Two important books

After analysing the amount of arable land on earth (11% of the total), and the difficulty of feeding growing populations, Moyo turns to China. She tells us that between 1997 and 2008 China lost more than 12 million hectares of arable land, mostly to city expansion. Deserts are expanding and pollution is reducing the productivity of huge expanses of farmland. Hence the need for leasing farms in other nations and concern about food markets.

The problems of water are also extreme and immediate. Eighty per cent of earth's population have water worries and with another decade many will be facing crisis. The issues are not just environmental. Israel and its neighbours face dangerous water disputes that will be about survival, not just comfort. Many other nations face disputes about the sharing of major river systems. China also has huge water problems.

All resource markets are subject to broad economic realities. Moyo points out that China is the world's second largest economy but ranks fifth in terms of total consumption. The US has 70% of its GDP as consumption, Europe 60%, and China 35%. Economists love to berate China about this and call for higher consumption as a way of sending more money back to the West. However, now that China looks certain to do just that we must recognise that demand for many metals, food and energy will climb as a result.

Copper is very important for power transmission and in electronic goods. Between 2006 and 2010 China's share of global refined copper went from 23% to 41%. In ten years time it is expected to be over 50%. It helps explain why Chinese companies are keen to buy Australian copper mines.

There is much more of value in this very readable book.

It ends with warnings that simply expanding population, and demand driven by economic progress, must result in a crisis as supply can't expand to meet the new needs. While making it clear Chinese demand is a large part of the problem Moyo praises them for seeing the future and taking huge steps to prepare for it while the West talks and dithers. Her last page has the title, "Heading Into the Eye of the Storm".

There is hope however, and she does produce some ideas for averting the worst of disaster.

One hope is that China is coming to the end of its huge infrastructure roll out. It now has more highway kilometres that the US, is well into a nationwide fast train network, has completely renewed its airports in virtually all major cities, is rolling out non-carbon power plants at a great rate, and 'only' has a few hundred million more rural dwellers to accommodate in urban environments. This may be good news for the world but its very bad news for Australia. If true it would mean big drops in coal and iron ore sales just as producers manage to flood the market.

'Winner Take All' makes it very clear we need a global realist government now.

I recommend both books to anyone with a serious concern for the future.