Is China’s Resource Strategy Changing Radically?

“China’s leading think tank has outlined a revamped energy strategy,” Xinhua reports today, highlighting a long article published yesterday in People’s Daily. This comes on the heels of a wonderfully titled FT article – “China scythes grain self-sufficiency policy” – claiming that China has given up on its long-standing goal of producing its own food. Chinese resource strategy, it seems, is changing rapidly and radically.

But is it really? In a new book published last week, my colleague Elizabeth Economy and I tackle the full sweep of China’s resource quest, from energy and minerals to food and land. By All Means Necessary: How China’s Resource Quest is Changing the World explores the roots of Chinese strategy and its consequences for trade, investment, governance, politics, and security. Two themes that bear on this week’s news emerge: Chinese strategy has deep roots at home that make change slow to unfold – but, as China pursues its resource quest, it is indeed learning and changing.

Take the article by Li Wei outlining a new energy strategy. The first thing to note is that this is just one view, albeit from a powerful perch, that feeds into the usual messy process of formulating policy. Western reporting too often assumes that any publication from a prominent government or government-connected Chinese official is effectively law. That’s wrong: China may not have the open politics that the United States does, but there’s still a lot of diversity within the ranks, and any changes that are advocated are sure to be fought over before they’re pursued.

The reporting on grain self sufficiency – which is about a new policy rather than a mere study – reflects the slow-to-change nature of Chinese strategy in another way. The actual changes the FT reports are far less revolutionary than the paper’s headline suggests. Chinese leaders appear to remain fixed on self-sufficiency in grain – a goal that, we show in the book, goes back hundreds of years – but are adjusting the way they define that. Is ninety-five percent self-sufficiency enough for security? Eighty-percent? Those are the sorts of evolutionary rather than revolutionary questions that Chinese leaders are grappling with as they confront the reality of feeding a billion people in the face of myriad pressures on Chinese land.

The new energy study reflects gradual Chinese change in another way. A decade ago one expected to see “going out” – investing in upstream energy resources abroad – at the heart of most prominent Chinese writing on energy strategy. But there’s essentially no mention of “going out” in the new paper published today. (I’m hedging my bets because I’m using Google Translate so can’t be completely sure; I’d welcome any pointers either way from people who read Chinese on whether there’s mention of outward upstream investment in the study.) Many Chinese strategists have learned over time that overseas upstream investment doesn’t result in security of Chinese energy supplies. This study isn’t the first to reflect that – and the evolved view isn’t universally shared – but it appears to be another piece of evidence that Chinese leaders are learning from experience and becoming more comfortable with markets.

Therein is perhaps the biggest lesson from the two reports. It’s the collision of two forces– the deep political, historical, and institutional roots of Chinese strategy at home, juxtaposed with the learning and evolution that happens through experience, good and bad – that has and will continue to shape Chinese resource strategy. Looking at just one while ignoring the other will invariably lead to a distorted view.