Lord Elton
To ask Her Majesty’s Government what view they take of the increasing acquisition by China of rights and access to mineral and other national resources in Africa and South America.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, the United Kingdom Government welcome increased foreign investment across Africa and South America, including investment from Chinese companies. The Government are working with African and South American countries to ensure that they secure the maximum possible social and economic benefits from resource extraction—for example, through direct support for and promotion of the extractive industries transparency initiative and the natural resource charter.
Lord Elton
My Lords, given that Chinese nationals comprise not quite 20% of the world population and are 20 times as numerous as our own population, their ambitions and intentions are of immense importance to all of us. Does my noble friend consider their motives to be basically imperial, colonial or commercial?
Lord Howell of Guildford
My Lords, the motives behind the enormous expansion of Chinese investment across the whole globe—not just in Asia, Africa and South America—are mixed. In some cases the motives are purely commercial. At the head of the list, I think, one would put the Chinese authorities’ desire to acquire access to resources—minerals and particularly hydrocarbons—around the world to meet their enormous and very rapidly growing needs. There are also some direct concerns in investment to promote the welfare of the recipient countries. The British Government have in fact signed a memorandum of understanding with the Chinese Government on poverty reduction in the low-income countries. This is one of many dialogues that we conduct all the time with the Chinese on these matters.
Lord Anderson of Swansea
What assessment have our own strategic planners and those of our allies made of the dangers of China over a longer term gaining such a monopoly of scarce mineral resources that it will be in a position to manipulate prices and possibly to manipulate other users of those scarce materials?
Lord Howell of Guildford
Of course, these dangers of monopoly control exist in all extractive industries, particularly for scarce resources. We have to watch those matters very carefully. What might be behind the noble Lord’s question is the issue of rare earths, the use of which is essential in practically every mobile telephone and the production of which was very much under Chinese control until recently. However, any attempt to limit the export of rare earths and thereby to manipulate price has been met by the discovery and development of rare earths elsewhere. Therefore, provided that we watch these matters carefully, competition can usually weaken the monopolies. I am not saying that it is a Chinese aim to monopolise these resources, but in the case of rare earths that was a danger.
Lord Ashdown of Norton-sub-Hamdon
My Lords, does my noble friend agree that this country is hardly in the best historical position to lecture others about the morality of taking raw materials from Africa? In so far as we did so, if we had a policy in this area it might be better directed to advising others not to do it as we did it in the last century.
Lord Howell of Guildford
I think we all agree that we do not want to go around lecturing and hectoring, but we have our own values, we have had our own experience, and we have made our own errors in the past. It is possible that by sharing our values and not reneging on them in any way we can help other countries avoid some of the mistakes that we made. I do not think that there is anything much to apologise for in working with other countries to ensure that today’s and tomorrow’s standards for the extractive industries are developed and maintained. I believe that this is a matter that the Chinese Government, as a responsible member of the World Trade Organisation, fully recognise.
Lord Lawson of Blaby
My Lords, is it not clear that the Chinese would not be spending vast amounts of money and a large amount of political capital in getting hold of hydrocarbon resources—in sub-Saharan Africa in particular—if they did not intend to use them? Given that, is it not clear that no global decarbonisation agreement is possible? Since it is not, is it not quixotic, to say the least, that the British Government should be forcing British industry and British consumers, particularly poor consumers, to have more expensive energy in the name of unilateral decarbonisation, which is completely pointless if there is no global agreement?
Lord Howell of Guildford
Well, it is not quite pointless. As my noble friend knows well, China, although reluctant to commit itself to legal binding global agreements for which some others have argued, is in fact investing enormous amounts in decarbonisation and low-carbon technologies. It is working very closely with the United Kingdom and our technologies and developing in those areas. All these are very valuable moves forward in the decarbonisation movement and, one hopes, effective moves worldwide against climate violence in the future. I think there is value in this.
The pursuit of international global targets that are legally binding is going to be a very uphill task in relation not merely to China but to other countries as well. The general message coming to us from Beijing and the vast Chinese industrial machine is that they are well on the path to low-carbon technologies, and we are going to work with them on that.
Baroness Symons of Vernham Dean
My Lords, I draw attention to my declaration in the register of interests. Is it not true that these are largely state-sponsored Chinese acquisitions? They very often come with promises of collateral benefits for the growth of infrastructure in the countries concerned, such as railways and roads. Have the Government done any assessment of the level of delivery from the Chinese on these collateral benefits? There is evidence that much is promised that will go along with access to these mineral resources, and very often not much is delivered. Would the Minister initiate looking at the evidence for what is really the benefit to the country concerned?
Lord Howell of Guildford
We follow these things very closely. The noble Baroness is entirely right that in some cases the benefits have disadvantages attached to them. I am not talking so much about their failing to deliver fantastic new developments in sports stadia, schools, railways, government offices and so on, although that certainly happens. In other areas, the benefit for local people turns out to be non-existent because labour is just imported from China and taken away again. There are lessons to be learnt by our Chinese friends, which, again, we can possibly help with, on the basis of our own experience in the past, as to how to conduct operations that bring real benefit to local people and do not just leave them feeling that they have been ripped off.