Dambisa Moyo sounds the alarm about China’s claims to the world’s natural resources. As its population advances economically, the Chinese government has kept pace, and then some, in securing natural resources that can be used in its domestic industries. These moves have consequences for the rest of us, she argues, in part because international conflicts over resources commonly turn violent. Increasingly, China wields market power and sets global commodity prices. Although Moyo does not profess to have all the answers, she believes the question is well worth asking: How should the rest of the world respond? One solution she recommends is to redirect spending from national defense to research and development - although even this may only be one piece of a much larger strategy.
Justin Logan is considerably more skeptical that China constitutes a grave threat in a resource-hungry world. He looks at several Chinese economic projects and finds their results haven’t been as successful as anticipated. Political and military tensions may well exist between China and the United States, but, he writes, they do not appear to be driven by economics. Commodity shortages have not been as damaging as feared, and China’s response to them has been less fearsome as well.
Ian Bremmer agrees that China’s international economic policies are driven by the need to soften domestic opposition. He laments that there is no single international institution that regulates investment competition and scarce global resources. But China’s actions have to be understood both as attempts to secure commodities and as attempts to find new markets for its industrial products. Like the United States and others before it, China may find itself increasingly committed to managing world conflicts in the process. Finally, the most important vulnerability that China poses to the rest of the world is not that it will continue to rise, but that it may fall: Should the people turn on the country’s leadership, China’s future would be highly unstable.
China would do well to abandon its attempts to manage world resources: they aren’t paying off, says Ronald Bailey. He invokes data from the study of economic supercycles, during which the world economy deploys new technologies in response to new and changing resource demands. This data suggests that the world economy has now priced in China’s rise as a manufacturing power - and even managed to supply more or less the mineral resources it will need. Commodity prices were high at the peak of the cycle, but they have since fallen, and there is no reason to think that things will change very soon.
Related at Cato
Free Trade Bulletin: ”Chinese Free Trade Is No Threat to American Free Trade,” Simon Lester, April 22, 2015
Policy Analysis: ”China, America, and the Pivot to Asia,” Justin Logan, January 8, 2013