China’s Resource Playbook: Securing Critical Raw Materials Worldwide

by | 31. Jan 2025 - 09:46 | Politics

A study by AidData reveals Beijing’s mineral strategy and offers policy recommendations.

In recent years, China has heavily invested in raw material projects essential for the energy transition and advanced technologies. As part of its “Belt and Road Initiative,” nearly $57 billion in funding and subsidized loans have been provided, according to research by AidData, a research lab based at the College of William & Mary, a public university in Virginia. However, Beijing allocates these funds strategically—rather than distributing them indiscriminately, the money flows primarily to projects where Chinese companies are already active, hold stakes or majorities, and have committed capital. This approach ensures alignment between lenders and recipients, strengthening China’s control over critical resources.

China’s Primary Focus: Copper

By far the largest share of China’s financial support has gone into copper mining—around $46 billion between 2000 and 2021. AidData highlights the natural co-occurrence of various raw materials in mineral deposits. In the case of copper, which is essential for electrical wiring and motor coils, cobalt is often extracted as well—an element critical for battery production.

According to the data, China’s investments are primarily directed toward raw material extraction, including lithium and rare earth elements, while relatively little funding goes into processing and refining. This is hardly surprising, as China not only holds a near-monopoly on raw material extraction but also dominates key stages of the global supply chain. This includes the production of rare earth magnets and the manufacturing of lithium batteries, securing its control over critical industries worldwide.

How Can the West Respond to Beijing’s Strategy?

The AidData report concludes with several policy recommendations to counter China’s dominance in critical raw materials. To compete effectively, Western nations must significantly increase investments in the extraction of copper, cobalt, lithium, nickel, and rare earth elements, as well as in transport infrastructure to facilitate exports. This requires more capital, greater operational flexibility, and more adaptable financing mechanisms to match China’s influence and agility.

Transparency is also crucial—resource-rich countries should benefit more from Western investments than they currently do under China’s Belt and Road Initiative. Ensuring fair and open partnerships will be key to balancing Beijing’s long-term strategy.

For a deeper look into how China has shaped its resource policies over decades, explore our in-depth report on rare earth elements.

Photo: anyaberkut via Canva, montage rawmaterials.net