The largest energy consumer since 2010, the second largest consumer of oil since 2003, largest consumer of minerals, such as copper, nickel, iron ore, coal, lead, zinc and tin. These and other special world records belong to China, that, since its opening to the global market, has been leading the economic rise of Southeast Asia through its economic relationships with all ASEAN countries. As reported in this book, edited by J. Morris-Jung and titled “In China’s Backyard: Policies and Politics of Chinese Resource Investments in Southeast Asia”, the Chinese direct investments in ASEAN countries has risen from US$120 million in 2003 to US$6.3 billion in 2012, increasing the total presence of FDI in the region to 8% (p. 9).
The merit of this book is to clearly expose all positive and negative factors that characterize the economic relationship that entangle China with its neighboring countries – defined as zhoubianguojia(peripheral states) – and to the maritime Southeast Asia. This analysis is based on the assumption that China government and Chinese companies are not a monolithic block, but their relationship is rather based on a complex network, on which national and local SOEs play their role based on different strategies and agendas, and on which the same central state faces competition among different departments.
Through its 11 chapters, the book analyzes on a macro-regional scale, the impact of specific factors on SOEs’ strategy in accessing natural resources in ASEAN countries. The presence of a local authoritarian regime seems to be an ideal condition for Chinese firms to expand, while the local NGOs’ role can be more relevant in some countries (Myanmar and Vietnam) than in other contexts, such as Cambodia and Indonesia. Another element taken into consideration is the local perception and acceptance of Chinese companies, that varies from the displacement of Chinese small-scale mining firms, enabled by the historical presence of Chinese ethnic groups in the Philippines, to the anti-Chinese sentiment expressed by local communities in Northern and Central Myanmar. The value of this book is on exposing its contents through a double lens, on which both Chinese companies and local actors’ point of view find space.
In the first chapter “Mixed Motivations, Mixed Blessing: Strategies and Motivations for Chinese Energy and Mineral Investments in Southeast Asia”, written by Philip Andrews-Speed, MingdaQiu and Christopher Len, the focus is centered on the structure of energy and mineral companies in China, on their relationship with the central government, and on the motivations, that guide both national and private actors to investing overseas. To achieve this, the three authors use the Dunning’s framework, according to which, the Chinese companies’ investments are driven by four primary motivations – the search for new resources, the access to new markets, the improvement of their own’s efficiency, and the acquisition of technology and specific skills – and by three secondary reasons, namely, “to escape from restrictive policies and legislation of the home, to provide support for their affiliates or subsidiaries, and capital gains” (p. 32). A further tool – the Dunning’s “Ownership-Location-Internationalization (OLI)” Framework – has been used to understand the most favorable condition to the introduction of Chinese companies in Southeast Asia, among which there is the possibility, for Chinese firms, to acquire rights to the resource and the geographical proximity.
Hongyuan’s chapter “Mineral Resources in China’s Periphery Diplomacy” illustrates how China maintains its strategic relations with other Asian countries in order to ensure the access to 45 strategic minerals, 27 of which have been declared short in supply. According to Hongyuan, China’s dependence on overseas sources represents a certain vulnerability, and before planning an investment overseas, Chinese companies must take in consideration the nature of relation with a neighboring country – a “balanced“ economic alliance with youhao countries (Russia and Kazakhstan) or an “unbalanced” relation with the poorest countries in mainland Southeast Asia – the emerging of local resource nationalism and the external influence of powers like the United States.
Chapter four, written by Cecilia Han Springer and titled “Energy Entanglement: New Directions for the China-Indonesia Coal Relationship”, represents the first case study considered in this book, exposing in a clear way how the Chinese resource strategy in Indonesia has changed over time, shifting from a duopolistic entanglement – based on coal importation – to the Chinese companies’ interest in supporting the resource development in Indonesia. The reasons for this strategy of evolution are manifold. On the one hand, Indonesia decided in 2009 to limit their coal export in order to satisfy the growing energy demand, and on the other hand, China has to deal with the falling demand for coal, due to the air pollution crisis and the bad quality of Indonesian coal, mainly composed of lignite.
Hong and Tri Sambodo’s chapter, titled “Indonesia-China Energy and Mineral Ties: The Rise and Fall or Resource Nationalism?” focuses its attention on the resource management strategy operated by the Indonesian government during the last decade, showing that the impact of Chinese energy investments does not solely depend on China, but also on the recipient country’s domestic politics and regulatory system. The introduction of the Domestic Market Obligation policy has determined a sharp drop in gas and coal exports, whose quantity destined for the country is fixed respectively in 64% and 60% in 2019. The Mining Law of 2009 represents another key shift towards resource nationalism, introducing many restrictive rules for foreign companies. Despite all this, China has maintained its energy cooperation with Indonesia, being considered as an economic opportunity by 54% of Indonesian people.
Camba’s chapter “The Directions, Patterns, and Practices of Chinese Investments in Philippine Mining” gives an example of Chinese energy companies’ ability to fit into the Philippinean economic context, that includes Large-Scale Mining companies (LSM) and Artisanal Small-Scale Mining (ASM). LSMs are dominated by multinational mining, which build “[…] long-term fixed-capital mineral infrastructure, auxiliary roads and shipping routes, and cultivating ties with national government officials” (p.137). Chinese firms prefer to follow the ASM, both because the regulation limits the operations of mining companies and because the anti-Chinese sentiment, raised after territorial disputed in the South China Sea, has put Chinese companies in a bad light towards the central government. Another reason to prefer ASM is because establishing relations with local governments and hiring locals, ensures the loyalty of local communities to Chinese companies and allows for them to operate without intervention from the national government, taking advantage of the lack of coordination between national and local institutional actors. As Camba asserts, bypassing the Nation-state is possible thanks to the presence of the historical ethnic groups of Chinese mestizos and Taipans (p.145).
Chapter 7, written by Juliet Lu and titled “Development Cooperation with Chinese Characteristics: Opium replacement and Chinese Rubber Investments in Northern Laos”, examines the effects of the transposition of the Chinese economic model of rubber production, through the Opium Replacement Program (ORP) to the northern provinces of Laos, which lands were previously dedicated to the cultivation of opium. Rubber, introduced in Yunnan province after the stops of exportation from the U.S. to China in 1951, has represented a real “miracle of the science” for both people of southern China and northern Laos, becoming “a symbol of progress, and modernity in China” (p. 162). The ORP, despite the initial enthusiasm of Laos government, has shown all limits in this new context, at the same time raising many doubts about the real intentions of Chinese companies. In fact, the local communities face economic difficulties, due to the global drop in rubber prices in 2011, and in many cases the farmers are forced to sell their land with rubber plants to Chinese companies. Another bottleneck for rubber cultivation in Laos is represented by the control that ORP companies exercise over the rubber processing sector, with a consequent price control.
Pichnorak’s chapter, titled “The High Cost of Effective Sovereignity: Chinese Resource Access in Cambodia” is divided into three main parts. The first one analyzes the type of relationship between Cambodia and China, that has now become the major aid donor and investor in the country. Since 1954, China – according to Pichnorak – has established four kinds of assistance to Cambodia, consisting respectively in sustaining the People’s Party, investing in infrastructures, giving financial and technological support to the local police and the Royal Cambodia Armed Force and giving unconditioned aid to the country, without asking the respect of human rights of the local authorities. The second part examines the issues derived from projects contracted out to Chinese companies, such as the land concession – the 50% of land granted belong to Chinese firms – and the corruption that affects the economic system. The last part explores the effects derived from resource extraction in Cambodia – in particular the Kamchay Dam project – such as the water contamination, the negative impact on more than 350 species of animals and the relocation of many villagers. Actually, the activism is strongly repressed by local authorities, that receive financial sustain by the Chinese government.
In Chapter 9, titled “Complex Contestation of Chinese Energy and Resource Investments in Myanmar”, Diane Tang-Lee analyzes the case of energy projects contracted out to Chinese companies in Myanmar, that, despite the presence of an authoritarian political climate, did not find favorable conditions to develop their energy projects. The widespread anti-Chinese sentiment, due to the presence of Chinese immigrants and to the sustain that China gives to the central military junta, that tends to exacerbate ethno-political tension in the country. After the end of the military regime in 2011, NGOs have raised their strength, determining in some case the suspension of some projects (like the Myitsone Dam), but that are still not ready to communicate effectively with Chinese companies, contributing to maintain a climate of mutual suspicion.
Morris-Jung and Van Dim’s chapter, titled “Anti-Chinese Protest in Vietnam: Complex Conjunctures of Resource Governance, Geopolitics, and State-Society Deadlock”, shows how in some cases the protests can degenerate in violence, that in the case of Vietnam don not only represent a diffuse anti-Chinese sentiment, but also national weaknesses in resource governance and the lack of channels “for Vietnamese citizens to address their grievances and influence policies” (p. 231). Other concerns are the rising role in the region – with the fear of a Chinese invasion both by land and by sea – and the indirect control over mining companies by Chinese firms, through local enterprises that act as intermediaries.
The last chapter, written by Menandro S. Abanes and titled “Complexities of Chinese Involvement in Mining the Philippines” analyzes how the opposition to energy Chinese investments has raised after the territorial disputes in the South China Sea, and how Chinese companies continue to exploit the natural resources in the Philippines, despite the more restrictive rules adopted by the national government. According to the authors, the black market, where huge quantities of minerals are being sold, is driven by the corruption of local authorities and by the benefits that the majority of local communities receive from Chinese investments, with the hiring of many villagers. Despite this positive incidence on the local economy of some areas, civil society groups have gained more power, accusing Chinese firms of exploiting local communities and preventing their participation with the development agenda. Their role has been decisive for the stop of numerous controversial energy projects, such as that of Brooke’s Point and MacArtur Town sites.
