent years, New Zealand has been feeling some of the US's attention, and conservative prime minister John Key is more than happy to shift his country’s traditional skepticism towards Washington into a much friendlier embrace. Canberra is watching approvingly. It’s almost impossible to recall a critical comment by leaders of either country towards global US surveillance. We are like obedient school children, scared that the bully won’t like us if we dare push back and argue harder for our own national interests.

The Trans-Pacific Partnership Agreement (TPPA), warmly backed by Australian prime minister Tony Abbott and New Zealand, is just the latest example of US client states allowing US multinationals far too much influence in their markets in a futile attempt to challenge ever-increasing Chinese business ties in Asia. German-born, New Zealand resident and internet entrepreneur Kim Dotcom tweeted this week:

Kim Dotcom (@KimDotcom) #TPPA in a nutshell US Corp lobbyists drafted TPPA US Corp & Govt expand power US Corp lawyers can sue NZ NZ can't win. GET OUT

This erosion of sovereignty goes to the heart with what’s wrong with today’s secretive and unaccountable arrangements between nations desperate to remain under the US's security blanket, and New Zealand provides an intriguing case-study in how not to behave, including using US spy services to monitor the phone calls of Kiwi journalist Jon Stephenson and his colleagues while reporting the war in Afghanistan.

There’s no indication that Australia isn’t following exactly the same path, with new evidence that Australia knew about the US spying network Prism long before it was made public. We still don’t know the exact extent of intelligence sharing between Australia and the US, except it’s very close and guaranteed to continue. Frustratingly, the "Five Eyes" relationship between English-speaking democracies has only been seriously discussed publicly in the last years by Greens senator Scott Ludlam.

New Zealand is a close Australian neighbour, but news from there rarely enters our media. This is a shame because we can learn a lot from the scandal surrounding the illegal monitoring of Dotcom and the public outcry which followed, something missing in Australia after countless post-Snowden stories detailing corporate and government spying on all citizens.

Dotcom is the founder of Megaupload (today called Mega), a file sharing website that incurred the wrath of US authorities. Washington wanted to punish him but Dotcom obtained New Zealand residency in late 2010, bringing a close US ally into the mix. Intelligence matters usually remain top-secret, leading New Zealand journalist Nicky Hager tells me, but this case was different, blowing open the illegal spying on Dotcom. His lawyers scrutinised all the police warrants after the FBI-requested raid on his house. The government communications security bureau (GCSB) has always claimed it never monitored New Zealand citizens; Dotcom soon discovered this was false. Public outrage followed, and an investigation revealed many other cases of GCSB over-reach since 2003. Prime minister Key responded by simply changing legislation to allow spying on residents.

Hager explained to me what his investigations uncovered:

With Dotcom, GCSB helped the police by monitoring Dotcom's e-mail. What this largely or entirely meant in practice was that the GCSB sent a request through to the NSA to do the monitoring for them and received the results back. This means that the NSA used either wide internet surveillance (essentially "Echelon for the Internet") or else requests to the internet companies (Gmail etc) directly, ie the Prism type operations. It's not clear which it was.

The Key government now wants to increase its monitoring capabilities even more, and New Zealanders are showing concern.

I spoke at a public meeting in Auckland's town hall before the GCSB bill was passed. It was the biggest political meeting I can remember attending, with three levels of the large town hall completely full, and hundreds of people turned away. It's been a big thing here, becoming one of those issues that is a lightning rod for general unhappiness with the government.

New Zealand journalist Martyn Bradbury has also been a vocal critic of the Dotcom case. He’s pushing for a New Zealand digital bill of rights and tells me that “the case against Dotcom is more about the US stamping their supremacy onto the Pacific by expressing US jurisdiction extends not just into New Zealand domestically, but also into cyberspace itself.”

I talked to one of Dotcom’s lawyers, Ira P Rothken, who went further:

The US government’s attack against Megaupload bears all the hallmarks of a political prosecution in favour of Hollywood copyright extremists. The US used its influence with New Zealand to unleash a military style raid on Dotcom's family, to spy on him, and to remove his data from New Zealand without authorisation – all of which has been found to be illegal. Megaupload and Kim Dotcom are today’s targets, but the US crosshairs can just as easily be trained on anybody globally who dares challenge or inconvenience a special interest that holds sway in Washington, and the US – with its notoriously insatiable appetite for demonstrating political and global power – seems all too willing to cooperate.

This brings us back to China and the US’s attempts to convince its Pacific friends to fear a belligerent and spying Beijing. The irony isn’t lost on the informed who realise Washington’s global spying network is far more pernicious and widespread than anything the Obama administration and corporate media tell us is coming from the Chinese.

Neither China nor the US are benign in the spying stakes. Both are guilty of aggressively pursuing their interests without informing their citizens of their rights and actions. Australia and New Zealand are weak players in an increasingly hostile battle between two super-powers, and many other nations in our region are being seduced by the soft power of Beijing (including Papua New Guinea, partly due to its vast resource wealth).

A lack of transparency abounds. What is desperately needed is an adversarial press determined to demand answers about Australia’s intelligence relationship with the US – and whether all citizens should now presume they’re being monitored on a daily basis.