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Storage of China Resources: China has rapidly started stockpiling critical materials, which has now caught the attention of the world. The massive accumulation of these materials is not a sign of any major war! According to a report, the materials include fuel reserves including crude oil and natural gas, precious metals such as copper, iron ore and cobalt, and especially precious metals such as gold.
According to a report, China is hoarding all these items at a time when things are expensive and given China's economic difficulties, 'this does not even reflect increased consumption.' So now the question arises, why is China storing these things on a large scale? Is this a 'defensive measure' or can Beijing take any aggressive action in the future?
What is China actually doing?
According to media reports, China has asked state-owned oil companies to add about 60 million barrels of crude oil to their reserves and asked state-owned agricultural storage company Sinograin to increase its grain imports.
It is difficult to determine how much is being stored. The Chinese government closely monitors information about its emergency reserves. This makes it difficult to estimate or track its storage levels.
Why is China recovering?
The most dangerous factor whenever a country starts stockpiling essential materials is the possibility of war. Conflict means that imports and access to materials are restricted.
The current containment measures in China have led some analysts to speculate that President Xi Jinping is planning an invasion of Taiwan. Significantly, China considers Taiwan as its territory and says that we will not hesitate to use force to acquire it.
The attack will happen in 2027
According to media reports, there is talk among US officials that the Chinese President wants his army to be ready to attack Taiwan by 2027. However, there is disagreement over the reality of this risk. But China is still accumulating resources beyond what is considered normal during peacetime.
One theory also says that China is preparing for the next economic recession. And for this it specifically wants to isolate itself from Western supplies. The Wall Street Journal says that this is to counter strict export restrictions, especially if Donald Trump recaptures the White House. Apart from this, other alternative definitions are also being made. In such a situation, China may try to gain an edge over competitors or gain control over the market. There is also a possibility that it is fueling international fears of war through propaganda.
What impact will China's storage of this material have?
According to media reports, China's actions are a matter of concern. Given the military presence and the ever-increasing tension with Taiwan, it is worrying to accumulate weapons in recent years to avoid a long conflict.
Economically, storage can be both a boon and a bane for certain industries. Right now, some companies and markets are selling massively, but at the same time, long-term risks are increasing and storage could eventually dampen sales growth.
There is also a sign that China is taking this step to distance itself from the US. According to a report, along with its large purchase of gold earlier this year, China is selling its stake in US government debt to protect itself from dollar sanctions in the event of a conflict with the West. This may be in response to the sanctions imposed on Russia after the invasion of Ukraine.