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China, a black hole, sucking in the world’s natural resources
While the United States has occupied with “liquid renminbi vs a dollar linked Renminbi”, China’s policy has been to use a much broader strategy. China buys world’s resources, and has been a virtual “black-hole”, sucking in coal, oil, timber, steal, copper, minerals all forms from all over the globe.
Think of it, after almost 10 years, the pressure on China to let the yuan rise in value, instead of letting it fall, with the dollar, China finally let it appreciate 5 percent, making the overall increase to 1% since last June.United States has followed a decade long policy of allowing its currency to drop in value, hope that would fuel economic growth, but China after a more powerful concept.Invest, buy, or manage the “hard” resources in the world and finesse Designer on “United States currency questions.”
We, as a nation, ignoring Chinese raw materials import policies. I have been witness to the extent of the Chinese policy first hand in Nepal, Cambodia, Mongolia, Ecuador and even in the “autonomous regions” China, such as Tibet.
China buys resources throughout the world, and as we reported 18 months ago, has been a resource abuse, that in some ways, distort markets and facilitates corruption.
A few examples:
In Cambodia, it is against the law to “log” old hardwood forests, but if you are on the back roads near Sean Reap after dark traffic fills with “illegal” logging trucks delivers ill gotten wood for Phnom Penh, on the way to China.
In Mongolia, China has long made a concerted effort to gain control of the Mongolian oil, copper, and coal resources. much of the Mongolia coal is high-quality “coking coal” variety essential for steel production, which can be produced cheaply, as little as $ 15 per tonne. China is the world’s largest user of environmentally harmful “dirty” coal. But the nation is growing so quickly, it now produces more than half of the steel in the world, so it will continue to be the world’s biggest polluter.This is made worse because three-quarters of China’s electricity is powered by coal-fired stations.
In Kazakhstan, China is a major owner of the oil fields.
In Kyrgyzstan, China continues to show interest in natural resources, and officials are easily bribed or “affected”.
Both China and the Russian lust jealously for oil, wood, coal, and other resources in Central Asia.
In Turkmenistan, and Uzbekistan, China, with the cooperation with Russia, financed new pipelines along a route similar to the old Silk Road General.
Russia, is now a major source of oil for China, with the two Nations to jointly develop a new pipeline from Siberia to the Pacific region of China, of course.Chinese oil imports will hit 12,5 m barrels per day in 2020, up from 4 m last year. Russia, drifting away from the Western oil and gas markets in dismay in Western Europe.
China’s scope includes the Latin America and Nations which Ecuador, Venezuela, Bolivia, Mexico, Peru and Columbia find themselves “invaded” and flatter by Chinese visitors, businesses and buyers of natural resources; in some cases, China makes financing and grants available for economic development in trade for access to natural resources of these Nations.
But even with foreign exchange trading, China is the next maneuver. United States, China has just signed an agreement with Russia to do extensive trade in Rubles and Renminbi’s in their trade and ignores one time all the strong dollar. it is interesting that the Islamic Nations has worked to “remove the use of the dollar,” Nations such as Venezuela, Korea, Iran, have been trying the same tactics and now China and Russia are in the game.
As we have reported in Global Perspectives (http://www.bootheglobalperspectives.com) many times in the last 10 years, the investigation showed that China as a world power, that will change the way we all live. VIPs and leaders would be wise to monitor these tendencies. Access and control of natural resources continue to have global implications and history shows, wars and economic control.
Ben Boothe is an economic consultant and businessman, who has served the World Bank, the US State Department, USIS, USIA, as well as numerous Governments at the Bank, economic and legislative trends. His GLOBAL perspective has followed the VIPs around the world. CEO or the founder of several banks and corporations, serves as President of the BBAR Inc. Boothe, and do consulting in 21 Nations.
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