China is strategically positioning itself as the real superpower.  Many economists, pundits, and news media outlets would like to reduce China to an over-crowded, communist country with a one-child policy, and a pollution problem.  However, China has been meticulously calculative  and shrewd in their foreign affairs.

 America boasts about being the most mightiest nation on earth. However, we are faltering and requiring continuous infusions of dollars from the Federal Reserve to preserve economic stability.We’re struggling with a $17 trillion debt. We spend billions upon billions of dollars on defense, war, and national security. We’ve seen how Greece and other nations in Europe are struggling with austerity, and the crippling ripples of economic imbalance.  However, China has managed to stay above the monetary carnage, and remain independent of World Bank welfare.

China and Oil Trade

First, according to a New York Times article, China purchases approximately 1.5 million barrels of oil a day from Iraq.  The Chinese government is reportedly investing $2 billion dollars a year into Iraq.  They have constructed their own airport in the desert that borders Iraq and Iran.  The Chinese government uses the airport to fly their own oil workers into Iraq, and they are developing direct flights into Baghdad from Shanghai and Beijing.  The article even explains how China has trained their workers to speak Arabic with an Iraqi accent!  The U.S. eliminated Sadaam, but China really benefited.  Iraq is the 2nd biggest oil producer after the Saudis, according to OPEC.  This is beneficial to Iraq because they use oil revenue to fund military and other governmental operations.

China and the Rare Earth Metal Market

Many nations (including America) use rare earth metals and oxides like Neodymium, Praseodynium, and 15 other rare earth metals in that class to build your favorite iPhones, computers, tablets, and even our very own missile defense system.  Well, China controls 95% of the global trade of these rare earth metals.  This dynamic is not necessarily due to their economic acumen, but because most of these metals are geographically located in China!

However, China is aware of the need and demand for these metals in modern technology, and put an export quota on these precious minerals. This drove the stock prices soaring through the roof.  One of the major Chinese rare earth companies, China Nonferrous Metal Industry’s Foreign Engineering and Construction Company, is even building a new plant to increase production of the metals. This new plant is primed to produce ~7,000 tons of the metals per year. Their only real competition is an Australian company named the Lynas Corporation.  The demand is high as China has pumped out ~ 31,000 tons in one year.  Apple should keep relations nice and cozy!

China and South America’s Emerging Economy

China is also heavily invested in South America.  The Southern Pacific Review published an article this October.  The author, Walker Rowe, stated that Chile is looking for foreign investors, and has invited a Shanghai investment banking company to attend their International Investment Forum Chile 2014, which is scheduled for January 13-16 in 2014.  He reports that China already has 3 mining companies in Chile ( Jia He Wei Ye, Golden Resource, Sky Solar), and the National Development Bank of China is involved.  Moreover, Chile lacks the natural resources of oil, natural gas and coal on a sustainable scale.  China has already worked out plans to develop solar power for Chile.  According to the article, “Sky Solar is set to operate 75,600 solar panels over 42 hectares of desert”.  To put the cherry on top of the sweet deal, Chile signed a free trade agreement with China that exempts 97% of goods from import tariffs!!!

In Argentina, Lenovo (Chinese technology manufacturer) has partnered with an Argentinian based company named Newsan, in a tax-free locale called Tierra del Fuego, and are building computers, tablets, and other electronic devices.

The Aluminum Corporation of China has setup their copper mining operations in Toromocho, Peru. Brazil has allowed two Chinese car manufacturers (JAC and Chery) to build plants there.  They’re projecting to build at least 100,000 cars per year, per company.  Ecuador has reportedly signed a $1.4 billion dollar agreement with China’s ECSA mining company to operate its’ El Mirador copper mine. Bolivia has agreed to let China’s CITIC Guoan Group conduct research into Bolivia’s lithium and potassium reserves.  This is huge potential for the lithium ion battery market. The article stated that Bolivia has 10,582 square kilometers of salt flats, and that’s where the lithium reserves are located.

China and America

China has already taken over Detroit.  An article in Forbes Magazine by Gordon Chang describes how Chinese investors are purchasing property in bulk, by the hundreds.  The Dongdu International Group of Shanghai has already purchased the David Scott, and Detroit Free Press Buildings for $9.4 million in a September auction.  Over the past few decades there has been an influx of products that are stamped with  “Made in China”.  These products include various technologies, home furnishings, entertainment consoles, and yes the Nike Airs that teenagers die over.

Unfortunately, China is aware of America’s financial status and has repeatedly vocalized trade concerns over the growing impotency of the American Dollar, and whether to even honor it.

China and Africa

Anybody that follows geopolitical events and economics, knows that Africa has become the global kiosk for natural resources.  I wont go in depth about this, I’ll encourage you to read an article I posted about Africa on BlackBlueDog.com

Conclusion

In conclusion, China does an amazing job at remaining neutral in global conflict.  This semi-congenial approach allows them to establish amicable rapports internationally to their economic benefit.  Their global posture permits them to conduct trade agreements with countries that have an aversion to U.S. foreign policy.  Where do you think we fit in this as African Americans?? America can take notes from China, ……and obviously, I should have asked Santa for the Mandarin edition of Rosetta Stone for Christmas. Peace!!