I am participating in an online discussion over at Cato Unbound on the headline question with economist Dambisa Moyo, author of Winner Take All: China's Race for Resources and What it Means for the World, Justin Logan, Cato's director of foreign policy studies, and Ian Bremmer, the president and founder of Eurasia Group. Each of us has contributed an essay addressing the issue and my essay—China Overpays: Still In Thrall to Failed Ideology of Central Planning—just went live.
Among other things, I point out that commodity prices have already fallen nearly 50 percent from their economic super-cycle peaks. I conclude:
Moyo makes the same mistake as China's leaders in taking the current super-cycle's recent run up in commodity prices sparked by China's own economic development as signaling permanent scarcities in natural resources. She is, however, surely right that in order to maintain power China's Communist Party leaders "must continually move the population to better living standards," or at least claim credit for doing so. But wasting money by overpaying for natural resources abroad instead of investing in productivity enhancing innovation and education at home will not achieve that goal. The Party leaders evidently are still in thrall to the failed ideology of economic central planning and the ultimate results of those policies will not be pretty.
All four of us will be responding to and discussing each other's arguments and insights for the rest of the month. Go here to read and comment on the discussion.