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China’s Massive Appetite for Commodities Sparks Concern

  • Nico Colombant

Chinese woman talk business with local women at a shop in Lagos, Nigeria, June 16, 2007. (file photo)

Chinese woman talk business with local women at a shop in Lagos, Nigeria, June 16, 2007. (file photo)

China’s massive appetite for commodities is creating concerns for the global economy, the environment and workers in other countries.

In a series of reports, VOA is looking at the economic power modern China wields. Correspondent Nico Colombant reports from Washington.

Chinese government and company officials are signing agreements at a dizzying pace around the world, including in places where few other foreigners invest.

China's Zhonghui Mining Group this year signed a copper mining deal in Zambia valued at $3.6 billion.

And Chinese firms are signing other deals in Africa and other parts of the world for access to oil and other commodities to fuel China's growing economy.

J. Peter Pham, an Africa expert with the Atlantic Council in Washington, thinks Chinese officials have been astute during their commodities buying spree.

“Much of the money is actually tied up in credits or soft loans for infrastructure or for other products which are linked to Chinese firms," he says. "So the amount of cash that governments receive often is much lower than the billion dollar figures that are thrown about.”

When Chinese companies use infrastructure projects as a payment, for example, as is the case in Sudan, they often use equipment, materials and workers from China.

Former U.S. Ambassador David Shinn, who studies China’s relationship with Africa, warns that many deals lack transparency.

"One does not always know what they are being paid nor does one know how clean all of the deals are."

Images of Chinese business interests across the developing world

Environmental concerns

Environmental advocacy groups are also raising questions.

In many parts of Southeast Asia, including here in Indonesia, the environmental group Greenpeace says China’s purchases of palm oil, timber and paper contribute to deforestation.

Greenpeace activist Bustar Maitar is trying to make sure Chinese companies do not break laws aimed at protecting the forest.

“What I am seeing now is they are much more careful with their operation here in Indonesia, to try to stop being exposed by the non-governmental organization for example.”

Worker's rights

People who work for Chinese companies are also wary.

In Liberia, where China has overtaken the United States as the leading business partner, many workers complain of mistreatment and low pay from Chinese bosses.

One woman, who would not be named, took part in a protest in the capital, Monrovia.

“They have no care," she says. "They are always laughing at us, beating us up on the job site. They are abusing our parents, abusing ourselves. If you are doing a job and you make a little mistake a Chinese man will come and kick you.”

Chinese officials reject these accusations. They also say that unlike Western investors, Chinese investors do not meddle in internal politics.

In rural Senegal, the Chinese owner of a sesame seed processing plant, Riping Ouyang, defends his work.

“It is not about exploiting the country and taking its money." he says. "No, on the contrary, we come to help the country and the rural areas, so that they can work and have their own earnings.”

Most commodity prices have risen sharply since the turn of the new century, coinciding with growing Chinese needs.

Economists say the commodity price boom could continue over the next decade or so, while China’s enormous commodity appetite will last much longer and its effects will only deepen.