China is the most important emerging global power, a major operator in natural resource extraction around the world and a large country with major land and forest assets. The country’s supply of natural resources is seen as a key element in the drive for sustaining economic growth and long-term security.
At the international level, China is crucial to efforts to prevent the extraction and trade of natural resources from contributing to corruption, instability and violent conflict. Improved governance of oil, mining and timber resources, including in those countries where Chinese companies have investments, should reinforce rather than undermine the Chinese government’s interest in ‘harmonious development’ and ‘peaceful coexistence’.
Whether or not Chinese investment will be a force for positive change overseas will be determined by the investment practices and standards that Chinese firms and their local partners follow.
Resource-linked conflicts not only lead to widespread human suffering and social unrest. They are also detrimental to commercial investments in the long term and are a threat to secure resource supplies. For nearly 20 years, Global Witness has conducted research on the funding of armed groups through the trade in minerals, timber and oil in violent conflicts around the world. We have been behind major international policy reforms and mechanisms to tackle the problem, including the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
Many countries rich in natural resources are mired in poverty because of corruption and mismanagement of these resources. We believe that better disclosure and management of revenues paid to governments in resource-exporting countries by companies can deter corruption, minimise investment risk and ensure that these funds are used in the long-term interests of these countries and their citizens.
Resource-for-infrastructure deals are an important means of investment for Chinese companies overseas and represent a significant new development model for the world. Global Witness research has shown that improved transparency surrounding such deals could be “win-win” for Chinese investors and host populations alike.
Forests, land and other environmental resources maintain our planet’s vital life support system and the livelihoods of billions of people. Tropical forests are particularly important for mitigating climate change. Global Witness is working to put in place good governance mechanisms for these natural resources that maintain vital ecological functions and promote economic development. We are keen to explore synergies with Chinese institutions based on this approach to tropical forest management and land-related investments.
As demand for commodities, especially food, fuel and fibre, grows, we see more competition for land, including forested land, upon which millions depend directly for their livelihoods. With our historical insights into managing natural resources, Global Witness has identified how transparency can be improved within the decision-making process around large-scale land allocations.