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New Report on How China Secures Diversified Resources by Pivoting toward Autocratic Regimes

A new study revealed a trend that China is turning to more autocratic regimes in securing natural resource supplies and is buttressing its tactics to weaponize trade against geopolitical rivals.

“China’s resource security redrawing geopolitical map,” a section of the report Political Risk Outlook 2021 recently issued by Verisk Maplecroft, a U.S. based research group, describes how China diversifies its imports and achieves its resource security.

“Beijing prefers suppliers from stable autocratic regimes over democracies that involve frequent changes of governments and potential shifts in policy. Autocracy is a governance system it is comfortable operating with and can influence.”

“China is seeking to strengthen its control over global supply chains via overseas investments and partnerships with international majors. Beijing has been supporting Chinese SOEs (State Owned Enterprises) to ‘go global’ and establish control of resource bases overseas since the late 1990s. … The number of Chinese-owned base metals and gold companies in Oceania has grown from zero in 2000 to 59 in 2020.”

“Geopolitical instability in the Middle East and the South China Sea has induced China over the past decade to diversify its seaborne imports with overland imports, as reflected by its massive investment in energy pipelines with Russia and Central Asia. The Myanmar-China oil and gas pipelines are another example of China’s attempt to reduce its reliance on a sea lane that transits through strategic chokepoints, in particular the Strait of Malacca.”

BY diversifying its natural resource suppliers, Beijing is able to bring greater geopolitical leverage. Beijing can use trade as a coercive weapon. “This diplomatic tool is most effective when wielded against commodities in which China has a diversified import profile and the target state is dependent on the Chinese market.”

Beijing has also strengthened its relationship with Russia driven by their deteriorating relationships with the West. With increased Chinese investment in and trade with the “Belt and Road” countries, “these partnerships will reshape multilateralism with an economic order that is more China-centric.”

Source: Verisk Maplecroft, March 18, 2021