Why China Matters #6
Because China’s demand for resources is altering global markets in ways both profound and perverse.
China’s explosive economic growth forces it to suck in resources from all over the world. As James Kynge, a longtime China-watcher, notes in his recent book China Shakes the World, “China’s endowments are deeply lopsided.” Blessed with too many people, China is short on just about everything else: arable land, water, energy, and raw materials of all sorts. Thus, the only way China manages to serve as globalization’s “manufacturing floor” is to become a leading global importer of virtually any commodity you can name, from cement and copper to oil and gas.
While there’s hardly anything wrong about that, China’s insatiable demand for resources likewise drives Beijing to actively court pariah states and “rogue regimes” while the West tries to isolate the same regimes with economic sanctions. Take China’s relationship with Iran: While American diplomats work night and day to level even harsher sanctions to slow down Tehran’s reach for the bomb, China quietly edges out Japan as Iran’s major energy investor, sweetening the deal by reselling it some of that fabulous high-tech military hardware the Chinese military imports from Israel—hardware which then turns up in southern Lebanon in the hands of Hezbollah.
On the face of it, that constitutes obstructionism on China’s part, as if it’s trying to prevent the global community from cracking down on bad behavior. But the inescapable truth is that China’s scramble to find resources means it has to cut deals with anybody, no matter their disreputable record. So while Sudan’s government engages in what many Western states consider to be “ethnic cleansing” or genocide in its Darfur region, China is more than happy to invest heavily in Sudan’s oil industry while supplying the Sudanese government with weapons. Do that long enough and you’ll have Hollywood stars galore decrying your hoped-for coming-out party as the “genocide Olympics.”
But the longer-term danger is this: China is getting awfully dependent on a lot of unstable countries without having the global military footprint of a great power—you know, like somebody building a very large house made of straw, nowhere near a fire station. When bad things happen—like, say, that one afternoon nine Chinese oil-rig workers were killed by rebels in eastern Ethiopia—China can’t respond like a military power you should fear, because it needs that oil. Once that reality sinks in with local bad actors, expect them to start squeezing Beijing for their own slice of protection money. You know that Thomas Friedman bit about America funding both sides of the “war on terror”? Well, this is how that sort of thing starts.
Today, China might get by simply by buying off every dictator it can. But that won’t work in a future world defined by hyperconnectivity, where everyone can witness the human implications of China’s deal-making. Nor will it work in a future world defined by hyperinterdependency, a world China is creating—whether it realizes it or not.
Why China Matters
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