[Mb-civic] The Next Chinese Threat - Sebastian Mallaby - Washington Post

[William Swiggard]

The Next Chinese Threat

By Sebastian Mallaby
Monday, August 8, 2005; Page A15

Last week congressional bullying drove China to abandon its bid for 
Unocal, a small California-based oil company. Anyone inclined to 
celebrate should focus on the likely sequel: China will redouble its 
efforts to buy energy and other resources in shaky developing countries. 
This will undermine Western efforts to promote transparency and fight 
corruption there, damaging U.S. interests and values far more than a 
Unocal takeover.

To see why this is so, begin with China's motives. China wants to 
control supplies of oil and other commodities because it's scared of 
price shocks; owning oil or other mineral reserves provides anti-shock 
insurance. As Chinese economists argue, their economy is extremely 
vulnerable to external shocks because it's extremely open. The Unocal 
defeat is not going to stanch China's drive to buy foreign resources.

China has two ways to do that. It can buy Western resource companies: 
That was the Unocal strategy. Or it can do deals in resource-rich 
developing countries, which tend to be plagued with corruption, human 
rights abuses and other unsavory practices. To cite just two of many 
examples, China has invested in Sudan and Zimbabwe, propping up both 
countries' unspeakable dictatorships.

<>As far as Western interests are concerned, these Chinese resource 
investments may sound like a marginal threat. But they go to the heart 
of the most promising growth area in development policy. Old development 
was based on aid and trade, but there's a limit to how much aid poor 
countries can absorb, and trade isn't a panacea. New development adds a 
third tool: a focus on governance and transparency in poor countries and 
also, crucially, among the outside governments and firms that deal with 
them.

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/07/AR2005080700884.html?nav=hcmodule 

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