Over the last decade, around the world, China has been buying up mountains and mines, agricultural land, and oil fields at an extraordinary rate. In 2007, a Chinese company bought the mineral rights to two billion tons of copper in a Peruvian mountain for U.S. $3 billion. This was relatively small change; in 2008 the same company spent $14 billion on a stake in Australia’s aluminum industry. Since 2005, China has engaged in nearly 500 direct foreign investments and large contracts, valued at U.S. $505 billion–roughly one billion U.S. dollars per week.

These investments ensure China an upper hand in future struggles over resources. Finite and rapidly depleting supplies of land, water, minerals, and fossil fuels cannot match rising demand, driven by a growing world population, rapidly increasing global wealth, and urbanization. This fundamental supply-demand imbalance will lead to higher commodity prices and an increased risk of resource-driven conflict. In the aftermath of the 2008 financial crisis, commodity prices increased 150 percent. And since 1990, at least twenty-four civil wars and violent conflicts have had their origins in commodities. Many more conflicts are likely in the coming decades.

Yet China seems to be alone in adopting a multilateral commodities strategy, relying on trade, investment, resource swaps, and financial transfers to gain resource control. In 2010, China pledged to lay $12 billion worth of railway lines in Argentina, helping to sweeten relations with that country and facilitate export of minerals. In 2009, China loaned Russian oil companies $25 billion in exchange for a twenty-year supply of oil, at 300 thousand barrels per day. These deals benefit both China and its resource-rich hosts

By contrast, many other national governments have adopted a unilateral approach to resource acquisition and control, using a mix of military force to gain access to resources abroad and taxation and export bans to prevent control of domestic resources. In April, Argentina nationalized a majority stake in the energy company YPF, formerly a major subsidiary of the Spanish company Respol, after the discovery of new major natural gas deposits off its coast. Heavy-handed policies to exert control over local resources and commodity prices are not limited to the developing world. In March, Australia introduced a 30 percent tax on iron and coal mining profits, in an effort to grab cash from a local resource boon. Such policies are ultimately inefficient, hamper global production, exacerbate shortages, and force commodity prices even higher.

The predilection of the United States and her allies for military incursions into resource-rich regions such as Iraq, for example, almost always disrupts production and forces commodity prices higher. Political uncertainty can add a risk premium of $10 or more to the price of a barrel of oil.

Despite the serious risks that come with possible global commodity shortages, no unified international body exists to address these challenges. In the absence of such an entity, China’s multilateral approach to the commodity problem is sensible. Ultimately, if the world doesn’t take larger steps to address the imbalance between resource supply and demand, we face higher prices, scarcity, and more resource conflict.