Geopolitics: Chinese

Updated 25 February, 2014

Geopolitics is:

  • The application of the influence of political and economic geography on the politics, national power, foreign policy, etc, of a state.
  • Politics as they affect the whole world.

China appears to be adept at playing geopolitics. India, as in most things, is playing catch-up.

However, China’s game needs to be viewed in the light of a 2009 statement when visiting Mexico by the then leader-in-waiting VP Xi Jinping:

” First, China does not export revolution. Second, China doesn’t export hunger and poverty. Third, China doesn’t come and cause you headaches. So what’s more to be said?”

Xi’s first point refers to Russia’s and Cuba’s past approach. His second refers to past colonialism. And his third to the West’s insistence that economic and military aid comes with strings. Strings of democracy, human rights and so forth. And berates many for lack of transparency or human rights.

More interesting is what Martin Ivens, London’s Sunday Times political correspondent wrote in Jan 2011: “Twenty years ago, after the Tiananmen Square ‘incident, … to the West it (the Communist party) offered another deal: forget human rights, the Dalai Lama and all that, leave us with our system and we will leave you alone. Together we can create a ‘harmonious world’ and what’s more we will lend you the money to buy our goods.”


Chinese geopolitics is covered under: resources, trade-and-aid, trade deficit/surplus and the RMB (Renminbi) valuation, language and culture and, finally, military presence.

Resources is spilt into: raw materials, energy, manpower, and, finally, water

Raw materials

There is no shortage of publicity about the shortage of raw materials: steel, coal, cement, building materials and so forth.  And wherever one looks the hand of China can be seen garnishing these resources to feed into its growing and insatiable building and manufacturing enterprises. China Inc is competing, very successfully, on all fronts and on all continents: Asia, its backyard; Africa, Australia, Latin America, and Canada in North America, full of riches.

There is not one commodity where there is no Chinese organisation at play. It used to export silver, but with the use in photo-voltaic cells in solar panels, it has become an importer. And in one area, that of rare earth elements (REE), China – for the present – seems to have a monopoly. These 17 elements are needed in many of today’s technologies, from smartphones, to batteries, to catalytic converters and missile systems. Although globally there are more of these metals than say gold, in the past 20 years, China had been mining their deposits in Mongolia at such a low cost that many existing miners have shut shop. Only to discover that in 2009, the need is for 134,000 tons but with only 124,000 being mined, the deficit coming from stocks. Although China has 34% of the REEs, it has cornered over 95% of the production.

The EU initiated a study of potential shortage of 49 raw materials including rare earths, precious metal such as cobalt and lithium and, of course uranium plus water! The US is naturally exhorting its miners to restart operations urgently. In about four years, this shortage and monopoly should ease. But the question is, what else and where else will a resource shortage emerge?

In September 2010, China refused Japan an export licence. The refusal comes amidst rising tensions between China and Japan over a disputed collection of islands in the East China Sea. To some, that is playing geopolitics. This refusal has caused Toyota to form a rare earths team. Each Prius needs, for example, 25 pounds of lanthanum in its nickel-
metal hydride battery.

Deep sea resource exploration and extraction is next on the agenda. China sent three scientists to the bottom of the South China Sea in the summer of 2010. They descended more than 3 km in a craft the size of a small truck. Next year the craft, Jiaolong (named after a mythical sea dragon), will attempt 5 km and 7km in 2012. The purpose is to lay the foundation for deep sea resource survey and – later – extraction.

Energy

By energy we mean mainly coal, oil, and uranium, as China has an abundance of wind and has become the world leader of solar power, supplying both its own growing needs as well as becoming a leading exporter of photo voltaic panels. Most of China’s electricity is produced from fossil fuels (80% from coal, 2% from oil, 1% from gas in 2006) and hydropower (15%).

Coal: Although China has vast coal deposits and is the world’s largest producer (3bn tons in 2009), its needs surpass its own output as coal is needed both for power and for steel making, so it became a major importer at over 100m tons in 2009 and rising to possibly 170m in 2010. South Africa and Australia are the main suppliers.

Oil & gas is in short supply as China is increasingly becoming a private car nation. Apparently, in August 2010, Chinese citizens bought around 55% more cars than they did a year ago! Such is the growth of private car ownership that one article said 45% of Chinese car owners have never had to change tyres, their cars being less than 2-3 years old! China has surpassed the US for sales of new passenger cars. Chinese oil companies are involved either as partners or customers around the world, taking stakes in many blocs and investing in some national oil companies such as Petrobras, the Brazilian oil company who was provided with $10bn loan from a Chinese bank in February 2010. China is building a 7,000km gas pipeline to move gas from Turkmenistan via Uzbekistan and Kazakhstan.

Uranium is needed badly by China which has 12 in