By Elizabeth Wang
Northwest Asian Weekly
In Dambisa Moyo’s New York Times best-selling book, “Winner Take All: China’s Race for Resources and What It Means for the World,” Moyo details the mass consumption of our planet’s raw materials and the competition between nations for the scarce commodities, including oil, minerals, and water.
On June 14, Moyo, an international economist, spoke at Seattle’s Swedish Cultural Center about China’s search for commodities in the global race to claim the world’s depleting natural resources.
The race brought China into Africa, a previously unsought area, where most of the world’s untilled arable land still exists. Moyo explains that China has begun its move into these unchartered soils and is attempting to gain control on these resources before others get their chance.
Nibitu Yilma, an attendee of the lecture, was born and raised in Ethiopia and has recently returned from a trip to her homeland, where she has seen changes in demographics and services.
“The roads are built by Chinese folks,” she observed. “We have Chinese restaurants now.”
Three key reasons, three-pronged approach
In her lecture, Moyo spells out three main growths that prompted China’s move into Africa: population, wealth, and urbanization.
“A lot of people are aware that the Chinese in particular have embarked in a large, very systematic program to organize more rapidly,” Moyo said.
With multiple cities with more than 1 million people in population, China feels the pressure of obtaining the commodities to fulfill the needs of an ever-growing nation.
A three-pronged approach plays into how China is engaging in the needs of their people. The first is befriending the ‘axis of the unloved’ — entering developing countries that others have ignored.
The second aspect to China’s campaign, according to Moyo, is the zero cost to capital.
“Because the Chinese government is so heavily involved in state capitalism, they have basically no price control,” said Moyo.
Meaning, because China’s need for certain commodities like copper are so strong, the government is willing to pay more to get what they need. Moyo said with more than $3 trillion saved in foreign reserves, they are able to compete with other nations to buy out resources.
“I have some cautionary remarks from South Korean ministers telling their own companies not to bother competing with Chinese,” Moyo said. “If they hear the Chinese are trying to get access to certain resources, they shouldn’t even bother.”
The third prong of China’s approach is being a monopsonist, which means that a party sets the price of a product from several sellers because it is sought by only one buyer.
“Where competition should be free and transparent, here we have a buyer that is so huge that they are able to influence the prices,” said Moyo.
Moyo explains that China’s dominance in African commodities poses a problem for the future of other countries.
“China is basically in every country, all over the world, as part of its campaign.”
A call to action
After hearing the lecture, Yilma concluded what is necessary to create change, especially in her own country.
“It’s good to know the impact, not just individually,” Yilma said. “The government movement will be key, so that they are actively working with the Chinese to protect their population.”
Moyo agrees. She said involved governments need to be more proactive in the issue.
“There are clearly challenges to China’s approach,” said Moyo. “But my conclusion is that there are significant benefits to be had to have the Chinese do what they are doing. However, a better outcome would be if the United States, [and] many other countries, were more engaged in a cohesive approach to the resource question.”
China does not operate like most Western countries, Moyo said. China’s grab for these raw materials aren’t to create a power move, but to be more self-sustaining.
Due to the lack of an overseeing court on natural resources, Moyo advises other governments to reexamine their Western standards in order to plan their next steps and keep in line with China.
She also sees this as an opportunity for African countries to reevaluate their own governments.
Moyo ends on a hopeful note. She said her books are meant to simply highlight unintended consequences of actions by policy makers. She is an optimist, she said. Rather than a cause for alarm, Moyo’s points are more directed at a call to action.
“Fortunately, every cloud has a silver lining,” Moyo said. “Financial crisis, I believe, has been a fantastic opportunity for African governments to become more accountable. … The logic that has been, the standard that the world has been operating [on], has been challenged. I think there’s a real opportunity for Africa to be held accountable. … Africa needs to stand up.” (end)
For more information, visit www.dambisamoyo.com.
“Winner Take All: China’s Race for Resources and What It Means for the World” can be found at www.amazon.com.
Elizabeth Wang can be reached at email@example.com.