If you read current affairs books at all, you’ll have heard of Dambisa Moyo, the Zambian-raised economist who has worked for both the World Bank and Goldman Sachs. She’s the author of the inflammatory Dead Aid and the equally contentious tale of the West’s decline, How the West was Lost. This, her third book, has proved a talking point too: Winner Take All: China’s race for resources and what it means for us.
The book is about the coming global commodity shortage. As the world gets richer and global population grows, demand is increasing for all basic commodities – land, water, food, oil, metals and minerals. Demand will exceed supply for some of these, leading to rising prices and some rocky times on the commodity markets or worse. There may be acute shortages, famine and conflict, says Moyo, and falling standards of living.
What Moyo points out is that although the current trends aren’t hard to read, only one country has systematically set out to prepare for this coming age of resource scarcity. Resource depletion is real, but “China seems to be the only country that’s preparing for this eventuality in a sustainable and deliberately constructive way.”
China is doing this by building alliances with key resource providers, often in poorer countries. It offers investment capital for infrastructure, in return for vast quantities of resources to be delivered over the coming decades. It’s a partnership, offering development opportunities to the host country in return for the resources that China needs to fuel its own rapid rise.
As well as spotting the opportunity, China has tools at its disposal that others don’t have. Unlike democracies, it is able to take a long view. There are no elections to lose, and long term planning is much more viable. The state is involved at every level of the economy, and China’s biggest banks, mining companies and oil corporates are all or partly state owned, giving them an ability to work to a masterplan in ways that other countries can’t. Most importantly of all they have enormous spending power, a wealth fund accumulated over many years, which allows them to pay above the odds for resources. Nobody can compete with China’s capital reserves, and Moyo warns that China could totally dominate the global commodity markets if it so desired.
Winner Take All explores all of this with flair, delving into the functioning of the commodity markets and how countries meddle in them. It investigates land leasing and the many suspicions around China’s strategy, especially in Africa. And it has a fairly blunt message for most of the world – you’re not ready, and you ignore China’s actions at your peril.
What it doesn’t do is engage with any of the existing work on resource depletion or on coping with a world of rising resource prices, and that’s a shame. It’s entirely off on its own, working the issue from an economics point of view. That’s fine until you realise that the book has no solutions in mind for anyone. Nobody else can do what China is doing, and Moyo has no convincing suggestions, other than a very vague idea for some kind of international commodity regulator.
If Moyo had engaged a little with others who have written about depletion and scarcity, she might have found something more useful to bring to the table, and her perspective on existing ideas would have been valuable. One example would be the Circular Economy, a design movement that seeks to move industrial processes from a linear process of consumption of resources, to a circular process where everything is reused and recycled. This would be a viable alternative strategy to the problem described. Instead of trying to grab resources to maintain current consumption levels, it transforms the idea of ‘consuming’ resources altogether, defusing the problem.
It’s also oddly sloppy in places. A whole section on copper refers to production and consumption statistics in single figures, eg China’s production of 1.1 metric tonnes a year. That’s 1.1 million metric tonnes of course, but nowhere in the entire section is that word ‘million’ found, leaving the reader with the surreal notion that China produces a single glistening cube of copper every year. Elsewhere she points out that the quality of copper ore is declining, and that this will lead to inferior products – a complete misunderstanding of the problem. Lower quality ore means you have to mine more rock to get the same amount of metal out, not that you’ll be forced to make laptops out of low grade copper.
Still, provided you’re able to fill in the gaps yourself, Winner Take All is a welcome contribution to a debate that has been filed as an environmental concern for far too long. It’s not the final word on resource depletion, or on China’s resource strategy, but it does put the two together in ways that nobody else has done just yet. The book may not get everything right, but it’s central premise deserves to be heard loud and clear – China’s actions on resources will have big consequences for our ability to meet our future resource needs, and we cannot afford to be complacent about it.