By Shayna Koczur
China has the world’ second largest economy[1]. Its swift rise to power has been considered one of the most impressive economic transformations of all time. However, China cannot escape the reality that in order to maintain its power, China needs an enormous amount of natural resources that they do not have enough of. China is not immune to the fact that natural resources are not only necessary for producing goods, but also for citizens to get to work and turn on the lights in their own home. Nations need natural resources to produce items to trade and to facilitate trade, production and life itself. This paper argues China became rich and therefore powerful because it knew How to do business, and incentivized nations to work with them which makes them vulnerable if they lose access to natural resources.
China needs natural resources to maintain global domination and therefore their plans are dependent on cooperation by Natural resource owning countries.
The rise of China can be credited to pragmatism over ideology. When Mao Zedong’s died, sweeping economic reforms allowed trade with other nations, particularly the West[2]. The Third Plenary session of the 11th Central Committee of the Chinese Communist party decided to enact a set of “ economic re adjustments “ in China. Though most of China’s industry was still State run, these State run businesses could engage in the free market and attracted Western Businesses because these businesses could provided westerners favorable , cheap deals that were illegal elsewhere[3]. Further, one of the goals of Dung Jao Ping’s Economic policy was to transform China from an unmodernized nation of struggling farmers (80% of Chinese citizens worked on the land) to a modernized commercial economy where Chinese citizens could make and purchase consumer goods. These reforms also took advantage of analyzing the economic needs of other nations and providing for them in innovative ways.
China also embraced urbanization- as China embraced more modern means of production as opposed to agriculure, farmers fled to the city for more productive work. This increased work force that the International Community benefited from caused China’s GPD to multiply 70 times in 40 years.
Because of these business arrangements, China’s largest exports and wealth comes from its ability to cut a deal and create business and facilitate mass global trade. In fact, the products that China exports arguably models a Target Recipt. China’s top exports are electrical machinery, equipment: US$710.1 billion (27.4% of total exports) ,machinery including computers: $440.3 billion (17%) furniture, bedding, lighting, signs, prefabricated buildings: $109.4 billion (4.2%) Plastics, plastic articles: $96.4 billion (3.7%) Optical, technical, medical apparatus: $80.2 billion (3.1%) Vehicles: $76.3 billion (2.9%) Miscellaneous textiles, worn clothing: $75.6 billion (2.9%) Toy s, games: $71.5 billion (2.8% ) Articles of iron or steel: $71.1 billion (2.7%)Clothing, accessories (not knit or crochet): $62.3 billion (2.4%)[4]. Clearly, other nations are capable of making clothes, cars, toys, and games.
China is merely Incentivizing other nations to do business with them. In theory, no other nation is estopped from making similar offers if their laws allow it.
China’s exports are good for business but not necessary for life and productivity. In other words, petroleum is used for heat and electricity. If a nation does not have heat or electricity- cars cannot run, transportation will shut down, factories that give people jobs will not be able to run, and tractors and agricultural equipment will shut down. Without natural resources, people will not be able to eat or work.
The damage a nation will face in an energy shortage is devastating which makes nations who control these resources extraordinary powerful. This is because nations cannot make natural resources.
To further this point, consider the possible food shortage that is predicted as a result of the Ukrainian war . Obtaining food for one’s citizens is not a choice but making goods at a discount price is. Ukraine is one of the world’s largest grain producers. Because of Russia invading Ukraine in February of 2022, Ukraine cannot grow grain and the grain they currently have cannot leave the country. They are just some of the 24,190 wagons carrying various goods for export, including vegetable oil, iron ore, metals, chemicals and coal, that were waiting to cross Ukraine’s Western border[5]. Because of the invasion of Ukraine, hundreds of millions of people around the world will not receive food unless Russia’s blockade of Ukrainian ports is lifted in the near future.
However, though not being able to get food is catastrophic on its own, grain shortages will also wreak havoc on a nation’s domestic economy. If grain becomes more expensive because there are fewer quantities of it, food will become more expensive. In these situations, countries could face inflation in terms of food which would make their domestic currency less powerful, or even worse, if people cannot spend money on food, money will not circulate through the economy as it should. The amount of dollars or yen a nation has will not be enough to maintain economically strong.
The Silk Road project
Since natural resources are so important, one needs to ask how China plans to survive. It could be speculated China’s new silk road is not delusions of grandeur, but reflected anxiety that China needs resources from other nations to survive. The New Silk Road on its face is an initiative by the Chinese governments that promises other countries that China will give them money and loans for infrastructure, and in exchange, obtain favorable trade agreements in return. Over 65 countries agreed to participate in this project and took small loans for infrastructure from China. China has spent over 1 trillion dollars trying to create a trade network between Central Asia, the Middle East and Africa[6] The planned infrastructure, including pipelines and roads as well as railway lines, that will improve China’s ability to transport crucial energy resources from suppliers in Central Asia and the Middle East[7]. China intends to expand its current global trade of the previously mentioned comedies, in exchange for natural resources. For example, China gets 46% of its natural gas from Turkmenistan, one of its partners in the new Silk Road[8]. , In 2020, Nigeria exported $2.54B in resources to China . The main products that Nigeria exported to China were Crude Petroleum ($1.19B), Petroleum Gas ($998M), and Raw Copper($36.8M). During the last 25 years the exports of Nigeria to China have increased at an annualized rate of 16.9%, from $51M in 1995 to $2.54B in 2020[9]. China lent nearly $125 billion to Africa between 2000 and 2006 and recently pledged $60 billion at the 2018 Forum on China-Africa Co-operation[10]. Since these loans are for infrastructure, it’s clear that China is planning to expand their wealth by trading their cheaply manufactured goods in exchange for a monopoly on natural resources. Looking more closely at deals made by China’s state-run oil company “CNPC holds proven reserves of 3.7 billion barrels (590,000,000 m3) of oil equivalent. In 2007, CNPC produced 54 billion cubic metres of natural gas.[CNPC has 30 international exploration and production projects with operations in Azerbaijan, Canada, Iran, Indonesia, Myanmar, Oman, Peru, Sudan, Niger, Thailand, Turkmenistan, and Venezuela. Many of the company’s exploration projects are carried out by the Great Wall Drilling Company (GWDC), a wholly owned drilling services company.” .
One can almost wonder if China’s new silk road is necessary for China to remain in power and China is not acting from a point of strength, but desperation. China is running out of resources: Water has become scarce, and the country is importing more energy and food than any other nation, having ravaged its own natural resources”. In order to provide jobs, modern amenities, and working fridges, cars, and workspaces for those citizens.
China should also look to its past. Mao Ze don’gs great leap forward caused allegedly almost 55 million deaths mainly because China overexerted its resources quickly by trying to produce more food then it could. As a result of overusing what China naturally has, the land became useless, Chinese citizens died of starvation and there was nothing to eat, let alone sell.[11]
China’s fall can ultimately be as fast as its rise, if China does not moderate their use of natural resources.
References:
[1] Contributor Prableen Bajpai. “The 5 Largest Economies in the World and Their Growth in 2020.” Nasdaq, https://www.nasdaq.com/articles/the-5-largest-economies-in-the-world-and-their-growth-in-2020-2020-01-22.
[2] Palumbo, Virginia Harrison & Daniele. “China Anniversary: How the Country Became the World’s ‘Economic Miracle’ .” BBC News, BBC, 30 Sept. 2019, https://www.bbc.com/news/business-49806247.
[3] Holton, Richard H. “Marketing and the Modernization of China.” California Management Review 27, no. 4 (July 1985): 33–45.
[4] Workman, Daniel. “Countries.” 2020, https://www.worldstopexports.com/chinas-top-10-exports/#:~:text=China%E2%80%99s%20Top%2010%20Exports%201%20Electrical%20machinery%2C%20equipment%3A,6%20Vehicles%3A%20%2476.3%20billion%20%282.9%25%29%20More%20items…%20.
[5] Person, and Pavel Polityuk Silvia Aloisi. “Thousands of Goods Railcars Stuck at Ukraine’s Border as War Hits Exports.” Reuters, Thomson Reuters, 7 Apr. 2022, https://www.reuters.com/world/europe/thousands-goods-railcars-stuck-ukraines-border-war-hits-exports-2022-04-07/.
[6] None. “Why Is China Interested in Nigeria?” Stears Business, Stears Business, 11 Oct. 2019, https://www.stearsng.com/article/why-is-china-interested-in-nigeria.
[7] “China’s New Silk Road.” The National Bureau of Asian Research (NBR), 6 Sept. 2018, https://www.nbr.org/publication/chinas-new-silk-road/.
[8] Chengevelyn. “China Is Ramping up Coal Imports from Russia – but Not Australia.” CNBC, CNBC, 29 Oct. 2021, https://www.cnbc.com/2021/10/28/china-is-ramping-up-coal-imports-from-russia-but-not-australia.html.
[9] “China (CHN) and Nigeria (NGA) Trade.” OEC, https://oec.world/en/profile/bilateral-country/chn/partner/nga.
[10] Akol Nyok Akol Dok, Bradley A. Thayer. “Why China Is Taking over Africa’s Resources One Country at a Time.” The National Interest, The Center for the National Interest, 31 July 2019, https://nationalinterest.org/blog/buzz/why-china-taking-over-africas-resources-one-country-time-70526.
[11] Bing, Microsoft, https://www.bing.com/videos/search?q=the%2Bgreat%2Bleap%2Bforward&qpvt=the%2Bgreat%2Bleap%2Bforward&FORM=VDRE. Accessed 13 Apr. 2022.
Shayna Koczur Esq. is an attorney from New Jersey. She graduated Brooklyn Law school in 2021. Prior to graduation, Shayna interned at the Brooklyn District Attorneys’ office, and Union County Prosecutor’s office. She has a strong interest in criminal law, international law, and constitutional law. During law school, she focused mainly on constitutional law and national security law. She has been published by the Fletcher Forum of World Affairs. Her article analyzed social media’s liability in radicalization and terrorism. Before Law School, Shayna graduated Bard College with her degree in Global Studies. At Bard, Shayna wrote her senior thesis on how French Laws failed to prevent radicalization within immigrant communities in France. Her thesis was selected to be presented at St. Petersburg State University in 2018.
