Share

China's race for resources 'deliberate'

Cape Town - “China’s campaign and race for resources globally is systematic and deliberate. Not since the era of colonialism have we seen a campaign on such a scale,” said Dambisa Moyo in a keynote address at the Investing in African Mining Indaba.

Speaking on the theme Winner Takes All: China’s Race for Resources and What It Means for the World, Moyo challenged those who claim China’s investment in Africa is a new form of colonialism to invest in the opportunities that abound in Africa today.

“If you’re concerned about Africa being recolonised by China, then put your money where your mouth is.”

Moyo, named by Time Magazine as one of the “100 most influential people in the world” in 2009 and a best-selling author, said concerns from the West about neo-colonialism and environmental degradation are exaggerated or just plain wrong.

She did, however, add a note of caution to be “vigilant and ensure that they gain something from their engagement with the Chinese”, saying that African governments must articulate their policies clearly.

She pointed out double standards, saying that China is the biggest foreign lender to the United States today, yet “no one complains about human rights violations, but when it comes to Africa there are claims of re-colonisation”.

Moyo described China’s approach to investing in Africa as a symbiotic relationship, with China offering host nations what they need.

She pointed to the vast financial resources at China’s disposal, saying that China’s “deep pockets mean that they can go where others like the US and Europe cannot go.

“People question China’s ability to value an asset; they should ask why they are willing to pay a premium for an asset. The answer lies in the utility model.” 

She said China is simply interested in ensuring that they secure the natural resources, so they will pay what they must.

“As competitors fall away, China will have less competition and will end up paying less for resources.”

She contends that China has become a monopolist in some areas of the commodities market, including copper and coal.

Moyo remarks that the world is nowhere near the end of the commodities super cycle. She expects significant price increases for the foreseeable future, as well as volatility in commodity markets.

This will be driven by factors like population growth, a growing middle class in emerging markets and urbanisation policies in developing countries.

She did however point to some supply-side constraints, citing land, water shortages and energy. She added it is becoming harder to access minerals due to difficult terrain and political tensions: “There has been an increase in conflicts around the world due to resource constraints.

"Since 1995, there have been 25 commodity-based conflicts around the world.” She said future conflicts would revolve largely around water resources, but that minerals and energy would also generate their fair share of conflict around the world.

Moyo also spoke of an increase in natural resource nationalisation, citing the examples of Mongolia, the Dominican Republic, Argentina and Australia. She said: “Governments are taking on more responsibility for mineral resources.”

She cautioned governments embarking on this path to be careful, citing difficulties that may arise such as raising capital due to uncertainties created by government policy changes, particularly in mining, which is a long-term investment sector.

- Fin24



 
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.9%
Rand - Pound
24.10
-0.9%
Rand - Euro
20.59
-0.7%
Rand - Aus dollar
12.42
-0.9%
Rand - Yen
0.13
-0.8%
Platinum
915.75
-0.8%
Palladium
1,028.36
-3.5%
Gold
2,159.96
+0.2%
Silver
25.03
-0.6%
Brent Crude
85.34
-0.1%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders