growing Chinese involvement in the Third World. Rather than buying
raw materials from American and European companies, the Chinese are
getting them directly at the source. They make deals with governments
and send people in to build mines and wells.
The few people who notice this trend and comment on it typically see
it as a threat. They see it as representing a decrease in the power
and influence of America, and an increase in the power and wealth of
China. They suggest that this new Chinese activity is to be worried
about, and possibly opposed.
I argue that this is not the case. The Chinese, for various reasons,
will have a comparative advantage in resource extraction. Their
future dominance of the industry is practically inevitable. We should
think about dealing with the consequences, and not preventing it.
Western firms are increasingly being constrained by government
regulations and activist pressures. They have to follow a strict set
of rules regarding things like bribes. The firms are constantly being
questioned about things like human rights and environmental policy.
In some cases, they are even facing lawsuits in American courts
regarding things that government soldiers did on their property.
Chinese firms have no such constraints or problems. Their people and
government want the companies to go out and bring wealth to China in
the most effective way possible. The Chinese are too busy trying to
improve conditions at their home businesses to care about the things
that the companies to to foreigners.
Ironically, the Third World governments often prefer China's method.
Americans and Europeans insist on all kinds of complicated paperwork
and conditions, while the Chinese mainly talk about business and
money. As a result, the Chinese are easier to deal with. They bring
wealth and development without so much bureaucracy.
However, the Chinese are learning that things are not always so easy.
Recently, some Chinese were killed by militants in Sudan. This is
only the latest in a string of attacks on Chinese workers in nasty
parts of the world. I suspect that the Chinese will not tolerate this
for long. The people of China are very nationalistic and assertive,
and still very sensitive to attacks on their people or power.
The Chinese had been making the naive assumption that they would not
be attacked because they are not Western. They apparently believed
that we were hated because of the history of imperialism, and deserved
to be attacked for that reason. They are encountering a simple truth
of the world: people get attacked because they are targets. If you
are working in a lawless place and have something to steal, you will
I expect that, in the near future, the Chinese will begin to move
aggressively to protect their people and investments. I also expect
that these difficulties will not deter the Chinese from investing more
in raw materials production. I predict that, as the Chinese will use
an increasing amount of military and diplomatic resources to project
their power, their companies will eventually become more effective at
dealing with these difficulties and extracting the resources.
I believe that, in a few decades, there will be very few American or
European companies doing dirty work in dangerous places. They will
sell their overseas operations to Chinese companies. The lack of
legal problems, regulatory constraints, or activist pressure, combined
with the explicit support of an aggressive government, will make the
operations much more efficient and profitable.
Really, this will be a win-win situation for both America and China.
We will get all the resources we were getting before, we will get them
more cheaply, and we will have the emotional comfort of knowing that
our countrymen are not forced to risk their lives or get their hands
dirty. The Chinese will expand their economy and get richer.
The losers, of course, will be the inhabitants of the poor countries
of the world. They may think that the USA is a militaristic imperial
power, but they haven't seen anything yet.
However, if I were to be really cynical, I might say that Chinese
imperialism will be a good thing for them as well. Fascism is usually
better than anarchy. I would rather live in Tibet than Congo. If the
Chinese manage to install puppet governments that maintain law and
order, the people could be better off.