Much has been made about China’s huge investments in resource-rich Africa in recent years and Chinese President Hu Jintao pledged another $20 billion in loans during his visit last week.
But it’s not just Africa where China is looking to secure access to commodities, notes international economist Dambisa Moyo. “There’s not a single region left untouched,” she says in the accompanying video, noting China’s extensive trade with Brazil, its recent “laptops for pork” deal with Canada, pacts with Kazakhstan and Russia for uranium and oil, as well as land-development in Australia. And on Monday, Canada’s major oil producer Nexen announced it has agreed to be acquired by China’s CNOOC in a $15.1 billion deal, giving the Chinese oil company a strong position in the North American oil market.
“Simply put, the Chinese are on a global shopping spree,” Moyo writes. “And its voracious commodity appetite is unlikely to abate significantly even if China’s economic growth rates were to cool.”
China’s growth rate did cool in the second quarter to 7.6%, its slowest in three years. The CRB Index is down about 18% from its recent peak as the global slowdown has hit demand — with the notable exceptions of agricultural commodities such as corn and soybeans.
But Moyo is looking beyond short-term fluctuations in her latest book, Winner Takes All: China’s Race for Resources and What It Means.
Broadly speaking, commodity scarcity and rising competition for commodities is “by far the biggest issues the world faces in the coming decade,” according to Moyo. “Looking ahead, the forecast is for many more conflicts and much more significant pressure on commodity prices, all borne out of commodity scarcity.”
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