Will China take the rest of the world out of poverty?

Will China take the rest of the world out of poverty?

Part 1.

By TUBS [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons

            According to the U.S. Energy Information Administration, China's largest oil fields, upon which they have been relying since the 1960's, have reached peak production in the past few years.  Anticipating the fact that these mature fields will be unable to support the rapid increase in oil demand, China has been increasingly importing its oil from abroad.  Crude imports now account for over half of China's annual oil consumption.  As of 2009, China is the second-largest importer of oil, trailing only the United States. 

            Securing oil from abroad has proven to be relatively easy for the Chinese, especially with their implementation of the so-called oil-for-loan deals, which have been made with Ghana, Angola, Bolivia, Ecuador, Venezuela, Kazakhstan, and others.  These deals essentially trade oil for access to Chinese investment dollars.

            Another method of accessing imported oil is through pipelines, which China currently uses to get oil from Russia and Kazakhstan, and will in the near future through Burma.  These pipeline projects require international teams and vast investment capital to complete, and create an entire infrastructure around them in order to be maintained into the future.

            Given the vast amounts of capital delivered through the oil-for-loan deals and pipeline construction projects, many nations stand to profit a great deal from China's incredible rise to economic dominance.  Because of Chinese investment dollars, it is now possible for third world countries to build an infrastructure capable of sustaining long term development which, in theory, would take them out of poverty and into the 1st world. 

            While China certainly benefits from the increases in oil imports from abroad, the countries doing the importing stand to gain quite a bit themselves, if they handle the investment capital carefully, and ensure that is their workers, and not the Chinese, who are being educated to work in the developing industries.  For if all of the majority stake holders and all of the skilled laborers within the developing industries within a country are of Chinese background, that country stands to lose its status as autonomous, and instead becomes a true puppet. 

            Part two, soon to follow, will discuss how a country should properly use Chinese investment capital to guarantee its future success.

Zachary James