China’s Other Hobby
Original post made by Tom Cushing on Feb 21, 2013
A much more insidious, if plain-sight threat to western interests is examined in African economist Dambisa Moyo's thorough, insightful book: "Winner Take All." In it, she describes the upstream end of China's insatiable manufacturing economy. For at least the past decade, China has made a concerted push to develop and acquire long-term access so-called commodity resources all over the world.
Moyo's focus is on the Third World, where, ironically, the Communist country's approach has been to partner with local governments to assist with rich resource development, and then corner the market for the resulting output. China has surpassed the US as Africa's largest trading partner, and its investment in the continent has sky-rocketed. The Chinese way, unfettered by the notion of the "White Man's Burden," contrasts with the traditional Aid Approach of The West, and has so far been locally very well-received. Therein lies the concern.
Doomsayers have a rich history, from Greek mythology's Cassandra and the Bible's Jeremiah, through the early economist Malthus. The latter is particularly relevant here, for he famously predicted that resources increase arithmetically, while human population tends to explode exponentially (or something like it), leading inevitably to shortages, famine and strife. So far, the world at-large has staved-off the Malthusian apocalypse, but sooner or later … It's like somebody telling you you're going to die they're bound to be right, it's just a question of when.
Dr. Moyo's point is that it will not take a global catastrophe for China's strategy to bear economic and other influential fruit. She is at pains to describe the present approach as strictly economic, as opposed to the neo-colonialism charges that have been leveled against it, by Secretary of State Clinton and others. But she also discusses the direct export of large numbers of Chinese workers and the strong cultural ties being forged between them and the local citizenries. Further, the infrastructure and other development that has accompanied these projects, and the revenues from commodities sales have boosted the fortunes of the receiving societies and their political entities.
Interestingly, Moyo notes that the Chinese push has corresponded to a substantial drop-off in foreign-aid from the West since the financial crisis of 2008. As she asserts elsewhere, most democratic governments levy taxes on their populations and rely on local votes to stay in power, whereas leaders in aid-based countries can be/have been propped-up by foreigners. She sees local development, then, very positively, as the new basis for various African governments' accountability to their peoples. In any event, alliances of mutual advantage are being forged with China. Remember that early scene in The Godfather where Don Corleone says he may never call-in his favor?
To be sure, western companies have long been participants in extraction industries in Africa, Latin America and Asia. Those histories are sometimes sordid, but the better, more recent examples have involved many important elements of the Chinese model -- like infrastructure, local education and advancement of nationals into management positions. The difference here seems to be in the central organization, scale and unified purpose of the Chinese effort. It's not clear that western nations, individually or in concert, have approached these issues so strategically, or with such a long focus.
In the short run, commodities prices for minerals, energy, foodstuffs, etc. are notoriously fickle. In the longer term, however, market forces are very likely to vindicate some of Moyo's predictions. This low-tech phenomenon may ultimately have a greater international economic and diplomatic impact than cyber-hacking, and our middle-school army is no match for it.
As a concluding point, I think it's important that Dr. Moyo's is an African "voice." Albeit she consults with the best investment banks and has degrees from Oxford and Harvard, her frame of reference is distinct from that of a native daughter or son. She didn't grow up thinking of Chinese or Soviets necessarily as the bad guys; Anglos and Americans haven't always worn white hats in her part of the world, either. In our geographic isolation, we risk a lot if we discount the legitimacy and power of such a voice. She's not necessarily correct, but hers is an exceptionally well-informed opinion, and well worth a thoughtful read.
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Several commenters have noted on several occasions that these blogs are too long, too convoluted and use dollar words when dimes'll do. So as a service to Myers-Briggs Judgers (I'm a Perceiver, in case that's unclear), others for whom context and nuance are mere annoyances, and everybody else who writes better than I do, I offer the Reader's Digest condensed version:
China buys lots of raw materials. They are making many friends, by partnering with resource-rich countries, all over the world. The African economist-author and a dead European doomsayer think this is bad news for everybody else. They may be right.
on Feb 21, 2013 at 9:46 pm
even that was too long.
on Feb 22, 2013 at 6:22 am
Darn it! Well Don, maybe ask for a refund?
on Feb 23, 2013 at 10:47 am
This was interesting always TC. Thank you. I wonder too how this will line up in the future with the trend in Chin now to duplicate (faster and bigger natch) our trend to graduate masses of college graduates unable to find "good" jobs and feeling manufacturing jobs are beneath them. Less Chinese workers would , it seems, be available for "export" and manufacturing outside of China could become more reliant on local labor. I wonder what that will look like in the end...