Friday, January 18, 2013

On finite resources and China’s urges

We constantly debate about the world’s finite and fast depleting natural resources; that everything from fossil fuel to farmable acreage is in short supply. Some often take the line that the quest for mineral wealth would be a fight to the death. Others, like academic Dambisa Moyo take a more pragmatic line on resource scarcity and rationally analyse what is at stake as she has done in her latest book Winner Take All: China’s race for resources and what it means for us.

That the Chinese are in town for more than just a slice of the natural resources cake is well documented. Yet, instead of crying ‘wolf’, Moyo sequentially dissects and offers highly readable conjecture on how China is leading the global race for natural resources be it via their national oil companies, mergers, asset acquisitions, lobbying or political leverage on an international scale.

While cleverly watching out for their interests, the author explains, in this book of just over 250 pages split by two parts containing 10 chapters, that the Chinese are neck-deep in a global resources rush but not necessarily the causative agents of perceived resource scarcity.

However, that they are the dominant players in a high stakes hunt for commodities from Africa to Latin America is unmistakable. For good measure and as to be expected of a book of this nature, the author has examined a variety of tangents hurled around in a resource security debate. The Dutch disease, geopolitics, risk premium in commodities prices, resource curse hypothesis have all been visited versus the Chinese quest by Moyo.

The Oilholic found her arguments on the subject to be neither alarmist nor populist. Rather, she has done something commendable which is examine how we got to this point in the resources debate, the operations of commodity markets and the geopolitical shifts we have seen rather than sensationalise the subject matter. China, the author opines may be leading the race for resources, but is by no means the only hungry horse in town.

Overall, it is a very decent book and well worth reading given its relevance and currency in today’s world. The Oilholic would be happy recommend it to commodities traders, those interested in international affairs, geopolitics, financial news and resource economics. Finally, those who have made a career out of future projections would find it very well worth their while to absorb it from cover to cover.

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© Gaurav Sharma 2013. Photo: Front cover - Winner Take All © Allen Lane / Penguin Group UK.

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