The New Imperialist: China to Buy Agricultural Land Abroad

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The great imperial struggles of the 1800s were over control of strategic or otherwise prized resources, and the hostilities they generated helped stoke World Wars I and II. Many believe the Iraq war was all about oil.

China is considering adopting a contemporary variant of the colonial model. A Ministry of Agriculture proposal suggests that rather than conquer territory to secure needed farmland, it could simply buy it up. But this path proves likes to engender resistance from the locals in countries with conquered occupied investee sites. This might work if done quietly, with local players acting as fronts. But this program will have to be very large scale to achieve its desired aims, which is improving food security, which makes keeping a low profile well nigh impossible.

And does China really think it can export food from large tracts of land abroad if the natives are hungry? There are major risks, such as governments asserting eminent domain to repatriate property and sabotage of transport.

China is concentrating its efforts on Africa and South America. In many areas, the control of the central government is weak. Will China wind up employing local mercenaries to secure its interests? It will be interesting to watch this initiative play out.

From the Financial Times:

Chinese companies will be encouraged to buy farmland abroad, particularly in Africa and South America, to help guarantee food security under a plan being considered by Beijing.

A proposal drafted by the Ministry of Agriculture would make supporting offshore land acquisition by domestic agricultural companies a central government policy. Beijing already has similar policies to boost offshore investment by state-owned banks, manufacturers and oil companies, but offshore agricultural investment has so far been limited to a few small projects.

If approved, the plan could face intense opposition abroad given surging global food prices and deforestation fears. However an official close to the deliberations said it was likely to be adopted…..

The move comes as oil-rich but food-poor countries in the Middle East and north Africa explore similar options….

China has about 40 per cent of the world’s farmers but just 9 per cent of the world’s arable land….China is still a net exporter of agricultural commodities but is increasingly reliant on soybean imports and is about to become a net buyer of corn…..

Some countries would find it particularly problematic if Beijing supported Chinese firms to use Chinese labour on land bought or rented abroad – common practice for most companies operating overseas.

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  1. don

    This is what has been termed neo-colonialism: not occupation and/or a puppet government, but capital penetration to get what’s wanted without getting one’s hands dirty.

    China, though, may find it difficult for reasons you state, especially in Latin America where the tradition of US colonialism is all to familiar to allow a new colonial power to emerge.

  2. Anonymous

    China could hardly consider it’s South American or African food supply secure when lacking sufficient naval power to actually secure it.

  3. donna

    Experts attempting to understand the strategic aims behind China’s aggressive military expansion have generally focused on Taiwan. But a new naval base points at Beijing’s significant and growing interest in projecting power into waters far from the Taiwan Strait. China, in fact, is equipping itself to assert its longstanding and expansive territorial claims in the South China Sea, and this plan could raise tensions well beyond the region.

    The new base is near Sanya, a city on the southern tip of Hainan Island. It’s an ideal place for a naval base, and a significant expansion compared to the nearby naval base in the port city of Yulin. Sanya features much larger piers for hosting a large fleet of surface warships, a new underground base for submarines and comfortable facilities that would attract technically proficient soldiers and sailors. Its location will allow China to exert greater dominance over disputed territories of the South China Sea; to place a much larger naval force closer to sea lanes crucial to Asia’s commercial lifeblood; and to exercise influence over the critical Straits of Malacca….

  4. S

    THe US has been very concerned with China sub development. China also has as rec ently reported an anti ship missle that the US can not defend against (whether that is US rhetoric or not is unknown). China string of pearls strategy and massive port in Pakistan are all part an parcel of the strategy. No doubt their ambitions ar bluw not brown.

  5. Lune

    IMHO, China is making the same strategic error that the U.S. has made with Iraq. If the Iraq war was about oil, it was a pretty stupid endeavor. We would have saved $500 billion (and counting), and kept oil prices lower by simply buying oil on the spot market, and investing in Iraqi oil infrastructure to increase their output (albeit at the cost of allowing Saddam Hussein to continue to rule).

    The problem with empire is that if it isn’t done right, the external costs of maintaining your hegemony outweigh the benefits of whatever resources you’re extracting. As you hinted at, Yves, how much will it cost to maintain large mercenary armies in poorly governed, war-torn areas like Africa to secure these large tracts of land? And how much bribing will need to be done to keep governments docile while their own people are starving?

    This is ultimately what happened to the Soviet Union: they created the Warsaw Pact countries as Soviet dominions, and treated them like colonies. But ultimately, the costs of suppressing independent streaks and developing local economies drained the Soviet Union of time, money, and attention, rather than contributing to its strength. What the Soviets had left was a consortium of weak states with crappy economies that needed constant support from the USSR. They ended up paying much more than they ever got from their allies.

    For an example of empire done right, the U.S.’s European and Japanese suzerainty is a much better model. We helped rebuild their economies without a heavy handed colonial approach, and in the end, we have strong allies who contribute to the U.S. economically (through trade), militarily (NATO, pacific treaties), and geopolitically (by aligning with and supporting our foreign policies).

    In the end, it is much easier and more fruitful to help develop a country, and then trade for its resources / products (i.e. the U.S. model), than to control a foreign govt and forcibly extract resources against the wishes of the local people (i.e. the Soviet model).

    China (and the U.S., these days…) seems to be pursuing the old Soviet model, to its ultimate detriment…

  6. a

    The Chinese need to get rid of their dollars for hard assets. Commodities are already bid up too high, and anyway need to be stored, so farmland (and timberland) is a logical alternative. It seems less about ensuring food supply than creating future flows of hard assets. Still, I think management expenses will eat into the return more than expected; they always do. And I think it’s more political risk (whether local governments will simply confiscate the land, once the Chinese build up too big a holding) than transportation risk which will ultimately work against the project.

  7. Richard Kline

    Buying the land is a bad play; it’s too visible, you’re tied to it, and too many people want it in the Third World. Buying the magnates and the politicians is a much better and more stable policy—but one that it doesn’t pay to advertise, no? After that, the magnate-politicians will act to protect their own stake and external relationships. It’s messy but flexible. China has shown talent for this. The US did once, but has been Ugly American and bigoted for sufficiently long we’ve lost our touch at ‘soft imperialism,’ a misnomer, but.

  8. Anonymous

    Buy land in a small low population country – ship in workers – to “get around the foreign worker issue” bribe the government officials to covertly grant citizenship to workers – (with careful timing flood the country with Chinese citizen-workers) take control of the government next election – become a Chinese protectorate.

  9. Anonymous

    Trying to enforce investments in South America could run into problems with the Monroe doctrine.

    Africa could be more malleable but it will ultimately just increase instability. Perhaps they actually believe those laughable stats of 30% HIV-infected and expect land to be freed up soonish?

    Perhaps China should invest in its backyard instead, ie Siberia. I’m sure that with global warming it should become an increasingly hospitable place for agriculture.

  10. "Cassandra"

    Few people realize that most US mid-western states (Iowa, for example) have some type of laws preventing foreigners owning or acquiring agricultural land, and if I am not mistaken, it extends to out-of-state people and certain types of corporations. In other words, you have to live there, to own it.

  11. James

    The Great Lakes are also governed by serious treaties. You’ll never be able touch that water ever.

  12. redsea85

    There will be a lot of legal barriers to owning land in foreign countries. In the Philippines for example, foreign nationals and corporations cannot own land and multinationals like Dole have to lease agricultural land from locals for their banana and pineapple plantations.

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