12

“The Chinese central government stockpiling minerals is one potential indicator that it may be preparing to invade Taiwan,” ​Gregory Wischer of Dei Gratia Minerals told the Commission in a prepared statement.

Wischer went on to say that China’s stockpile, managed by China’s National Food and Strategic Reserves Administration, is in charge of managing the “large volumes of minerals like aluminum, cobalt, and copper” that China is amassing, presumably “for strategic reasons.”

Stockpiling is a measure to not only overcome production shortages of various resources, but to also bypass troubles with sourcing and purchasing those resources should a nation fall into international disfavor, as China certainly would with much of the world should they attempt a military takeover of Taiwan.

https://thediplomat.com/2024/06/why-is-china-stockpiling-key-resources/

Is there any other reason to stockpile minerals aside preparing for war? China has been stockpiling minerals, which is a potential indicator that it may be preparing to invade Taiwan. Is there any other reason for stockpiling resources? Did China stockpile minerals in the past for another reason than preparing for war? The article suggests China might be doing this to look big, but I am not sure they have much to gain from doing this.

1
  • You seem to be conflating “preparing for war” and “preparing to launch a war of aggression”. That's not the same thing. For example, many countries are stockpiling oil and petroleum products, not because they are preparing to invade their neighbors but to shield against disruption to the global oil trade, including disruption following a war between some other unrelated countries.
    – Relaxed
    Commented Jul 1 at 21:41

2 Answers 2

31

Is there any other reason to stockpile minerals aside preparing for war?

Yes, there are many other potential reasons, assuming we are defining war in the traditional battleship and bomb-dropping way.

One reason is to promote price stability and reduce the economic risk from price fluctuations. With active management of large stockpiles, the state can absorb slack in the market when necessary, and release stock to alleviate shortage when necessary - typically profiting in the process.

The American state currently does this with the strategic petroleum reserve, for example, and historically it has been quite normal for manufacturing nations to hold large stockpiles of raw materials.

The state can also use its potentially unlimited resources to force private speculators from the market (who might otherwise seek the same profits to supplement their private wealth, rather than the profits accruing to the public purse) and prevent the manipulations of market price which large speculators often seek to create.

A second reason, similar but not quite the same as the first, is to insulate certain large-scale, skilled-labour- and capital-intensive industries from physical supply disruptions and to preserve the reliance value which the broader economy has on the output of certain kinds of core industry.

Facilities like a steel blast furnace can be physically damaged by running out of supply, or there can be large transition/overhaul costs when things are switched off and on, or large costs for workforces that sit idle. And if downstream consumers never know when steel will be available or not, that causes them to require stockpiles (especially if they too are intensive with skilled labour and capital), price-in disruption risks, or causes wild instability in output prices.

A third reason is to deprive a foreign nation of sanction and hold-up power. This potentially avoids war, since the need to seize or protect the supply of raw materials is often a cause of traditional war when an adversary seeks to manipulate the supply for violent or coercive purposes.

4
  • I think the last paragraph can be used to avoid or facilitate war. In general it probably depends on the size of the reserve. How big are China's current mineral reserves compared to annual consumption and compared to reserves of other countries. In comparison the US petroleum reserve is like a year worth of consumption I think and the amount used to stabilize the market is only a small fraction of it. It's really thought as an emergency reserve with oil being more essential than some minerals maybe. Commented Jun 29 at 6:54
  • 12
    @NoDataDumpNoContribution, I don't think anyone is denying that stockpiling is useful for war, the question asked whether there were reasons other than preparing for war. The point is that it is also useful under peace to have stable prices and steady supply. China says it is reacting to new uncertainties in the world, and top of those uncertainties is likely the prospect of the sanction-happy West seeking to coerce China with sanctions for one reason or another. China does not necessarily need to anticipate and be preparing for traditional war, it can just be preparing for sanctions.
    – Steve
    Commented Jun 29 at 7:34
  • @NoDataDumpNoContribution The US petroleum reserve is nowhere near a years worth. Wikipedia (en.wikipedia.org/wiki/…) gives a figure of 17 days of consumption.
    – quarague
    Commented Jul 1 at 7:33
  • 2
    For an example of a stockpiled good without any possible military use, there is always Quebec's Strategic maple syrup reserve.
    – mlk
    Commented Jul 1 at 10:06
10

Economic sovereignty.

A nation is only as sovereign, in economic terms, as the percentage of its supply chain that it controls. Otherwise, it's at the mercy of its upstream and downstream partners, and in extreme cases of dependency, a de-facto vassal state.

Stockpiling isn't a replacement for supply chain control, but it's a way to mitigate disruptions, provide yourself time and back-up. War is only the most extreme of common supply disruptions; import/export tariffs and quotas are a much more common case. At this time, China is already subject to partial embargoes regarding high-tech hardware.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .