Dambisa Moyo Warns of China’s Cornering of Commodities
Dr. Dambisa Moyo, author of Winner Take All: China’s Race for Resources and What It Means for the World, was interviewed by Fox Business regarding the repercussions of China’s push to acquire commodities more aggressively than any other country in the history of the world.
Moyo disagreed with the assessment by some that China’s economy is going to crash. She sees a soft landing with worst case estimates showing a 7 to 7.5 percent growth in GDP, but if growth slows below 6 percent we should be very worried.
Moyo said the fundamental question is whether the government will step in if problems persist and she believes the evidence is that they will. Chinese officials recently cut rates 25 basis points which they hadn’t done in a long time. The Chinese also have ample room to intervene with a stimulus package if need be, she added.
Moyo said the recent decline in commodity prices is emblematic of softening growth, but fundamentally the story between demand and supply still exists. Moyo said China’s push for commodities is multilateral in that it is going to Brazil, Argentina, across Africa and Eastern Europe while developing symbiotic deals. Moyo compared China’s multilateral approach to the U. S. which has traditionally adopted a unilateral approach of securing resources through wars and military incursions such as that in Iraq. The U. S. strategy has forced resources prices much higher than they would otherwise be, she added.
Moyo adamently stated that over the long term the implications will be that prices of land, water, energy and minerals will be driven much higher. People’s belief there will be a reprieve in the supply of energy might be overplayed according to Moyo.
When asked what could be done to mitigate the damage from higher commodity prices, Moyo said the U. S. needed to be much more aggressive in negotiating deals in a multilateral fashion across the world.