Dependency on China and the Impacts of Stopping Chinese Resource Extraction

Currently, China leads the world in extracting and processing many crucial natural resources, especially rare earth elements (REEs). By controlling processing, China gains significant leverage over the global market, as other economies rely on processed resources from China in their own markets. As such, any changes in China’s policies or extraction/processing could disrupt global supply chains and influence the global prices of resources.

Resource for Infrastructure Deals

To access key areas with abundant natural resources, China has implemented “Resource for infrastructure” (RFI) deals with numerous countries, where China gives out loans for infrastructure development, which are repaid with natural resources. These deals are a part of China’s broader Belt and Road Initiative (BRI), which is a collection of investment and development initiatives that aims to stretch across the globe. While it makes countries dependent on China for infrastructure in addition to the importation of Chinese-manufactured goods and processed resources, these deals also help them develop infrastructure, which could greatly improve their living conditions and economies. One famous example of China’s RFI deals is their 2008 Sicomines deal with the Democratic Republic of the Congo (DRC), which plays a crucial role in the global cobalt market. The DRC produces 80% of the world’s cobalt, with 67.5% of China’s refined cobalt coming from the DRC, making China’s position in the global market dependent on resource extraction in the DRC. In the deal, China came to own 15 of the DRC’s 19 best copper and cobalt mining sites, using profits from mining operations to cover the costs of infrastructure development in the region. Following the deal, the DRC bargained for better terms and more investment, as the agreement was increasingly viewed as an imbalance in China’s favor and actual infrastructure investments were fewer than expected. In January 2023, a final round of negotiations led to a new agreement of $7 billion for infrastructure development. While the lack of oversight of how much money is invested or how much is being spent on what remains a pressing issue that may lead to further tensions in the long term, the new deal seems to be a temporary solution for both sides: China continues to extract resources, and the DRC is promised a significant increase in investments. 

Implications for the Topic

While many debaters on the affirmative will focus on other countries’ dependency on China for infrastructure and processed resources, which is an important point that must be properly addressed, it is also important for debaters to look at the flip side. China is also dependent on other countries for resource extraction, which also gives those countries more leverage on China, allowing them to bargain for better deals and work out new diplomatic relationships, as shown by the Sicomines deals. Additionally, there is no intrinsic goodness/badness to dependency on China’s natural resources. A common argument on the affirmative is that such dependency could allow China to gain immense amounts of geopolitical leverage on its rivals, potentially weaponizing its monopoly on resource extraction and processing on the global economy. However, for the negative, debaters could make the point that because the world is dependent on China’s natural resources, affirming and decreasing their resource extraction would devastate the global economy due to an immediate global deficit of natural resources. At the end of the day, no interpretation of dependency is set in stone: it is valuable ground that can win rounds, but it itself must first be won.

Read more here:

• Farrell Gregory, Paul J. Milas, US Army Reserve Innovation Command

• Lina Benabdallah, Africa Policy Research Institute

• David G. Landry, EconStor

• Klara Vlahčević Lisinski, New Lines Institute

• CCSI, Columbia

• James McBride, Noah Berman, Andrew Chatzky, Council on Foreign Relations