China is set to become increasingly aggressive in its drive to find natural resources, and now has the cash to do so, a senior fellow at think tank Chatham House said Tuesday.
China is set to become increasingly aggressive in its drive to find natural resources, and now has the cash to do so, a senior fellow at think tank Chatham House said Tuesday.

Dr Kerry Brown said China 's key priority is to ensure 7% gross domestic product growth in order to secure social stability and the continuance of the Chinese communist party in power.

"Anything less than 7% for the next 10 years and China will have big problems," Brown said. "Therefore it will be very aggressive in its search for natural resources," he added.

China has built up huge interests but has been relatively cautious to date. Many of these have been built through joint ventures and partnerships, but China now has the financial clout to up the ante, Brown said.

One such target in recent years has been Africa , a continent rich in copper, oil, gold and platinum. Investment in Africa officially only totals around $4 billion but is increasing rapidly, despite a relatively cautious approach so far.

China 's outward investment was around half this amount at the end of 2008 but had doubled within a year.

Investment in Latin America in contrast was around $1.7 billion at the end of 2009, Brown noted, citing official state data.

Total Chinese outward investment was $200 billion at the end of 2009, of which around 48% goes to Hong Kong .

" China has never historically outwardly deployed capital but has upped it in its drive for resources," Brown said. " China has felt it is locked out of developed markets, but it's been cautious in its approach, and not made the sort of killings we'd expected," he added.

China 's experience in Africa has been mixed, with positive success in terms of building infrastructure and deploying capital quickly, and criticism for entering countries with regimes that have a poor ethical record, such as Sudan and Zimbabwe .

"It's a little bit like the good, the bad and the ugly, but there's no question about it-- China will step up and become aggressively dominant in natural resources outside its own borders," Brown added.

Brown was speaking at the Commodities Week conference in London .

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