The Current Discussion: China's on a resource-buying spree, most recently paying US$13 billion for a stake in an Australian mining company. Is this a threat to your nation and its economy? To the world's?
Acquiring resources for economic wealth has been the hallmark of modern civilization. Whether in the context of colonial expansion, imperialist conquest or modern wars, economic gain has been one of the motivating factors for each of these actions. In the world of commerce, it’s considered perfectly normal to secure resources via acquisitions and mining rights, subject to a certain acceptable decorum on such acquisitions and conduct of mining. China's case is all the more touchy as it is not a democracy and its standing on human rights is dismal; yet the exigencies of commerce force countries that would in other cases talk of human rights and sanctions to ignore China's conduct.
China remains a resource-hungry country and it will be buying many more resources, especially oil and other vital commodities. Thankfully, it will be using money as a means of acquisition rather than tanks and guns. Thus, acquiring these resources is perhaps not a terrible act, nor indeed a threatening one. It’s even less threatening as part of an economic rather than a political strategy. Both India and China will soon become the two most resource-hungry countries in the world, and in the decades ahead will consolidate themselves as the most demanding consumer markets. This will mean both India and China will acquire more resources through financial means, and in some cases perhaps adjust their foreign policies to meet those ends. A case in point is both China and India's reaction to the Burmese military crackdown on the Buddhist monks. Both countries were at best muted in their criticism of the military junta given their economic ties to the Burmese government. In a sense, this political acceptance of gross violations of human rights reflects the U.S. tolerance of China's own behavior with respect to human rights and the issue of Tibet.
In short, our society’s reaction to economic resource acquisition is really dependent on our political outlooks, which should be consistent, or at least fair, in their assessment. Sadly this has not always been the case, and human history is full of the hypocrisy of our assessments. If an Arab country acquires the company that manages U.S. ports, it is considered a threat. But if China acquires mining assets, perhaps that’s more acceptable – indeed, if a U.S. company acquires assets in Europe or elsewhere, it’s called progress. In so far as this Chinese acquisition is concerned, it would seem an economic motive and perhaps as benign as buying a U.K. port management company, but then the perception of threat remains quite subdued.
In terms of the future, we have to get used to the effects of this globalization where more resource assets will be targeted for acquisition, and we will have to fair and consistent in our approach.
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