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28 May 2015

By All Means Necessary: the Chinese Struggle for Natural Resources

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Geopolitics and the global economy are directly affected by the transformation of the Asian giant: China. What is changing in China, and what does this change mean for the rest of the world? This twofold question is the central theme of the book published by Elisabeth C. Economy and Michael Levi “By All Means Necessary: How China’s Resource Quest is Changing the World”

Levi (Director of the energy security and climate change program) and Economy (Director of Asian Studies) from the Council on Foreign Relations have analyzed the meteoric economic rise of China and the consequences that this metamorphosis is already having on the rest of the world.

Fuel, minerals, water and land for agriculture are key resources for the growth and expansion of the country, and China is looking for them beyond its borders. Its military strategy and foreign policy are paving the way towards these resources. Thus, the Chinese army secures maritime routes and its diplomats champion the country’s interests abroad.

According to the United Nations Department of Economic and Social Affairs, the world population is expected to grow over 2 billion by 2050. China, which in 30 years has gone from being an impoverished country with a peasant majority to an economic power with an extraordinary and expanding middle class, will play a decisive role in the struggle for natural resources. This book by Levi and Economy sets out to analyze all the forces involved in this process and to “demythify” the Chinese expansion. Their clear-sighted approach is far from fatalistic and does not lose sight of the more provocative geopolitical aspects of the Chinese quest for resources.

China: out to conquer the world

Since Deng Xiaoping spearheaded China’s early efforts at opening up, the country’s economy has gradually unfolded to the rest of the world: First, by allowing foreign investment in the so-called special economic zones and later –this time during the government of Jiang Zemin (1993-2003)– by stimulating Chinese investment beyond its borders. But how are Chinese companies behaving away from home? And how are they received by the local economies in other countries?

Government support is the compass that guides the Chinese conquest of resources. However, the tools deployed by Chinese companies when investing abroad also characterize the process in a unique way. In Gabon, where China is investing in copper and oil, it is also building schools and clinics for the local population. In Latin America, it facilitates the export of timber thanks to the construction of infrastructures. Moreover, each resource involves a different maneuver: oil is very widely distributed geographically, and Chinese companies are looking for projects that allow them to acquire technological skills. China directly influences the water resources that flow through its territory, such as the great rivers that continue on towards India, Cambodia and Burma.

The top Chinese entrepreneurs are capable of coordinating a range of instruments on the negotiating table to improve the appearance of agreements. However, in the long term, most of the projects are unsustainable: 67% of Chinese acquisitions have ended in bankruptcy according to the book’s authors. At the same time, the opaque and personalized nature of the negotiations raises questions about corruption and the conditions of workers, although the Chinese government has already taken some steps that reveal its concern for the relationship between economic development and social well-being. The banking system and the citizens themselves are applying pressure in the same direction.

China is transforming itself and simultaneously transforming the world, although in this meteoric rise there are still sweeping contradictions that must be resolved both inside and outside its borders. It abstains in the UN Security Council, while the PLAN (Chinese People’s Liberation Army Navy) and its diplomats fight to protect the country’s interests abroad. Furthermore, the question of natural resources is inevitably link to the management of the environment. The question that must be asked is how China can tackle the challenge of energy and pollution.

Dory Gascueña for OpenMind


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