Dambisa Moyo: We Should Learn from China’s Multilateral Commodities Strategy
Moyo, author of the recently-released Winner Take All, examines the multilateral approach that China has taken and contrasts it with the unilateral strategies adopted by other nations. She advises on a multinational approach to the scarcity of resources and suggests that we need to introduce policies to conserve the resources we do have:
Over the last decade, around the world, China has been buying up mountains and mines, agricultural land, and oil fields at an extraordinary rate. In 2007, a Chinese company bought the mineral rights to two billion tons of copper in a Peruvian mountain for U.S. $3 billion. This was relatively small change; in 2008 the same company spent $14 billion on a stake in Australia’s aluminum industry. Since 2005, China has engaged in nearly 500 direct foreign investments and large contracts, valued at U.S. $505 billion–roughly one billion U.S. dollars per week.
These investments ensure China an upper hand in future struggles over resources. Finite and rapidly depleting supplies of land, water, minerals, and fossil fuels cannot match rising demand, driven by a growing world population, rapidly increasing global wealth, and urbanization. This fundamental supply-demand imbalance will lead to higher commodity prices and an increased risk of resource-driven conflict. In the aftermath of the 2008 financial crisis, commodity prices increased 150 percent. And since 1990, at least twenty-four civil wars and violent conflicts have had their origins in commodities. Many more conflicts are likely in the coming decades.