Resource Quest Research Articles

The paradoxical policies: Russia's rampant resource quest and the devastating toll on the planet

The Arctic's geopolitical significance and environmental vulnerabilities have sparked global attention. This paper critically analyzes Russia's evolving Arctic policy, which redefines the region as an extension of its domestic territory, emphasizing national interests. This policy shift prioritizes control over the Northern Sea Route, accentuates military fortification, and intertwines environmental rhetoric with resource exploitation. Russia's pursuit of Arctic development juxtaposes its commitment to environmental sustainability, fueling global concerns. Diplomatic rifts within the Arctic Council amplify tensions as Russia navigates a self-serving policy. Examining the Northern Sea Route's economic potential versus environmental impacts highlights the dilemma of increased shipping in ecologically sensitive zones. The militarization of the Arctic, showcased by Russia's bolstered defense measures, challenges regional security dynamics and amplifies diplomatic strains. Russia's policy inadvertently accelerates the collapse of the Arctic cryosphere, posing catastrophic threats from permafrost melting and potential viral pandemics. Furthermore, the paper delves into the environmental and public health repercussions of the conflict in Ukraine, detailing widespread pollution, infrastructural damage, and health crises. The collateral environmental damage from dam destruction exacerbates existing humanitarian concerns. This analysis underscores the intricate interplay between national interests, environmental sustainability, and global ramifications in shaping the Arctic's future.

Has China’s Investment Pattern in Sub-Saharan Africa Been Driven by Natural Resource Quest?

We assess China’s investment patterns in Sub-Saharan Africa (SSA) using total investment data separated into foreign direct investment (FDI) and infrastructure investment in four separate groups of countries covering the period from 2005 to 2017. Answering four questions based on arguments by scholars on China’s involvement in the region, we find that: (a) FDI constitutes only about 27 percent of China’s total financial flows into SSA; (b) only 30 percent of the total financial flows from China to SSA have gone into the natural resource sector; (c) mineral-related investments in mineral-resource-endowed countries constitute less than one-third of the total investment; and (d) less than one-third of China’s total investment in the region is allocated to natural resource extraction. These findings seem to refute arguments that Chinese investments in Africa are directed at natural resource extraction and that only countries endowed with natural resources attract Chinese investments.

By All Means Necessary: How China’s Resource Quest Is Changing the World, by Elizabeth C. Economy and Michael Levi. New York: Oxford University Press, 2014. i+279 pp. US$27.95 (cloth); also available as an eBook.

<i>By All Means Necessary: How China’s Resource Quest Is Changing the World</i>, by Elizabeth C. Economy and Michael Levi. New York: Oxford University Press, 2014. i+279 pp. US$27.95 (cloth); also available as an eBook.

Book review: By All Means Necessary: How China’s Resource Quest Is Changing the World, China’s Foreign Policy and The Chinese State, Oil and Energy Security

Book review: By All Means Necessary: How China’s Resource Quest Is Changing the World, China’s Foreign Policy and The Chinese State, Oil and Energy Security

By All Means Necessary: How China's Resource Quest Is Changing the World, by Elizabeth C. Economy and Michael Levi; Winner Take All: China’s Race for Resources and What It Means for the World, by Dambisa Moyo

Reviewed by: Stefan Fergus, independent scholarA notable characteristic of China's astonishing economic development over the past few decades has been considerable growth in resource acquisition. China's strategies for meeting its resource needs have piqued the interest of journalists and academics alike.By All Means Necessary by Elizabeth Economy and Michael Levi, and Winner Take All by Dambisa Moyo address the issues and concerns that have been raised with varying degrees of success. Both books provide clear summaries of China's global search for resources--be they energy, mineral, or agricultural. Economy and Levi work methodically through the key issues. Moyo also offers accessible explanations of historical context, commodity markets, and theory. However, lack of detailed case studies weakens both accounts.The books come at the issue from opposing perspectives. Moyo issues a clarion call to world largely ill prepared for the challenges of resource scarcity and the evolving dynamics around China's central role (2). Economy and Levi argue that the pressure on the rest of the world not so urgent. If China continues on its present course, there are two possibilities: either the Chinese economy continue to grow apace, driving energy and minerals demand upward; or China's economy will falter, gutting demand across the board and returning the market to more natural state of competition (34). Neither book addresses all the ramifications of the scenarios it paints. And indeed, the West needs to recognize its own impact on the environment and adjust its energy policies, just as China does.Western media outlets often make alarmist claims about China's resource strategy. Economy and Levi attempt to debunk such claims and to calm fears of China's seemingly unquenchable thirst for resources. While mostly successful, their desire for balance creates contradictions. For example, some Western observers frequently worry that China's voracious appetite dramatically affect commodity prices. Both books point out that civilian understanding of commodities trading remains, in Moyo's words, blurry at best (2). Moyo does the most to address this misunderstanding with clear and concise primer. Economy and Levi assert that China's real impact on commodities markets is different, more varied, and often more broadly beneficial (36) than negative caricatures suggest. Unfortunately, they don't provide enough evidence to support this claim, offering instead an inconclusive, somewhat muddled explanation. They take as an example of market that has remained stable despite heavy Chinese involvement, ignoring entirely the 2005 China-precipitated copper crisis that saw prices skyrocket after Chinese State Reserve Bureau trader took massive, unsustainable market positions.This oversight symptomatic of shared problem. By trying to cover all aspects of China's strategy, neither book offers as much detail as it should and each suffers from paucity of in-depth case studies. Economy and Levi, both members of the influential think tank Council on Foreign Relations, should have had no difficulty including more-detailed examples to support their thesis.Governmental control over China's corporations and economy an area in which the authors disagree, and highlights flaw in Moyo's thesis. Economy and Levi note that variety of factors, including financial policies and government assistance for investors, as well as the obvious overlap between financial and political ambitions, can appear very much like coordinated strategy (53). Appearances can be deceiving. There ample evidence that discipline not as tight as Moyo claims. While strong links do exist between the central government in Beijing and management of state-owned enterprises, the physical and practical distance between them--not to mention other intervening actors--can lead to divergence between policy and action. …

By All Means Necessary: How China’s Resource Quest is Changing the World

Based on analysis of the International Comparison Programme of the World Bank, the Financial Times posted on 30 April 2014 that China will surpass the United States – the leader in this category since 1872 – as the world’s largest economy in 2014 (based on purchasing power parityPPP). However, if PPP is not taken into account, it will still take some time until China surpasses the United States in (nominal) GDP, despite China’s high growth rates, compared with the more moderate growth of the United States (Jamil, 2014).

By all means necessary: how China's resource quest is changing the world

Preface Chapter One: Introduction Chapter Two: From Tribute to Treaty Port to Global Trade Chapter Three: China Emerges Chapter Four: China Goes Out Chapter Five: China Arrives Chapter Six: Growing Good Governance Chapter Seven: Beyond the Developing World Chapter Eight: Security and Politics in China's Backyard Chapter Nine: Security and Politics Abroad Chapter Ten: Resource Strategy in a Changing World

Shedding Light on the Study of Energy Security

Shedding Light on the Study of Energy Security Wojtek M. Wolfe (bio) Elizabeth C. Economy and Michael Levi’s By All Means Necessary: How China’s Resource Quest Is Changing the World New York: Oxford University Press, 2014 ISBN: 978-0-19-992178-2 (hardcover) Combining their expertise on the politics of China and energy policy, Elizabeth Economy and Michael Levi have produced an excellent book that gives China security and energy policy analysts an up-to-date perspective on the growing body of literature in these fields. By All Means Necessary: How China’s Resource Quest Is Changing the World is a genuinely rare book for two reasons: First, it provides outstanding depth while examining wide-ranging topics on China’s energy trade, mineral acquisition, cross-border water issues, and acquisition strategies. Second, the book is a welcome contribution to the field because its analysis of complex issues maintains a high level of objectivity on policy topics easily politicized. Economy and Levi’s high standard of research and analysis is evident throughout each of the book’s distinct focus areas examining China’s energy-seeking activities. China’s quest for resources has become difficult to ignore as it has increased in intensity over the past two decades, drawing greater international attention to the country’s questionable choices of energy trading partners and escalation of tensions in the South China Sea. In keeping with the objective and balanced nature of the book, Economy and Levi argue that while China’s actions are not entirely benign, many “pundits, scholars, and policy makers have too often blown China’s resource quest and its consequences out of proportion with reality” (p. 8). The authors find that China’s tactics do not differ greatly from previous attempts by other states to satisfy growing energy demand, though they do concede that Beijing’s strategy has and continues to create political challenges for its neighbors and the United States. The future of these strategies rests in Beijing’s guidance and in the institutions tasked with carrying out energy-seeking activities. Throughout By All Means Necessary, Economy and Levi ask how China’s natural resource quest is changing the world and if China itself is being changed as it seeks various forms of energy security. These are important questions, and the book examines each area of resource exploration with an in-depth understanding of the industries and politics involved in China’s resource-acquisition process. [End Page 174] The book places China’s resource quest in a historical context that helps observers better understand Beijing’s unwillingness to fully embrace international energy markets, commodity exchanges, and resource interdependence with the West. The authors’ historical narrative provides insights on China’s contemporary energy security strategy. China’s past international trade experience and the “unequal treaties” of the 1800s made the country inherently biased against global markets, which helps explain the recent leadership’s cautious attitude about increasing market dependence. By All Means Necessary makes note of the divide between Beijing’s early hopes for energy independence and the geoeconomic realities facing rising powers. Fortunately, China’s leadership has been coming to grips with those realities, evidenced by its steadily rising dependence on Western-backed international energy markets and sea lanes. Economy and Levi point out that China’s nationally owned energy companies have been increasing their knowledge of corporate social responsibility norms and practices, which may help them seek more profitable and less risky investments in the future. As the authors observe, such practices must begin at home, because they influence the quality of governance that China exports to resource-rich states. In her work on this issue, Erica Downs has also noted that China’s national oil companies have been slowly gaining the necessary international experience and attracting business talent with the skills needed to avoid the politically and economically risky investments that have led to significant financial losses while damaging these companies’ reputations among future trading partners. Energy trade typically consumes a small percentage of a country’s trade balance, and China is no exception to this rule. Despite this economic reality, energy and resource trading strikes a strong chord among pundits and politicians alike. Some...

Resources for Change

Resources for Change Elizabeth Wishnick (bio) Elizabeth C. Economy and Michael Levi’s By All Means Necessary: How China’s Resource Quest Is Changing the World New York: Oxford University Press, 2014 ISBN: 978-0-19-992178-2 (hardcover) Three decades ago, China was an oil exporter—sales of its fossil fuels accounted for nearly one-quarter of the country’s GDP and helped finance its economic reforms. After 30 years of rapid economic growth, China has now surpassed the United States as the world’s largest net oil importer. The country’s surging demand for energy, as well as for mineral resources and food products, has contributed to rising prices and raised fears about Chinese state-owned companies scouring the world for resources and locking up supplies. Is China’s global quest for resources a game changer? In By All Means Necessary: How China’s Resource Quest Is Changing the World, a wide-ranging analysis of Chinese resource-acquisition strategies, Elizabeth Economy and Michael Levi debunk alarmist myths about China’s growing footprint in global resource markets. They are uniquely placed to do so—Economy is an expert on China’s environment, resources, and foreign policy, while Levi is an authority on energy policy, climate, and technology. Unlike many recent books that focus on China’s demand for a particular resource, By All Means Necessary compares China’s global quests for oil, gas, minerals, food, and water. The authors argue that it is necessary to examine the particular dynamics in each resource sector to assess the impact of Chinese demand and corporate practices. In particular, Economy and Levi caution against attributing recent increases in resource prices to China’s pressure on markets. Oil producers, for example, have revenue targets. Once met, if prices are high enough, there is little incentive to increase supply regardless of demand pressures from China and other countries (p. 26). Moreover, contrary to the oft-heard trope about Chinese state oil companies locking up supplies, their production activities actually bring more oil to world markets. Some economists further note that the oil used in China’s production of goods for export—known as embodied oil—obviates the need by other countries for that oil in their own production process because they buy the finished [End Page 169] products from China. Chinese demand for oil, in effect, reflects global demand for goods produced in China.1 In the case of iron ore, developments in the Chinese steel industry unintentionally made the dynamics of the global iron trade more market-oriented. Economy and Levi recount how the emergence of small steelmaking companies in China undercut efforts by major Chinese firms to demand lower prices from the three main global producers of iron ore, Vale, Rio Tinto, and BHP Billiton, which control 70% of the trade (p. 37). As a result of changes in the Chinese industry, the iron trade shifted radically from an emphasis on long-term contracts to a system where spot markets play a much greater role (p. 39). According to Economy and Levi, it is in commercial relationships where China’s impact is increasingly felt, as Chinese companies invest more extensively in a wide variety of countries and sectors (p. 45). Chinese firms are relatively new players and have to work harder to make friends, drawing on networks of informal and personal relationships. This can cause deals to unravel when the leadership changes in target countries. Chinese companies may also overbid or overpromise to win a deal, only to see their projects collapse or turn out to be less profitable than anticipated (p. 73). The complex interconnections between Chinese political and economic elites present both opportunities and risks. Unlike in other countries, Chinese companies can depend on top political leaders to act as “diplomat deal makers” (p. 72). However, this means that political disputes have the potential to spill over into trade and investment, as was seen in 2010 when increased tensions between China and Japan disrupted the trade in rare earths between the two countries (p. 75). China claims to follow the principle of “noninterference” in the domestic affairs of other states, and its companies enter into deals with none of the preconditions...

Authors’ Response: The Continuing Evolution of China’s Resource Quest

We wrote By All Means Necessary: How China's Resource Quest Is Changing World to illuminate one of most discussed but least understood dimensions of China's rise, and we are grateful for four kind and thoughtful review essays. Indeed, months since book was published have only made importance of subject clearer. The China National Offshore Oil Corporation (CNOOC) has begun drilling for oil near Paracel Islands, sparking heated confrontation with Vietnam that United States and regional powers are struggling to respond to.1 The China National Petroleum Corporation (CNPC) has signed 30-year gas supply deal with Russian company Gazprom, reflecting mix of confidence on China's part in its ability to manage imports, desire to increase use of natural gas, and, critically, continuing motivation to diversify its sources of supply.2 Meanwhile, countries around world are shifting their policies partly in response to Chinese investment. Chinese investment in Myanmar, for example, continues to fall precipitously-in just three short years, China is estimated to have moved from first to tenth place in overall FDI in Myanmar-reinforcing importance of host-country politics in shaping opportunities for Chinese business.3 As analysts and policymakers struggle to understand and respond to these and other developments, we are heartened that reviewers see By All Means Necessary as valuable guide.Nonetheless, they have some concerns. Llewelyn Hughes writes that we do not convey sense of how effective [state control over Chinese firms] is and what implications are for China's external behavior. Elizabeth Wishnick similarly comments that the focus of By All Means Necessary is primarily on China's commercial relationships, and it would have been interesting for book to explore foreign policy implications of these relationships further. These issues are central thread running through chapters four through six, though many of our findings are dispersed. We summarize some of those findings here.By All Means Necessary does not provide single strong bottom line, but that is because there is none-the answers to these questions, as Wojtek Wolfe observes in his essay, vary with circumstances. We show, for example, that state control is weaker over private firms than over state-owned ones; that state influence varies depending on market structure; that government is only inconsistently able to direct even state-owned firms toward its political ends; and that these limitations are not unique to Chinese firms operating abroad, but rather reflect relationships between state and firms that play out at home too. To extent that Chinese government can harness individual firms toward its political ends, this is primarily by influencing them through general conditions, such as availability of financing for overseas projects or leadership incentives related to party promotion, rather than through specific directives. The most immediate consequence for Chinese external behavior is simple: China cannot use its firms to fulfill its foreign policy goals nearly as effectively as many assume. Indeed, as we show in By All Means Necessary, Chinese experience fits with what Hughes describes as more general one, with poor governance outcomes at home and often result. For example, we document China's repeated but failed efforts to raise standards of its extractives firms operating abroad, and note that firms operating abroad but outside Chinese state control can create foreign policy headaches for Beijing.Hughes also writes that a second important issue given insufficient attention relates to Chinese firms' entry into markets unrelated to fossil fuel-based In particular, he is concerned with our neglect of Chinese firms' activities in green technologies, which he claims are related to growing [Chinese] demand for natural resources. …

How China’s Resource Quest Is Changing China

China's economic emergence has been a defining event for global energy and commodity markets. Over the past decade, China has accounted for more than half of the growth in global energy demand and today consumes more than half of the iron ore, cement, copper, and a host of other commodities produced around the world. The stock of global direct investment by Chinese companies has grown from $53 billion in 2004 to $609 billion in 2013, a significant share of which is in natural resources.In By All Means Necessary: How China's Resource Quest Is Changing the World, Elizabeth Economy and Michael Levi help us make sense of Chinese natural resource trade and investment. While the title suggests the book might succumb to the alarmism and hyperbole that often dominates both public and academic discussions of China's rise, it is in fact an exceedingly nuanced, balanced, and well-researched assessment. The combination of Economy's deep China expertise and Levi's natural resource market and energy policy acumen provides an extremely valuable contribution.The book's chief strength is its combination of compelling storytelling and in-depth analysis-a commodity rarer than any resource Chinese companies search for around the globe. The authors put recent Chinese natural resource trade and investment trends in context, discussing precedents from Chinese history as well as from the economic emergence of the United States and Japan. They debunk the view, widely held in the West, that Chinese companies work in lockstep with the government, seeking to improve the security of the Chinese state at the expense of companies and countries elsewhere in the world. The book shows instead that Chinese companies are primarily commercially driven and that their motivations and interests often differ from the government's, just as is the case in Europe, Japan, and the United States.Economy and Levi rightly note that the most significant global impact of China's resource quest to date has been the country's rapid growth in energy and commodity consumption. This has put upward pressure on global prices and helped enrich resource-producing states. But what Chinese demand giveth, it can also taketh away. The growth of Chinese resource consumption has slowed dramatically over the past few years, leading to a sharp correction in the price of many commodities. Iron ore and copper prices fell by more than one-third between 2011 and 2013, and aluminum, steel, and coal prices have declined sharply as well. This development has been painful for resource exporters, from Australia to Chile and Brazil. And if the leadership is successful in rebalancing the Chinese economy from investment and industrial production toward services and domestic consumption, the resource-intensity of Chinese growth will likely continue to decline.Economy and Levi judiciously evaluate the positive and negative impacts of global resource investment by Chinese companies, both for recipient countries and competing firms. As the authors point out, Chinese resource investment has had less impact than Chinese imports of foreign-produced goods, despite attracting equal if not greater attention by foreign policymakers, scholars, and the press. Chinese companies are late to the resource game and often must pick through the scraps that U.S., Japanese, and European companies do not want to touch. Diplomatic support from Beijing and low-cost capital from state-owned banks help Chinese companies compete for investment opportunities in many developing countries. …

Don’t Panic! China and the Second Energy Revolution

Understanding the implications of China's rising demand for natural resources requires an appreciation of scale. If we focus on fossil fuels, Chinese oil consumption increased from 216,000 to over 10.7 million barrels per day in the almost five decades between 1965 and 2013, rising from less than 1% to more than 12% of aggregate global demand. Demand for natural gas, on the other hand, increased from 1.1 to almost 161 billion cubic meters. Most impressively, Chinese consumers' demand for coal grew from 114 to 1,925 million tonnes of oil equivalent (mtoe). By comparison, aggregate annual coal consumption in the next 50 countries-including the United States and India-stood at 1,802 mtoe.1The rise of the United States, Europe, Japan, and Russia to current levels of wealth was matched by a similarly extraordinary growth in the use of natural resources, an increase that economic downturns, wars, and revolutions did little to halt. History thus suggests that while the rate of increase in China's demand may slow, it will not stop. BP's business-as-usual case for future growth in energy demand reflects this, projecting that China's demand for all energy sources will be double that of the United States by 2035 and almost four times that of India.2 If the United States is a military superpower-investing more in military hardware than the next ten countries combined-then China is surely the emerging superconsumer in natural resource markets.Elizabeth Economy and Michael Levi's By All Means Necessary: How China's Resource Quest Is Changing the World thus does us a service by examining an important aspect of the ongoing transformation of the structure of global resource demand: the implications of China's rising consumption of natural resources for its external behavior. The book is structured around chapters describing the emergence of China as a large resource consumer and those analyzing the implications of this change for developing countries, developed countries, and the U.S. military and its allies.By All Means Necessary has many strengths. Most importantly, it avoids simple conclusions about the implications of the rise in Chinese consumer demand for energy products. The authors rightly note that the structure of markets governing supply and demand differs markedly across natural resources, with important implications for the external impact of growth in Chinese demand. While China imports the bulk of the oil consumed domestically, for example, the authors show that the oil supply chain is more resilient than it was in the prewar decades when U.S. and European firms and governments sparred for control over the right to manage reserves and production outside the United States. Economy and Levi convincingly argue that this difference makes the market better able to accommodate the emergence of new demand centers and the firms headquartered in them. In contrast, they note that natural gas markets are regionalized, which implies less flexibility, but they also suggest that China's influence on these markets is constrained by the limits of infrastructure and the continued dominance of coal.Economy and Levi are also careful to note the areas where problems remain. Chief among these is in maritime transport. They argue that while pipelines meet some of China's demand for oil and gas, shipping makes up the bulk of Chinese supply. U.S. military dominance of the sea and airspace-something that will not change in the near to medium term-means that there will be continued tension with the United States as Chinese officials look to enhance security along the supply chain.The authors also offer a nuanced account of Chinese firms' behavior. They note that the behavior of firms such as Sinopec and the China National Offshore Oil Corporation (CNOOC) often does not differ substantially from that of other international firms. Chinese firms seek to secure access to more lucrative acreage internationally and are willing to use the support of their home government to manage political risk and to help them compete. …