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Ed Webb

The World Bank's Doing Business Indicators Still Work - Foreign Policy - 1 views

foreignpolicy.com/...business-indicators-still-work

opinion worldbank data indicators

shared by Ed Webb on 02 Apr 18 - No Cached
  • The Doing Business indicators measure the costs and the number of steps for starting a formal business — for example, a car dealership. If one were to open a car dealership in Madagascar, it would take eight days and cost 35.8 percent of the average annual income (this cost includes official fees and fees for legal or professional services). If one wanted to open a car dealership in Malaysia, it would take 18 to 19 days and cost 5.4 percent of the average annual income. Contrast this with opening a car dealership in United States, where it would only take around four days and cost 1.3 percent of the average annual income. The steps and costs reflect rules, and sometimes the corruption, in a system.
  • The existence of Doing Business has brought about thousands of reforms across the world over the last 15 years. They have led to job creation and improved access to credit and business registration, enhancing competition and investment opportunities worldwide.
  • Doing Business uses country pride and even national chauvinism as a form of jiu jitsu to get countries to reform policies that impact business regulations
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  • Doing Business is a sort of economic cholesterol check — important, even critical, but not the whole story.
  • some critics perceive Doing Business as a libertarian argument against the collection of taxes. On the contrary, Doing Business facilitates the participation of companies in the formal economy, including the payment of taxes and respect for the legal framework
  • The consensus, quite reasonably, calls for more women’s economic empowerment in the developing world. If we want to see empowerment, that generally means women participating in the formal economy, accessing loans from banks, and participating in global supply chains. Any business that seeks bank loans or seeks to participate in supply chains needs to be a formal business. Making it easier for anyone to start a business also has a positive impact on women’s economic empowerment
  • The Doing Business indicators have been subject to a number of methodological adjustments. These have been relatively minor in impact on most countries’ rankings. In the case of Chile, for a variety of reasons, the rankings swung more wildly, in such a way that the center-left Michelle Bachelet administration accused the World Bank and the rankings of being politically motivated. To make matters worse, Paul Romer, then the chief economist of the World Bank, in response to a question from the Wall Street Journal about the possibility of the the ranking being “tainted by the political motivations of bank staff” seemed to imply that he found the rankings unfair and misleading, and he said he would “recalculate national rankings of business competitiveness.” This caused a furor. Romer retracted his statement within 72 hours, the World Bank board reviewed the indicators, and management formally responded.
  • In the future, the World Bank’s money will be less and less important. Instead, its analytics, data, and ability to share lessons across countries are going to be increasingly valued. The World Bank imprimatur also matters more than we appreciate in the United States. The Doing Business indicators should be a big part of the World Bank’s future. Countries that seek to make improvements in their rankings of Doing Business are countries that seek to have better governance and have reform-minded governments. After 15 years of effort, Doing Business has improved with time and is one of the most valuable assets of the World Bank Group.
Ed Webb

President Trump's thoroughly confusing Fox Business interview, annotated - The Washingt... - 0 views

www.washingtonpost.com/...x-business-interview-annotated

Trump US USA Syria Iraq China military diplomacy media

shared by Ed Webb on 12 Apr 17 - No Cached
  • When you see that, I immediately called General Mattis. I said, what can we do? And they came back with a number of different alternatives.  And we hit them very hard. Now, are we going to get involved with Syria? No.  But if I see them using gas and using things that — I mean even some of the worst tyrants in the world didn't use the kind of gases that they used.  And some of the gases are unbelievably potent. So when I saw that, I said we have to do something.
  • people just don't see this, the level of brutality, the level of viciousness.
  • I was sitting at the table.  We had finished dinner.  We're now having dessert.  And we had the most beautiful piece of chocolate cake that you've ever seen and President Xi was enjoying it. And I was given the message from the generals that the ships are locked and loaded, what do you do? And we made a determination to do it, so the missiles were on the way.  And I said, Mr. President, let me explain something to you.  This was during dessert. We've just fired 59 missiles, all of which hit, by the way, unbelievable, from, you know, hundreds of miles away, all of which hit, amazing. BARTIROMO:  Unmanned? Brilliant. TRUMP:  It's so incredible.  It's brilliant.  It's genius.  Our technology, our equipment, is better than anybody by a factor of five.  I mean look, we have, in terms of technology, nobody can even come close to competing.
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  • So what happens is I said we've just launched 59 missiles heading to Iraq and I wanted you to know this. And he was eating his cake. And he was silent.
  • But I think he understood the message and I understood what he was saying to me.
Ed Webb

More Wealth, More Jobs, but Not for Everyone: What Fuels the Backlash on Trade - The Ne... - 1 views

www.nytimes.com/...els-the-backlash-on-trade.html

trade economy US USA China Netherlands EU jobs globalization automation robots

shared by Ed Webb on 28 Sep 16 - No Cached
  • “More global trade is a good thing if we get a piece of the cake,” Mr. Duijzers said. “But that’s the problem. We’re not getting our piece of the cake.”
  • For generations, libraries full of economics textbooks have rightly promised that global trade expands national wealth by lowering the price of goods, lifting wages and amplifying growth. The powers that emerged victorious from World War II championed globalization as the antidote to future conflicts. From Asia to Europe to North America, governments of every ideological persuasion have focused on trade as their guiding economic force. Advertisement Continue reading the main story But trade comes with no assurances that the spoils will be shared equitably. Across much of the industrialized world, an outsize share of the winnings have been harvested by people with advanced degrees, stock options and the need for accountants. Ordinary laborers have borne the costs, suffering joblessness and deepening economic anxiety
  • When millions of workers lost paychecks to foreign competition, they lacked government supports to cushion the blow. As a result, seething anger is upending politics from Europe to North America.
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  • Much of the global economy is operating free of artificial enhancements. Lower-skilled workers confront bleak opportunities and intense competition, especially in the United States. Even as recent data shows middle-class Americans are finally starting to share in the gains from the recovery, incomes for many remain below where they were a decade ago
  • technological disruption and economic upheaval are now at work in an era of scarcity
  • The worst financial crisis since the Great Depression has left banks from Europe to the United States reluctant to lend. Real estate bonanzas from Spain to Southern California gave way to a disastrous wave of foreclosures, eliminating construction jobs. China’s slowdown has diminished its appetite for raw materials, sowing unemployment from the iron ore mines of Brazil to the coal pits of Indonesia.
  • Trade did not cause the breakdown in economic growth. Indeed, trade has helped generate what growth remains. But the pervasive stagnation has left little cover for those set back by globalization.
  • China’s entry into the World Trade Organization in 2001 unleashed a far larger shock, but a construction boom absorbed many laid-off workers.
  • “We do need to have these trade agreements,” Mr. Bown said, “but we do need to be cognizant that there are going to be losers and we need to have policies to address them.”
  • Corporations that used China to cut costs raised their value, enriching executives and ordinary investors. Today’s Headlines Wake up each morning to the day’s top news, analysis and opinion delivered to your inbox. Please verify you're not a robot by clicking the box. Invalid email address. Please re-enter. Sign Up Receive occasional updates and special offers for The New York Times's products and services. Thank you for subscribing. An error has occurred. Please try again later. You are already subscribed to this email. View all New York Times newsletters. See Sample Manage Email Preferences Not you? Privacy Policy The casualties of China’s exports are far fewer, but they are concentrated. The rugged country of western North Carolina suffered mass unemployment as Chinese-made wooden furniture put local plants out of business. So did glassmakers in Toledo, Ohio, and auto parts manufacturers across the Midwest.
  • Even among those who support trade, doubts are growing about its ability to deliver on crucial promises. A 2014 Pew Research Center survey of people in 44 countries found that only 45 percent of respondents believed trade raises wages. Only 26 percent believed that trade lowers prices.
  • Workers employed in major export industries earn higher wages than those in domestically focused sectors.Americans saw their choice of products expand by one-third in recent decades, the Federal Reserve Bank of Dallas found. Trade is how raspberries appear on store shelves in the dead of winter.
  • In the fallout, the United States maintained limits on unemployment benefits, leaving American workers vulnerable to plummeting fortunes. Social welfare systems have limited the toll in Europe, but economic growth has been weak, so jobs are scarce.
  • automation has grown in sophistication and reach. Between 2000 and 2010, the United States lost some 5.6 million manufacturing jobs, by the government’s calculation. Only 13 percent of those job losses can be explained by trade, according to an analysis by the Center for Business and Economic Research at Ball State University in Indiana. The rest were casualties of automation or the result of tweaks to factory operations that enabled more production with less labor.
  • if robots are a more significant threat to paychecks, they are also harder to blame than hordes of low-wage workers in overseas factories.“We have a public policy toward trade,” said Douglas A. Irwin, an economist at Dartmouth College. “We don’t have a public policy on automation.”
  • China’s relentless development was turning farmland into factories, accelerated by a landmark in the history of trade: the country’s inclusion in the World Trade Organization.The W.T.O. was born out of the General Agreement on Tariffs and Trade, a compact forged in 1947 that lowered barriers to international commerce in an effort to prevent a repeat of global hostilities.In the first four decades, tariffs on manufactured wares plunged from about 35 percent to nearly 6 percent, according to the Federal Reserve Bank of Chicago. By 2000, the volume of trade among members had swelled to 25 times that of a half-century earlier.
  • Mexico — home to about 123 million people — was not big enough to refashion the terms of trade. When China joined the W.T.O. in 2001, that added a country of 1.3 billion people to the global trading system
  • The anti-trade backlash, building for years, has become explosive because the global economy has arrived at a sobering period of reckoning. Years of investment manias and financial machinations that juiced the job market have lost potency, exposing longstanding downsides of trade that had previously been masked by illusive prosperity.
  • Chinese imports eliminated nearly one million American manufacturing jobs between 1999 and 2011. Add in suppliers and other related industries, and the total job losses reach 2.4 million.
  • Mr. Trump vows to slap punitive tariffs on Chinese goods. But that would very likely just shift production to other low-wage countries like Vietnam and Mexico. It would not turn the lights on at shuttered textile plants in the Carolinas. (Even if it did, robots would probably capture most of the jobs.)
  • Trade Adjustment Assistance, a government program started in 1962 and expanded significantly a dozen years later, is supposed to support workers whose jobs are casualties of overseas competition. The program pays for job training.But Mr. Simmons rolls his eyes at mention of the program. Training has almost become a joke. Skills often do not translate from old jobs to new. Many workers just draw a check while they attend training and then remain jobless.
  • European workers have fared better. In wealthier countries like Germany, the Netherlands, Sweden and Denmark, unemployment benefits, housing subsidies and government-provided health care are far more generous than in the United States.In the five years after a job loss, an American family of four that is eligible for housing assistance receives average benefits equal to 25 percent of the unemployed person’s previous wages, according to data from the Organization for Economic Cooperation and Development. For a similar family in the Netherlands, benefits reach 70 percent.
  • Yet in Europe, too, the impacts of trade have been uneven, in part because of the quirks of the European Union. Trade deals are cut by Brussels, setting the terms for the 28 member nations. Social programs are left to national governments.
  • In China, farmers whose land has been turned into factories are making more steel than the world needs. Advertisement Continue reading the main story In America, idled steel workers are contemplating how to live off the land.
  • a provision that would enable multinational companies to sue governments for compensation when regulations dent their profits.Esso, a subsidiary of Exxon Mobil, the American petroleum company, has operations in the Netherlands. Suppose the government went ahead with plans to limit drilling to protect the environment?“They could sue the Dutch state,” he fumed. “We are not so sure in the Netherlands whether we want to give the multinationals so much power. We are a trading country, but it’s not always that trade should prevail against quality of life.”
  • the longshoremen fret about robots
  • Now, many longshoremen sit in glass-fronted offices set back from the docks, controlling robotic arms via computer terminals.
  • The robots will win in the end, because robots never strike. Robots improve with time.
  • Trade deals, immigrant labor, automation: As Mr. Arkenbout sees it, these are all just instruments wielded in pursuit of the same goal — paying him less so corporations can keep more.“When they don’t need me anymore,” he said, “I’m nothing.”
  • Ed Webb on 28 Sep 16
     
    Relevant to our class discussion on 9/27/16
Ed Webb

The Coronavirus Is Killing Globalization and Empowering Nationalists and Protectionists - 0 views

foreignpolicy.com/...ationalism-protectionism-trump

IR analysis opinion pandemics globalization populism

shared by Ed Webb on 01 Jun 20 - Cached
  • what if the economic disruption has an enduring impact? Could the coronavirus pandemic even be the nail in the coffin for the current era of globalization?
  • The coronavirus crisis has highlighted the downsides of extensive international integration while fanning fears of foreigners and providing legitimacy for national restrictions on global trade and flows of people.
  • the coronavirus crisis is likely to have a lasting impact, especially when it reinforces other trends that are already undermining globalization. It may deal a blow to fragmented international supply chains, reduce the hypermobility of global business travelers, and provide political fodder for nationalists who favor greater protectionism and immigration controls
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  • The cost advantage of producing in China has eroded in recent years as the country has become richer and wages have soared.
  • The extended shutdown of many Chinese factories has pushed exports down 17 percent in the first two months of the year compared with a year earlier, and it has disrupted the production of European cars, iPhones, and other consumer goods.
  • there are still many advantages to producing in China, such as scale and efficient logistics. But the coronavirus crisis could mark a tipping point that prompts many businesses to remodel their supply chains and invest in more resilient and often more local patterns of production
  • businesses may discover that while face-to-face meetings are sometimes necessary, technological alternatives are often just fine
  • there is both an environmental reason and an economic one why business travel may decline
  • the coronavirus crisis has also exposed the hollowness of nativists’ assertions that their anti-immigration and protectionist policies make people safer. Even though the nationalist coalition that runs Lombardy’s provincial government is led by Matteo Salvini’s far-right League party, it has not been successful in protecting the region from the coronavirus. Nor, for all his desire to decouple from China, has Trump been able to prevent the coronavirus from reaching the United States
Ed Webb

Canada-Australia-U.K. Alliance Could Stand Up for Liberal Internationalism - 0 views

foreignpolicy.com/...rump-canada-australia-alliance

IR analysis opinion Russia China Canada Australia UK Britain institutions UN G7 G20

shared by Ed Webb on 01 Jul 20 - Cached
  • This club of three—as a new C-3 grouping of Canada, Australia, and Britain—has legs. But the idea must be reclaimed from the nationalist right: Not only is deepening foreign-policy coordination among Ottawa, Canberra, and London increasingly attractive amid the accelerating decay of the American-led world order, but this grouping has shown itself over Hong Kong to be far more meaningful in world affairs than seemed possible
  • Canada, Australia, and Britain are all facing a moment of crisis in their foreign policies. Canada’s humiliating failure to make it onto the United Nations Security Council reflects that it can now be picked on by China, or even Saudi Arabia, as the United States weakens. Australia is faced with cyberattacks and growing Chinese pressure. Britain, now outside the European Union, has been repeatedly threatened by China over Hong Kong, Huawei, HSBC, and nuclear power plants. All three are struggling to make their voices heard in international politics, in the various G-groups, in global bodies, and in President Donald Trump’s Washington.
  • Sadly, for all three, Germany and France are in a very different place from them on the authoritarian powers. Berlin, constrained by huge exports to China, wants to find a middle way between Washington and Beijing and is not ready to throw the EU into greater competition that could jeopardize critical trade for the sake of the interests of either Canada, Australia, or Britain. Paris, similarly, thinks differently on Russia. French President Emmanuel Macron’s emerging vision for a European Security Council or “Eurogroup”-style body including Russia, Turkey, and Britain is well outside the anti-authoritarian frame than Ottawa, Canberra, and London share.
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  • Chinese and Russian aggression against the democracies is likely to grow, the United States might critically weaken, and the EU seems firmly set on pursuing a middle path. Instead of worrying about looking back to the past, leaders in Ottawa, Canberra, and London should embrace the idea and propose a significant deepening of their foreign-policy coordination. This is most definitely not about “getting the band back together,” as one British Conservative member of Parliament greeted a trade talk announcement, but three middle powers building an anti-authoritarian group to resist great-power bullying in the 21st century.
  • A mini C-3 format would offer the best approach: a summit with follow-up that is both flexible and lightweight enough to get off the ground but with a permanent working group in foreign ministries advancing dossiers and initiatives. As the C-3 are all Commonwealth countries, summits could be timed to coincide with the biennial Commonwealth Heads of Government Meeting, where the leaders of Canada, Australia, and Britain regularly meet anyway.
  • Drawing both on Britain’s joint initiative with Canada to block Putin attending the G-7 and on Canada’s humiliating experience at the U.N., among this C-3’s first tasks should be to coordinate joint positions inside the U.N., G-7 and G-20. As far as major goals are concerned, this could include supporting any future attempts of Canada to win a seat on the U.N. Security Council and for Australia to formally join the G-7.
  • This is not about replacing working with the EU or the United States but creating a group for Canada, Australia, and Britain to jointly present tougher anti-authoritarian packages to big powers than had they tried to individually present them alone. The C-3, like the E-3 to the EU, would be complementary to existing Euro-Atlantic bodies.
  • deeper cooperation between Britain, Canada, and Australia has an image problem
  • imperial nostalgia or conservative culture politics
  • too anchored on ethnic fraternity
  • the idea needs to be decolonized
  • what about other middle powers? Why not include, say, Japan? This is where two critical principles of international politics come into play: Does your grouping have enough like-mindedness to be able to function and enough load-bearing capacity to get anything done? What Canada, Australia, and Britain are after is mutual geopolitical support; adding members that aren’t willing to offer that risks creating another talking shop like the Franco-German Alliance for Multilateralism. That group, which stretches from Chile to Kazakhstan, lacks the ability to agree on anything of substance—and the power to act on it.
  • there are simply not a lot of like-minded democracies to go around
  • Ottawa, Canberra, and London didn’t need each other in a U.S.-led world order or in a relatively benign world without authoritarian superpowers. But that system has decayed. Deep divisions, not just between the Europeans and Donald Trump, but with much of the U.S. national security establishment, are breaking up the old Washington-led ideological West. The common anti-authoritarian frame that once glued together Western foreign policy has come unstuck
  • In this world, the C-3 is a liberal international, not a nationalist, cause
Ed Webb

African workers find harsh conditions in Chinese-run plants | McClatchy - 0 views

www.mcclatchydc.com/...72419.html

China Africa business labour workers rights labor IR

shared by Ed Webb on 27 Jul 09 - Cached
  • Chinese companies can treat their employees pretty much as they please, the group wrote in a forthcoming report, because workers are desperate and local authorities either lack the capacity to enforce domestic labor laws or are easily bribed to ignore violations. In June, civil servants in Katanga went on strike after several weeks without receiving paychecks."The weakness of our government, for the Chinese, represents a business opportunity," said Jean-Pierre Okemba, one of the rights group's investigators. "We don't want a relationship like that."
  • While Beijing likes to describe its investments as a "win-win" for African nations, a case of developing nations helping each other, many Congolese have grown deeply resentful of Chinese business practices.
Ed Webb

The Somali Pirates' Business Model | UN Dispatch - 0 views

www.undispatch.com/somali-pirates-buisiness-model

Somalia piracy pirates business UN analysis

shared by Ed Webb on 29 Mar 10 - Cached
  • Last week, a group of investigators dispatched by the Security Council to Somalia released an exhaustive, 100 plus page report on arms trafficking, aid diversion, and other criminal activities in Somalia.
  • short explanation of the pirates' business model, tucked away in the report's annex
Ed Webb

WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices | Busines... - 0 views

www.guardian.co.uk/...-reserves-overstated-wikileaks

peak oil energy KSA US USA wikileaks economy

shared by Ed Webb on 09 Feb 11 - No Cached
  • The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.
  • possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as "peak oil".Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.One cable said: "According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray."It went on: "In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716bn barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900bn barrels of reserves."Al-Husseini disagrees with this analysis, believing Aramco's reserves are overstated by as much as 300bn barrels. In his view once 50% of original proven reserves has been reached … a steady output in decline will ensue and no amount of effort will be able to stop it. He believes that what will result is a plateau in total output that will last approximately 15 years followed by decreasing output."
  • "Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period."
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  • While fears of premature "peak oil" and Saudi production problems had been expressed before, no US official has come close to saying this in public.
  • Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security, said: "We are asleep at the wheel here: choosing to ignore a threat to the global economy that is quite as bad as the credit crunch, quite possibly worse."
Ed Webb

The demise of the dollar - Business News, Business - The Independent - 0 views

www.independent.co.uk/...ise-of-the-dollar-1798175.html

oil currency China USA EU Iran KSA UAE GCC gold dollar Euro Yuan Japan Yen Russia IR energy politics foreignpolicy

shared by Ed Webb on 06 Oct 09 - Cached
  • The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
  • a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."
  • World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations,"
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  • In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.
  • The current deadline for the currency transition is 2018.
  • Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.
    • Ed Webb
      Ed Webb on 06 Oct 09
       
      Fisky always has been prone to alarmism. Iran is a much tougher target than Iraq. But if even some of what he reports here is true, economic power relations are indeed about to shift. And the move away from dollars for oil trading has been predictable for some time.
Ed Webb

How Afghanistan's President Helped His Brother Secure Lucrative Mining Deals with a U.S... - 0 views

www.occrp.org/...ing-deals-with-a-us-contractor

US USA military politics Afghanistan corruption mining resources

shared by Ed Webb on 02 May 21 - Cached
  • In 2019 SOS International (SOSi), a Virginia company with links to the U.S. military, won exclusive access to mines across Afghanistan. President Ashraf Ghani’s brother is a major shareholder of a SOSi subsidiary. President Ghani granted this SOSi subsidiary, Southern Development, rights to buy artisanally mined ore. Southern Development operates a mineral processing plant on the outskirts of Kabul. The inroads made by SOSi and Southern Development into Afghanistan’s mining sector have roots in a 2011 initiative by U.S. special forces to work illegally with members of a pro-government Afghan militia on mining in Kunar province. Although shut down after an inquiry, these Kunar projects have since been quietly restarted as a private venture, and are benefitting those closest to the president.
  • The Taliban and other armed groups have battled both the central government and each other for control of the mines, using them to fund their insurgencies. Even former U.S. President Donald Trump coveted Afghanistan’s gold, lithium, uranium, and other mineral riches. In 2017, Trump was persuaded to keep troops in the country by its president, Ashraf Ghani, who dangled the prospect of mining contracts for American companies.
  • In 2011, American Special Forces operators introduced an eastern Kunar paramilitary commander, Noor Mohammed, and his deputy, known as Farhad, to a small Pentagon business development office called the Task Force for Stability and Business Operations. The Task Force, which operated in Iraq and Afghanistan, aimed to create jobs for locals in key industries like mining as part of a broader counterinsurgency strategy. In theory, good jobs would stop Afghans from joining the militants. “Their mission, to create small-scale, sustainable mining operations for the Afghans, was a solid fit to our FID [Foreign Internal Defense] mission,” said Heinz Dinter, a former Special Forces officer. The commandos asked the Task Force to help the two local warlords, who were illegally dealing in chromite, a valuable anti-corrosion additive used in stainless steel and aircraft paint. Afghan chromite is prized for its exceptional purity. With a crusher provided by the Pentagon, Mohammed and Farhad began to process their ore at Combat Outpost Penich, a small NATO base in eastern Kunar.
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  • public officials and leaders of government-aligned militias such as Mohammed and Farhad are forbidden by law to hold mineral rights.
  • Bush administration Deputy Secretary of Defense Paul Wolfowitz, an architect of the Iraq invasion, and other U.S. defense officials also joined the SOSi board
  • Task Force officials remained bullish on strategic mining long after the project was closed down; some even saw it as a possible form of Taliban rehabilitation. “The only way to realistically economically reintegrate the Taliban back into Afghanistan’s economy is with mining,” Emily Scott King, the former director of the Task Force’s natural resource group, said in 2019 at a special operations policy forum in Washington, D.C. “It can work within the hierarchy that the Taliban is used to, with commanders running small processing facilities or becoming the brokers for small miners.”
  • SOSi’s transition to a military contracting powerhouse came through its connections to the office of retired Army General David Petraeus
  • “There’s no conceivable way extraction or export could be done without the collusion of insurgent groups,”
  • Beyond its powerful American connections, SOSi was well positioned for growth because it wasn’t afraid to get dirty. In his thesis, Hartwig recommended offering the Afghan government “some type of benefit” to win support from “key leaders” for future mineral projects. Through its subsidiary, that is exactly what SOSi did, apparently cutting the president’s brother in on the deal.
  • “The U.S. government cannot directly do business with Afghan companies, so it goes through SOSi, a private entity, to secure deals with all the major Afghan media networks to broadcast Resolute Support and NATO communication material,”
  • A Southern Development document on file in the Ras al-Khaimah Offshore Free Zone, the secretive United Arab Emirates jurisdiction where its full ownership records are held, confirms that on June 17, 2014 — three days after Ashraf Ghani was elected president — SOSi owned 80 percent of the company, with Hashmat Ghani owning the remainder
  • Hashmat Ghani’s son, Sultan Ghani, listed a short SOSi internship in 2013 on his resume. Sultan Ghani now runs The Ghani Group, the family’s privately owned conglomerate with interests that include mining and military contracting. He apparently keeps in touch with old friends at SOSi. A photo uploaded to LinkedIn during the summer of 2019 shows him meeting with SOSi Vice President Helmick, and the account features praise for his interpersonal skills posted by another SOSi executive
  • Buying chromite from unlicensed local mines remains illegal in Afghanistan, but Ashraf Ghani’s election opened a rich new vein of opportunity. While the American Task Force and his own son once urged legalization of artisanal mining, the president has instead redistributed bureaucratic power, enabling extralegal activities.
  • A document leaked to OCCRP reveals that on December 26, 2019, the High Economic Council, in a process overseen by the president, authorized Southern Development to take on a project far larger than the original task force project in Kunar. The company received a mineral processing permit and permission to purchase artisanal chromite in six Afghan provinces: Khost, Paktia, Paktika, Kunar, Ghazni and Maidan Wardak.
  • In the spring of 2018, more than a year before Afghanistan’s High Economic Council signed over the rights to the chromite, Southern Development’s Kabul office had imported new crushing equipment from South Africa for its Afghan operation. In fact, Global Venture and its consultants, according to Scott King, had since 2013 been “advising private sector investors” with mining interests in Afghanistan about how to “quietly” restart initiatives like the Kunar chromite project. At the same 2019 Special Operations forum, she highlighted a mysterious $10 million investment into what she claimed were “legal” Afghan chromite mines.
  • Until late 2019, the company falsely claimed to have won chromite exploration rights in Kabul province from Afghanistan’s Ministry of Mines and Petroleum. The claim disappeared from the website after reporters asked about it.
  • Mining takes time to generate profits and it’s unclear if SOSi has started to see a return on its investments yet, but the price of chromite ore hovers around $200 per ton and with a worldwide market for stainless steel, Southern Development could become highly profitable. Meanwhile, its success is already spawning copycats.
  • Another American military contractor, DGCI, which is under federal investigation for its work in Iraq and Afghanistan, hired another former Task Force staffer in 2019, in an ultimately unsuccessful attempt to mine lithium in Afghanistan’s Ghazni province. Since then, DGCI has also tried to cultivate a relationship with the Ghani family, holding public charity events with Sultan Ghani.
Ed Webb

Why Factories Leaving China Aren't Going to India - Bloomberg - 0 views

www.bloomberg.com/...ng-china-aren-t-going-to-india

Africa India Pakistan Bangladesh Vietnam China development FDI manufacturing industry opinion

shared by Ed Webb on 26 Oct 19 - No Cached
  • Vietnam seems to be the consensus pick for winner of the U.S.-China trade war, as Chinese and other manufacturers shift production to the cheaper Southeast Asian nation. If there’s a loser, at least in terms of missed opportunities, it may be the countries of South Asia.
  • Faced with rising costs, Chinese manufacturers must decide whether to invest in labor-saving automation technologies or to relocate. Those choosing the latter present an enormous opportunity for less-developed countries, as Chinese companies can help spark industrialization and much-needed economic transformation in their new homes. 
  • The only proven pathway to long-lasting, broad-based prosperity has been to build a manufacturing sector linked to global value chains, which raises productivity levels and creates knock-on jobs across the whole economy
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  • African countries, too, are making manufacturing a top priority. Ethiopia alone has opened nearly a dozen industrial parks in recent years and set up a world-class government agency to attract foreign investment. The World Bank has lauded sub-Saharan Africa as the region with the highest number of reforms each year since 2012.
  • In the last five years, the American Enterprise Institute’s China Global Investment Tracker has recorded 13 large Chinese investment deals in Africa and only nine in South Asia.
  • In the past few years, Bangladesh has fallen to 176 out of 190 countries in the global Ease of Doing Business country rankings. DBL Group, a Bangladeshi company, is investing in a new apparel manufacturing facility that will generate 4,000 jobs -- in Ethiopia.
Ed Webb

What Lockdown? World's Cocaine Traffickers Sniff at Movement Restrictions - OCCRP - 0 views

www.occrp.org/...sniff-at-movement-restrictions

IR narcotics drugs trafficking pandemics crime networks

shared by Ed Webb on 28 May 20 - Cached
  • the predicament facing cocaine smugglers, as the global pandemic has increased scrutiny on them and disrupted their smuggling and distribution networks. But it also highlights their flexible approach to their trade, which has kept business booming even as many of the world’s legal sectors have ground to a halt.
  • OCCRP reporters have found that the world’s cocaine industry — which produces close to 2,000 metric tons a year and makes tens of billions of dollars — has adapted better than many other legitimate businesses. The industry has benefited from huge stores of drugs warehoused before the pandemic and its wide variety of smuggling methods. Street prices around Europe have risen by up to 30 percent, but it is not clear how much of this is due to distribution problems, and how much to drug gangs taking advantage of homebound customers.
  • cocaine continues to flow from South America to Europe and North America. Closed trafficking routes have been replaced with new ones, and street deals have been substituted with door-to-door deliveries.
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  • As many countries begin partially reopening their economies, traffickers may now be in a position to become more powerful than ever. With economies in distress and many businesses facing ruin, cash-rich narcos may be able to cheaply buy their way into an even bigger share of the legitimate economy.
  • “There has always been a stock, it’s a very organized chain. It’s the way to control everything, especially the price. The stocks are on beaches such as Tarena [near the border with Panama], banana plantations, in the jungle. The stashes are everywhere,”
  • Traditionally, smugglers have used small, very fast speedboats, as well as fishing vessels and submarines, to ply their northern route. Lockdowns have made these methods harder to use, mainly for logistical reasons. So instead, smugglers are turning back to older, slower routes that are often broken up in parts.
  • Unlike exports to the United States, cocaine bound for Europe is typically moved in legal air and sea cargoes, especially fast-moving fresh goods such as flowers and fruit. The latter, as food, has continued to move unimpeded during the pandemic, helping feed Europe’s 9.1 billion euro-a-year cocaine habit. Colombia’s banana industry, for example, has been exempt from local lockdown measures, allowing cocaine to keep moving through the crop’s supply chain. “[Anyone] in the authorities or security that meddles with this route goes down,” said Rául, the Gulf Clan member, adding that people who are paid off to facilitate the smuggling of cocaine have an incentive to keep the drugs flowing. “Everybody eats,” he said.
  • Mexican cartels have used the crisis as a public relations opportunity. People associated with the cartels, including the daughter of imprisoned Sinaloa cartel chief Joaquín “El Chapo” Guzmán, have publicly distributed food and other essential items to the poor. Meanwhile, the country’s drug violence continues unabated, claiming an average of 80 lives per day.
  • In March and April, Spain seized over 14 tons of cocaine in inbound shipments — a figure six times higher than the same period the previous year, said Manuel Montesinos, the deputy director of Customs surveillance at the Spanish Taxation Agency. “We are very struck by the frenetic pace,” Montesinos said. “Almost every day we receive alerts of detections of suspicious operations.”
  • Ramón Santolaria, the head of anti-narcotics at Spain’s national police in Catalonia, said cocaine traffickers may have mistakenly assumed that the pandemic would have reduced monitoring at ports. The cartels “have to continue exporting,” Santolaria said. “They are like a company. They can’t store everything in their countries, since it would be very risky.”
  • Italy has fallen silent as a point of arrival, despite being home to mafia groups that dominate Europe’s cocaine trade. Seizures dropped by 80 percent over the months of March and April compared to the same period last year
  • “Italy did not receive much via ports or airports and that is because during lockdown we have been controlling them a lot,” said Marco Sorrentino, the head of anti-mafia department of Italy’s financial police, the Guardia di Finanza. Italian crime groups have shifted their operations to Spain, where they have large “colonies” according to Sorrentino. “Italian mafias and their partners thus sent cocaine mainly to Algeciras or Barcelona, and then from there they moved it on wheels to the rest of Europe and to Italy,” he said. “As cover-up they used trucks filled with fresh fruits or also soy flour,” which resembles cocaine.
  • At the street level, lockdowns have played havoc with cocaine sales — but have also failed to stop the trade. But in some cases at least, dealers’ adaptations may have actually put them in a more profitable position than before, as cocaine users are desperate and confined at home. “Even though they don’t lack product, they have raised prices a bit and are cutting it more,”
  • The solution? Delivering it to customers in the guise of food orders, or couriered by essential workers carrying documents that give them permission to move around freely. Dealers have also staked out positions in socially distanced queues outside supermarkets — one of the only permitted places to gather in public under Italy’s strict lockdown rules, which began easing up in early May.
  • The main dark web marketplaces have seen an increase in sales of roughly 30 percent since lockdown measures started coming into effect worldwide
  • “Private citizens who are in need and won’t have access to a bank loan will be victims of loan sharks,” he said. “But what worries us the most is that licit companies might be in need, and be approached by mafia organizations that will propose to become minority shareholders.” “And once this happens, they actually take over the whole company,”
Ed Webb

Energy majors exaggerating green performance: analysis - Al-Monitor: Independent, trust... - 0 views

www.al-monitor.com/...ing-green-performance-analysis

climate energy business oil advertising disinformation analysis

shared by Ed Webb on 10 Sep 22 - Cached
  • nergy majors are exaggerating their green credentials in public messaging while continuing to allocate the majority of new investment to oil and gas projects, according to an industry analysis released Thursday.Campaigners say this "significant misalignment" between communication strategies and business plans could allow five of the biggest privately-owned energy firms to continue to delay the decarbonisation needed to avoid the worst impacts of climate change.
  • public communications were found to contrast with the five's planned capital expenditure for 2022, with just 12 percent of new investments earmarked for low-carbon activities
  • the five corporations had spent $750 million on climate-related messaging last year alone
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  • significantly cheaper than decarbonising their business models and would encourage governments to continue subsidising their products
  • Some of the firms analysed plan to increase oil and gas production by 2026, something the analysts said would see their emissions "significantly overshoot" the International Energy Agency's recommended net-zero pathway.
  • "climate disinformation"
Ed Webb

Chinese TV Host Says Regime Nearly Bankrupt | Business & Economy | China | Epoch Times - 0 views

www.theepochtimes.com/...me-nearly-bankrupt-141214.html

China economy analysis recession

shared by Ed Webb on 29 Nov 11 - No Cached
  • Lang’s assessment that the regime is bankrupt was based on five conjectures. Firstly, that the regime’s debt sits at about 36 trillion yuan (US$5.68 trillion). This calculation is arrived at by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion, he said). But with interest of two trillion per year, he thinks things will unravel quickly. Secondly, that the regime’s officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang. Thirdly, that there is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the Purchasing Managers Index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that China’s economy is in recession. Fourthly, that the regime’s officially published GDP of 9 percent is also fabricated. According to Lang’s data, China’s GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in infrastructure construction, including real estate development, railways, and highways each year (accounting for up to 70 percent of GDP in 2010). Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 51.6 percent, Lang said. Once the “economic tsunami” starts, the regime will lose credibility and China will become the poorest country in the world, Lang said. Several commentators have expressed broad agreement with Lang’s analysis.
Ed Webb

Uneasy Engagement - China Spreads Aid in Africa, With a Catch - Series - NYTimes.com - 0 views

www.nytimes.com/...22namibia.html

China Africa aid development corruption

shared by Ed Webb on 22 Sep 09 - No Cached
  • From Pakistan to Angola to Kyrgyzstan, China is using its enormous pool of foreign currency savings to cement diplomatic alliances, secure access to natural resources and drum up business for its flagship companies. Foreign aid — typically cut-rate loans, sometimes bundled with more commercial lines of credit — is central to this effort.
  • Leaders of developing nations have embraced China’s sales pitch of easy credit, without Western-style demands for political or economic reform, for a host of unmet needs. The results can be clearly seen in new roads, power plants, and telecommunications networks across the African continent — more than 200 projects since 2001, many financed with preferential loans from the Chinese government’s Exim Bank.
  • “We know more about China’s military expenditures than we do about its foreign aid,” said David Shambaugh, an author and China scholar at George Washington University. “Foreign aid really is a glaring contradiction to the broader trend of China’s adherence to international norms. It is so strikingly opaque it really makes one wonder what they are trying to hide.”
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  • China, which is not a member of the O.E.C.D., is operating under rules that the West has largely abandoned. It mixes aid and business in secret government-to-government agreements. It requires that foreign aid contracts be awarded to Chinese contractors it picks through a closed-door bidding process in Beijing. Its attempts to prevent corrupt practices by its companies overseas appear weak.
Ed Webb

Learn from Copenhagen's failure | openDemocracy - 2 views

www.opendemocracy.net/...learn-from-copenhagens-failure

IR copenhagen climate governance negotiations diplomacy institutions

shared by Ed Webb on 28 Dec 09 - Cached
  • Copenhagen as the last serious attempt to use 20th century techniques to arrange our 21st century affairs. Seeking consensus between 193 sovereign states through a zero-sum negotiation process was always going to be a fool’s errand. It failed because it handed exclusive rights to national governments, leaving 99% of the energy of business, civil society, cities, and the youth (just to same a few) as frustrated bystanders
  • It has failed because our global commons can no longer be managed by top-down, government-led, compliance focused, publicly-funded agreements between nations.
  • Reforming global governance has been an esoteric topic for many years pursued by policy analysts, academics and international bureaucrats offering unintelligible diagnostics and incremental and largely technocratic recommendations. Copenhagen, and its potentially ghastly implications, makes this obscurity unacceptable. In the last two decades we have in fact already invented far more effective ways to do business internationally, from how we do global health through public private partnerships to building the hadron collider in CERN (it works now, but the amazing thing about it is how the global scientific and political community made it happen, not merely that it is ‘about the origins of everything’). We do not need another Commission made up of those who have presided over our failing global institutions, we need fresh blood and urgency in surfacing today’s institutional innovations and working out how to make these work in practice.
Ed Webb

Is Abdulla Yameen Handing Over the Maldives to China? - Foreign Policy - 0 views

foreignpolicy.com/...ing-over-the-maldives-to-china

Maldives China India US Japan beltandroad marine trade investment infrastructure

shared by Ed Webb on 02 Apr 18 - No Cached
  • China has emerged in recent years, because of its economic ascent, as a neocolonial practitioner of predatory economics, which is sparking a new Great Game in the Indo-Pacific. In the words of former Maldivian Foreign Minister Ahmed Naseem, “What is happening in the Maldives is not just about democracy, it is about peace, security, and stability in the entire Indian Ocean neighborhood.”
  • India has played a major role in helping build the Maldivian economy, as well as in underwriting political stability in the country. India backed the authoritarian President Maumoon Abdul Gayoom for several decades, even sending troops to preempt a 1988 military coup attempt
  • As has been the case in Pakistan, Sri Lanka, and elsewhere, an increasingly powerful and assertive China is melding its Belt and Road Initiative with its global maritime ambitions, throwing cash around to create dependent client states, and brazenly challenging India on New Delhi’s home turf, the Indian Ocean
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  • before 2012, Beijing didn’t even have an embassy in the Maldivian capital of Malé, given the smidgeon of diplomatic importance it assigned to the small atoll. Yet today, the country is awash with Chinese tourists, as well as large streams of Chinese foreign investment
  • $830 million upgrade of the airport, including a 1.3-mile bridge to link the airport island with the capital, which is a $400 million project
  • geo-economic clout
  • China has signed a free trade agreement with the Maldives and has “leased the uninhabited island Feydhoo Finolhu for tourism use for 50 years,”
  • 70 percent of the total Maldivian debt, and $92 million a year in payments to China, roughly 10 percent of the entire budget
  • “debt-for-leverage model is based on providing Chinese financial support for infrastructure projects in exchange for access to the natural resources of the beneficiary nation,”
  • hard economic power
  • often Belt and Road projects do not always serve economic but rather geo-strategic, grand motives
  • In Pakistan, Sri Lanka, and the Maldives, the Chinese have been busy building ports, which they say are only for civilian use. While it is premature to see a conspiratorial chain of Chinese military facilities, it is also difficult to conclude that they are unrelated to Chinese maritime ambitions
  • a state of emergency and arrest Supreme Court judges last month after they ruled for the release of opposition politicians
  • Yameen’s actions have also drawn ire from India, the traditional peacekeeper in the region, though it has yet to take any direct action in the country, despite former President Mohamed Nasheed’s call for Indian troops to help stabilize the conflict-wracked island
  • Japanese charges — complete with a video — that Maldivian tankers have been secretly transferring goods to North Korean-flagged ships in grotesque violation of U.N. Security Council sanctions
Ed Webb

Mining the Future - Foreign Policy - 0 views

foreignpolicy.com/...china-critical-minerals-metals

China US Africa SouthAfrica trade mining economy technology future strategy

shared by Ed Webb on 11 Jul 19 - No Cached
  • No new phone, tablet, car, or satellite transferring your data at lightning speed can be made without certain minerals and metals that are buried in a surprisingly small number of countries, and for which few commonly found substitutes are available. Operating in niche markets with limited transparency and often in politically unstable countries, Chinese firms have locked up supplies of these minerals and metals with a combination of state-directed investment and state-backed capital, making long-term strategic plays, sometimes at a loss
  • unprecedented concentration of market power
  • “Made in China 2025,” aims to build strategic industries in national defense, science, and technology. To meet these objectives, in October 2016, the Ministry of Industry and Information Technology announced an action plan for its metals industry to achieve world-power status: By deploying state-owned enterprises and private firms to resource-rich hot spots around the globe, China would develop and secure other countries’ mineral reserves—including minerals in which China already holds a dominant position
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  • By directly acquiring mines, accumulating equity stakes in natural-resource companies, making long-term agreements to buy mines’ current or future production (known as “off-take agreements”), and investing in new projects under development, Chinese firms traded much-needed capital for outright control or influence over large shares of the global production of these resources. Despite China’s slowing growth and a major pullback in its foreign direct investment in other sectors, the government has maintained robust financial support for resource acquisition; mergers and acquisitions in metals and chemicals hit a record high in 2018.
  • China lacks significant reserves of three resources vital to its tech ambitions: cobalt, platinum-group metals, and lithium. It has successfully employed two strategies to secure control of them. One is driven by China’s state-owned enterprises (SOEs), which use development finance and infrastructure investment to embed themselves in higher-risk countries, establishing close ties with government leaders. The second is investment by state-linked private firms in market-based economies. Both strategies have shown agility and an ability to effectively adapt to local circumstances to achieve the same end.
  • Chile is home to 57 percent of the world’s known lithium reserves, the world’s largest known concentration, and SQM controls roughly half the country’s production
  • DRC is home to nearly two-thirds of the world’s cobalt production and half of its known reserves. Those resources are the prime target of investors for the booming battery industry. Over a decade of steady engagement, China has staked out a dominant position by developing strong political ties and investing in production assets and related infrastructure
  • China’s SOEs and private firms have made at least eight major equity and off-take plays in platinum-group metals in the Bushveld Complex. Such investments in South Africa’s highly concentrated and strategic resource deposits have helped make metals the country’s leading source of export growth, with nearly 50 percent of its metal exports going to China—tying South Africa’s economic welfare directly to Chinese investment.
  • the three countries where nearly 90 percent of global lithium production and more than three-quarters of the world’s known lithium reserves are located: Chile, Argentina, and Australia. In just six years, China has come to dominate the global market: More than 59 percent of the world’s lithium resources are now under its control or influence
  • China now owns or has influence over half of the DRC’s cobalt production, and has a massive stake in its mining industry. Six months ahead of the presidential elections, the event also sent a strong message to candidates about China’s deep investment in copper and cobalt mining—which constitutes 80 percent of the DRC’s export revenue and thousands of jobs—and its capacity to influence the future of the DRC’s economy
  • Natural resources are abundant in China; it is the No. 1 producer and processor of at least ten critical minerals and metals that are essential to high-tech industries and upon which China’s commercial and strategic competitors depend. To reinforce its strength, Chinese firms are acquiring mines and output from the next-largest producers and reserves, giving China both an economic edge in the next high-tech industrial revolution and increasing geopolitical power.
  • In a cash-strapped industry, Chinese firms are financing mine expansion and new development in exchange for a guaranteed supply of lithium in both mature and emerging markets. In Argentina, where President Mauricio Macri is eliminating mineral export taxes, reducing corporate tax rates, and allowing profit repatriation, China is establishing a dominant position in the nascent sector with “streaming deals,” which provide development capital in exchange for future lithium yields to help projects get off the ground. Chinese firms, led by Ganfeng, have stakes in 41 percent of the country’s major planned projects that account for 37 percent of Argentina’s reserves. This raw-material strategy is already coming to fruition: Lithium export volumes from Argentina to China rose nearly fourfold from 2015 to 2017, and China has secured access to the country's lithium for the longer term.
  • This same strategy, combined with asset acquisition, has also been successful in Australia, whose proximity to China, significant lithium reserves, and broad political support for mining investment have attracted Chinese investment. Tianqi and Ganfeng have established stakes in 91 percent of the lithium mining projects underway and 75 percent of the country’s reserves, including some of the world’s largest.
  • Though the final agreement included restrictions on Tianqi’s board and committee participation and its access to SQM’s sensitive data, Tianqi’s equity position still confers considerable influence over SQM.
  • Perhaps the best-known example both of China’s natural-resource dominance and its willingness to exploit it is rare-earth elements, a group of 17 elements that (despite their name) are commonly found, but rarely in concentrations that can be economically extracted. They are important materials for the defense, aerospace, electronics, and renewable energy industries. Over the past two decades China has produced more than 80 percent of the world’s production of rare-earth elements and processed chemicals. In 2010 it cut off exports to Japan amid rising tensions over the East China Sea, and the following year it imposed export quotas that threw governments and manufacturers into a panic. But with the exception of Japan, the attention to this critical vulnerability was short-lived, and little action was taken by other countries reliant on imports to diversify their resources or develop minerals action plans of their own.
  • China declared rare-earth elements a strategic resource in 1990 and prohibited foreign investment in the sector. Six state-owned enterprises control the industry, and the government cut production quotas in 2018 by 36 percent. With global demand for rare-earth elements projected at a compound average growth rate of more than 17 percent to 2025, a supply crunch is likely approaching—and China is already securing other nations’ supplies
  • While Russia strictly limits foreign participation in rare-earth element development, Chinese firms have accumulated off-take agreements and stakes in rare-earth element mines in Australia and Brazil
  • in 2017, China’s Shenghe Resources and two U.S. private equity firms acquired the sole U.S. and North American rare-earth element producer and processor, Molycorp, and its idled mining operations at Mountain Pass, California.
  • In 2016, China’s Yellow Dragon Holdings Ltd. co-invested with Bushveld Minerals, the primary vanadium developer in South Africa’s massive Bushveld Complex, to acquire Strategic Minerals, which owned the Vametco vanadium mine and plant. Yellow Dragon subsequently increased its investment in Bushveld Minerals and has become the fifth-largest shareholder. The holdings deepen China’s influence over South Africa’s vanadium resources and its role in the country’s emerging high-tech sector
  • China’s position is even stronger in graphite, a crystalline form of the element carbon whose high conductivity makes it a major component in electrodes, batteries, and solar panels, as well as industrial products such as steel and composites. For the last 20 years, China has been the leading global supplier of graphite, representing nearly 70 percent of the world’s production in 2018 and 24 percent of its reserves. While synthetic graphite, which is produced from petroleum coke, is an alternative, unfavorable economics constrain its use
  • New projects are concentrated in Mozambique, where the world’s largest graphite mine and fourth-largest known reserves are located. Already, Chinese firms have secured off-take agreements with the three major developers in Mozambique for the majority of their graphite production, and they are financing new development.
  • Japan is 90 percent reliant on China for its graphite
  • This resource consolidation could determine whether China is able to overcome the last major hurdle to achieving its ambitions: a competitive semiconductor industry.
  • Semiconductors can be pure elements or compounds and altered with impurities to improve their conductivity. Several materials are now being used to improve speed and performance, including rare-earth elements, graphite, indium, gallium, tantalum, and cadmium. China is the dominant producer of five out of the six, controls more than 75 percent of the world’s supply of three, and is consolidating control over them all
  • Should China succeed technologically, its capacity to scale production and flood markets (as it has already done with solar panels and wind turbines) has serious implications not only for leading semiconductor producers, but also for national security, if Chinese-manufactured chips are embedded in the devices upon which our data-driven lives, our economies, and our defense systems increasingly depend. While government and industry officials have started to restrict semiconductor sales and scrutinize Chinese acquisition of technology firms—e.g., the United States’ temporary ban on selling semiconductors to ZTE, or the recent flare-up over Huawei —such moves are strengthening China’s resolve to develop its domestic industry. More attention should be paid to its efforts to consolidate critical raw materials and the computing power they confer.
  • In April, U.S. government officials announced plans to meet with lithium industry leaders and automakers with the intention of developing a national electric-vehicle supply chain strategy. It is a start.
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