The escalating economic competition between China and the United States has thrust the control of crucial mineral resources into the spotlight, reshaping the global geopolitical landscape. Beijing is aggressively fortifying its strategy to achieve self-sufficiency in these vital resources, aiming to safeguard supply chains and bolster its position in advanced industries such as semiconductor manufacturing and clean energy. This strategic pivot contrasts sharply with Washington’s efforts to curb Chinese dominance through alternative investments and strategic alliances.
Over the past year, more than half of China’s 34 provincial governments have announced increased support for mineral exploration, underscoring a concerted governmental push to enhance domestic capacities. This surge in financial backing coincides with a global tug-of-war over strategic minerals essential for technologies like electric vehicles and robotics. Shi Chuangzi, Director of Geological Exploration and Management at the Ministry of Natural Resources, emphasized this point during a recent press conference, stating, “A series of major achievements have been made in mineral exploration, significantly enhancing the capability to ensure the safety of critical industrial chains and supply chains while responding to external environmental uncertainties.”
China’s new mineral exploration plan is laser-focused on boosting domestic energy resources and strategic minerals. Despite being the world’s leading producer of 30 out of 44 major minerals, according to the U.S. Geological Survey, Beijing is leaving no stone unturned in its quest for self-sufficiency. This drive is part of a broader strategy to reduce reliance on foreign supplies, particularly from the U.S., which has been prioritizing local mining and seeking access to vital minerals abroad in regions like Greenland, Ukraine, and the Democratic Republic of the Congo.
Since Xi Jinping’s ascension to power and the escalation of trade tensions with the United States, China has placed a premium on self-sufficiency in science and technology. The Chinese leadership is fortifying supply chains, prioritizing advanced manufacturing, and fostering high-tech industries. Mineral supply chains have become a critical geopolitical pressure point in the ongoing trade and technological war with the U.S.
Since 2022, the Chinese government has allocated over 100 billion yuan (approximately 13.8 billion dollars) annually for geological exploration, the highest investment rate in a decade. Beijing has also tightened regulations on the export of strategic minerals, including gallium, germanium, antimony, graphite, and tungsten, in response to U.S. tech export restrictions. Kory Combs, Assistant Director at Trivium China consultancy, noted, “China has provided subsidies and tax incentives along with other types of support for the domestic mining sector, independent of commodity cycles,” highlighting the political and economic security imperative behind these investments.
In 2025, Xinjiang plans to ramp up its geological exploration support to 650 million yuan from 150 million yuan in 2023, reflecting a broader trend of increased permits for mining exploration across the region. Tarek Al-Rifai, CEO of the Krom Center for Studies, added, “China is currently the largest producer of rare earth minerals. The trade war with the U.S. gives the country further incentive to increase production faster.”
As the trade conflict intensifies, China is not only exploring its resources more vigorously but also seeking to maintain its global dominance in mineral production. This includes China’s two-decade-long efforts to loan approximately 57 billion dollars, facilitated through at least 26 state-backed financial institutions, to mine, process, and refine cobalt, lithium, nickel, and rare earth minerals worldwide. Beijing has also implemented policies to safeguard strategic resources, such as prohibiting foreign investments in rare earth mining since a 2021 decision.
From an international perspective, Nihad Ismail, an energy economics expert, noted that China perceives itself as a victim of U.S. economic sanctions, particularly concerning technology export bans directed at Chinese companies since 2019. This competitive spirit has led to the creation of a “unreliable entities” list targeting American defense companies.
As of December 3, 2024, China has implemented a ban on critical mineral exports, including gallium, germanium, antimony, and graphite products shipped to the U.S., citing national security concerns. This move has propelled Washington to seek alternative sources in Africa and South America, with the U.S. investing only 300 million dollars in mining projects in Africa compared to China’s significant 22 billion dollars investment in the same region in 2023.
Experts predict that dependence on China for certain strategic minerals will likely endure for the foreseeable future. According to a report by the German raw materials agency (DERA), the ongoing low prices of rare minerals in the global market hinder the chances of digging for new deposits outside China. Harald Ilschner, the report’s author, stated, “All companies dealing with
