You don’t have to go very far perusing the financial and business pages without encountering word of yet one more Chinese bid for an equity stake in some country’s natural resource sector – whether in Africa, Latin America, Canada or elsewhere. Frequently, these deals are couched in language reminiscent of wartime (hot or cold) resource anxieties. In the latest issue of Resources, Senior Fellow Joel Darmstadter sets China’s global hunt in context, explaining that, as far as one can tell, things seem less devious than the mainstream press implies.
That said, many countries, particularly in Africa, are clamoring for China to invest but questions do arise about whether these investments and transactions play out under competitively transparent ground rules. Perhaps in Canada, says Darmstadter, but in Sudan, China’s abstention from UN Security Council deliberations on Sudan’s human rights record raises doubts.
Another contentious factor is the effect of China’s capital investments versus purchases made on the world oil-market. Gaining preferential access to major oil fields may appear to give China advantages in the face of volatile world oil markets but the extent to which this provides benefits not realizable by world-market purchases isn’t clear. Overshadowing this debate is the fact of China’s growing demand for oil. But the same, Darmstadter observes, can be said for India and other rapidly developing countries and that could signal perhaps inescapable price increases for energy and related environmental stress, irrespective of acquiring footholds in oil-producing properties around the world.
What’s really called for are “smart, anticipatory policies”– in R&D, conservation, alternative resource development, and technology – that could blunt such outcomes.
Read the entire article using our interactive flash reader
Also available for download
