By All Means Necessary: How China’s Resource Quest is Changing the World

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Written by Paul Nash, Senior Editor

China’s meteoritic growth over the past thirty years, which has lifted over a hundred million Chinese from extreme poverty, has brought about colossal changes in the world’s most populous country. Modern industry has developed at breakneck speed, a new middle class has emerged, and the nation has witnessed the rise of more megacities than anywhere else.

China is now an aggressive competitor for the world’s natural resources—everything from oil to minerals, water, and food—and a growing concern for Western countries. Some feel that its pursuit of these dwindling resources, if allowed to continue unchecked, is unsustainable.

By All Means Necessary, released in February by Oxford University Press, explores China’s resource quest. How is the Middle Kingdom’s search for raw materials transforming the world? To what extent is it driving up global commodity prices? Is it the main force behind the China’s obstinate foreign policy and the hurried buildup of its naval power? These are the questions that Elizabeth Economy and Michael Levi, researchers at the Council on Foreign Relations, set out to answer.

Economy and Levi take a selective but wide-ranging look at China’s trade and investment in countries such as Canada, Kenya, Mozambique, Zambia, Kuwait, Qatar, the United Arab Emirates, and Brazil.

What they find is an emphatic departure from alarmist media reports that accentuate the harmful long-term consequences of China’s turn outward in search of resources—consequences for the environment, labor, and the rule of law.

To make their point, Economy and Levi draw a parallel with Japan in the 1950s through the 1970s. After Japan emerged from World War II, it became dependent on resource-intensive investment to fuel economic growth. The West—the United States in particular—became alarmed that Japan was quickly depleting global reserves and using unscrupulous methods to secure them.

“Just as rising Chinese commodities consumption in the 2000s coincided with growing popular fears that the world was running out of natural resources,” Economy and Levi write, “so too did growing Japanese demand collide with worries about ‘limits to growth’ rooted in resource scarcity.”

In the end, however, American concerns about Japan proved to be misplaced. The Japanese economy never became the dominant force that some people predicted. In fact, Japan soon stagnated while the rest of the world grew, and its demand for resources dropped off to sustainable levels. More importantly, the United States was able to retain control of what it needed, including critical oil supplies in the Middle East.

Today, China seems to be following in the same footsteps. Like Japan, its growing reliance on imported materials has made it impossible for the nation to return to the self-imposed isolationism it experimented with in the 1950s and 1960s. China’s deepening engagement with the wider world today is, if properly managed, as good for China as it is for the West.

When China’s state-owned companies, backed by cheap government loans, began “going out” in the 1990s to lock up reserves in small resource-endowed countries, they embarked on a process of creating their own mercantilist system for trade.

Many worry that China is prepared to exploit the resources of vulnerable countries by all means necessary. “When the Chinese companies arrive,” Economy and Levi write, “they variously enrich despots, despoil the environment, exploit labor, and intensify corruption.”

China, of course, is doing nothing that other major powers before it have not done. Economy and Levi draw several historical examples, from ancient Athens, which obtained timber in Macedonia and corn in Egypt, to Spanish and English colonialism in the New World. They also mention European powers in Africa and the Middle East in the first half of the twentieth century.

The study could have been enriched, perhaps, had Economy and Levi delved a little deeper into these subjects. After all, the magnitude of China’s recent resurgence seems to warrant broader historical treatment. The context of a few decades seems too narrow to fully appreciate the implications of China’s return to its former economic strength, which centuries ago attracted generations of merchant-adventurers, from Marco Polo and Christopher Columbus on down to the British East India Company.

What would emerge, for example, from a comparison between China today and the East India Company in the seventeenth and eighteenth centuries as it established its own global mercantile-colonial system with the help of the British navy? And how much of China’s resource demand today is actually global demand as China, the “factory of the world,” uses these resources to produce exports?

By All Means Necessary is nonetheless a fascinating look at the multiple dimensions of China’s resource quest and the repercussions it has for America’s economic, security and diplomatic presence in the world. Economy and Levi believe it is critical to understand and appropriately respond to China’s global resource enterprise. “The rest of the world cannot determine the outcome of China’s resource quest,” they conclude. “It can, however, help ensure that China’s impact is as broadly benign—or even beneficial—as possible.”

Photo: Aldas Kirvaitis (cc).