The Chinese Resource Quest: Adapting to Regulations

The Motley Fool's energy bureau chief, Joel South, spoke with Michael Levi about his new book, By All Means Necessary: How China's Resource Quest Is Changing the World, coauthored with Elizabeth Economy. As the David M. Rubenstein senior fellow for energy and environment at the Council on Foreign Relations, Levi is no stranger to the impact that countries and their decisions have on the rest of the world. In fact, Levi also writes a blog for the CFR, Energy, Security, and Climate, where he discusses the relationship between energy, the world, and its inhabitants. In By All Means Necessary, Levi analyzes the impacts and effects China's resource hunt has on the world and international affairs, specifically looking at the synthesis of economics, security, and politics.

In the sixth part of this 10-part interview, Joel South asks Michael Levi about the impacts of Chinese companies expanding into other countries with differing rules and regulations. Levi explores how enforced rules have affected Chinese companies and China in total.

A transcript follows the video.

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Joel South: Another question that I found pretty interesting, that I didn't really think about too much before reading the book, was thinking of how China is going to have to adapt to the countries that they're moving into -- specifically looking at the environmental and social issues that they'll have to adapt to. Do you see them moving into other countries and starting to take some of these environmental issues and bringing them back home? Or is it just only meeting the minimums in the countries that they're in?

Michael Levi: We still don't see China raising the bar in the countries where it plays, but it's increasingly able to at least meet the bar that's established.

That's partly because countries are making a point of enforcing their rules. It's partly because the Chinese want to be seen as responsible because they're trying to invest in advanced markets that care about these things more, like Canada or Australia or the United States.

It's partly because, over time, an infrastructure of consultants and managers and others who can help them perform better is emerging. So while the demand for high performance is increasing, the supply of tools with which to perform successfully is also growing, and that matters, too.

You can make all the demands you want, but if companies aren't able to meet them, that doesn't matter.

South: With Chinese companies and the country itself wanting to be seen as a high performer, are you seeing a lot of these issues being addressed at home? Or is it still quite a ways off before they start ...?

Levi: That's a good question, and the domestic politics are tricky. One of the joys of writing this book is I collaborated with a colleague who's an authority on Chinese domestic policies, and their relationship with Chinese foreign policy.

That's a long way of saying that I don't have the answer to that particular question.


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