European resource imperialism dominated world politics from the close of the Napoleonic Wars to the end of the Second World War. In that period, the Global South was viewed simply as a source of natural resources and cheap labor by European imperialists.
It was not a change of attitude that collapsed the system. It was the bankruptcy of the European nation-states caused by World War II. They simply could not afford to maintain their resource-focused empires. The newly emboldened and fantastically rich United States, which was relatively self-sufficient in natural resources, had no interest in maintaining the imperial power and reach of its European “allies.” The sole focus of American foreign policy from 1945 to 1989 was to contain Soviet Communism.
Today, three generations after the end of the Second World War, a turnabout in world affairs is only now becoming apparent.
The nation-states of the Global South are now seeking from the Global North the technologies required to add value to their natural resources within their own nations, advancing those nations toward modern industrial states in which domestic consumer demand can be satisfied by domestic manufacturing using domestic natural resources as feedstock.
China, the first of the formerly exploited colonial nations to achieve total success in transforming its economy from agrarian to manufacturing, has rapidly become a rival to the United States’ disjointed practice of public and private capitalism. American politicians still using the language of the Cold War characterize China as a military threat to the United States and therefore the “West.” But in fact, China is an economic competitor first and foremost.
The naive, underdeveloped nations of the global South, especially those in Asia near China, have been courted by China to accept massive loans for internal development, with the goal of becoming self-sustaining manufacturing economies.
Through these loans, which cannot be repaid and are the types of loans that the American government called “fuzzy”, which meant that they were not solidly based on being repayable, but rather were for long-term developments of the societies of the recipient nations in such areas as transportation, agriculture, health and safety, China has advanced its own international agenda by taking effective control of ports, mines, and transportation networks in lieu of repayment of its loans
The Chinese government has today achieved its goal of imperial control over a global transportation and resource network. It did this not by military conquest or threat, but by accumulating, deploying, and focusing its enormous pool of state-controlled capital created in the last 25 years.
Now comes phase two of the Chinese program to propel it to the status of the world’s richest nation by the year 2049.
Phase two will be the targeted deployment of consumer manufacturing technology to the resource-rich nations of the global south, in exchange for China’s continued access to those resources.
China’s recent highly publicized denial of specialized technologies and equipment for the manufacturing of high-tech required components necessary to maintain the standards of living of the rich nations of the global north, based on the stated reason of not wishing to enhance the military capabilities of its rivals is merely a cover-up for its activities in the global south.
Those nations of the Global South most developed in their efforts to achieve a domestic manufacturing economy to support a consumer and service economy, such as Brazil, Chile, Argentina, and Peru are now the subjects of an intense campaign by China to supply them with the same technologies that are being denied to the Global North nations for the manufacturing of high-technology-based components for consumer goods, which are identical to those same components, technologies, and equipment being denied, for example, to the United States based on China’s determination that those components have a dual use, both military and consumer.
In return for the supply of manufacturing technologies to the nations of the global south, China, of course, asked that it be paid in natural resources, and lately also for some portion of the manufactured components. China’s planners seem to have recognized that lower-cost labor in Brazil, utilized to produce high-tech components, may be of direct value to the Chinese domestic economy.
Unnoticed by American politicians, China has sent teams of specialists to the nations of the Global South to identify downstream manufacturing opportunities in natural resources and to evaluate what individual nations need in terms of support. This is not only capital, equipment, and technology, but also skilled operators of such equipment and managers of such operations. China has offered to bring selected groups of individuals from its target countries to China for education and training, and also to supply, to begin with, the trained specialists necessary to kick-start the developments it is proposing and offering to the nations of the global south.
American politicians have no idea of the extent of the Chinese master plan. They continue to believe that by throwing money at a project, the problems can all be solved. Thus, the extremely poor choices made in Washington in the last two years to solve the critical minerals “crisis”. Inexperienced financiers have been gifted with enormous amounts of taxpayer money to develop resource production and high-technology manufacturing, for which they have no prior knowledge, experience, skills, or track record of success.
There is no more obvious mistake made by Washington’s politicians than its haphazard, chaotic financing of an attempt to revive a total domestic American rare-earth permanent-magnet manufacturing supply chain.
Washington has either failed to recognize the choke points in such a supply chain or has deliberately ignored them because they are all under China’s direct control today.
China’s goal is to deny the natural resources of the Global South to the Global North, not by military means, but by simply being the preferred trading partner of the nations of the Global South. In this, it is succeeding rather well.
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