Listen to this article
Critical minerals have become a battlefield in intensifying geopolitical rivalries. Economies across the world, from developed and developing to resource-rich and resource-poor, are racing to secure supplies, strengthen sovereign control, expand processing capabilities and advance extraction and refining technologies.
Many of these strategies rely on friendshoring supply chains with allies and trusted partners to derisk against the dominant player—China. But the extent to which China poses a risk in critical mineral supply chains requires a closer examination of its strategies and policies, which are more nuanced than widely perceived.
For decades, China’s critical mineral strategy focused on the rare earth industry. In the 1970s, the goal was to nurture this infant industry. Supportive policies and initiatives rapidly elevated China to the world’s largest rare earth producer and supplier. But success also generated problems such as illegal mining, overproduction, smuggling, resource depletion and pollution.
To tackle these problems, a balanced approach emerged to facilitate systemic industrial reforms aimed at enhancing environmental protection and resource management through technologies, innovation and sustainable development. Financial support increasingly targeted processing and commercial application of rare earths. Over time, this enabled China to achieve unparalleled scale and efficiency in the mineral refining sector.
A broader framework emerged with China’s National Plan for Mineral Resources (2016–2020). For the first time, it identified 24 ‘strategic minerals’ and an overarching strategy for the entire mineral resources industry extending to 2025. The plan set out major inward-oriented policies aimed at improving efficiency, upgrading industrial structures, advancing green development and strengthening supply chain resilience. It also included outward-oriented measures focused on promoting engagement through trade, investment and international cooperation.
This dual approach reflects a balancing act. China aims to ensure stable supply for its continued economic growth and industrialisation while also pursuing economic sustainability, industrial modernisation and technological advancement.
As critical minerals underpin major industries—such as semiconductors, electric vehicles, defence and artificial intelligence—global competition for these resources will intensify. China’s strategy will remain focused on securing supplies at home and abroad while pursuing quality development and leadership in critical and frontier technologies. These priorities are embedded in China’s broader economic and development goals set out in the 14th Five-Year Plan in 2021 and reaffirmed in the 15th Five-Year Plan recommendations in 2025. It is necessary, both strategically and pragmatically, for China to advance its upgraded economic growth model in ways that also respond to geopolitical uncertainties and vulnerabilities.
Despite the complex policy landscape, criticisms of China in the critical mineral industry are often cast in geopolitical terms, targeting China’s supply chain dominance and weaponisation of that power amid economic and diplomatic tensions.
Moving beyond this currently prevailing narrative of China as a ‘risk’ is essential to forging multilateral pathways towards critical minerals supply chain resilience.
While China is a leading processor and supplier of critical minerals, it does not control most of the mineral resources and is also the world’s largest importer. Australia alone accounts for approximately one-third of China’s critical mineral imports. China also sources critical minerals from other major resource-rich economies and global suppliers. Thus, like other economies, China faces the challenges of dependency, supply disruption and price fluctuation.
China’s trade restrictions against Australia in 2020 and Lithuania in 2021 are widely seen as evidence of economic coercion. While the allegations are understandable, the circumstances in which China may take such actions are limited and criticisms of past Chinese coercion remain contested. For example, China’s export restriction of rare earths to Japan amid tensions in the East China Sea in 2010, according to leading observers, may have been part of a broader policy move to reduce rare earths exports and not targeted at any specific economy.
Chinese export restraints of raw materials and rare earths have also led to high-profile WTO disputes. These restrictions caused disruptions of global supplies and price hikes, but they were linked to goals unrelated to economic coercion. Following adverse WTO rulings, China removed these restrictions and used the rulings to push forward domestic reforms of the rare earths industry, particularly to strengthen local enforcement of national sustainable development policies.
The wave of export controls China introduced in 2025, targeting germanium, gallium and more recently rare earths, was largely a defensive action in retaliation to US restrictions on advanced chips exports and unilateral tariffs. China has taken similar defensive measures in other disputes, including challenging the EU at the WTO and imposing tariffs on Canadian canola in response to tariffs against Chinese electric vehicles.
Such tit-for-tat actions justified on national security grounds are common in trade frictions. Yet the January 2026 Canada–China agreement to scale back their respective trade measures suggests that while China would not hesitate to defend its interests, it does not seek to maintain restrictions if cooperation is possible.
Viewing China’s critical mineral strategy exclusively through a geopolitical lens breeds misconceptions and perhaps unnecessary confrontation. Instead of treating China as the ‘risk’, governments should direct their derisking strategies on tackling vulnerabilities in critical mineral supply chains via inclusive cooperation.
Like measures adopted elsewhere, China’s strategy prioritises domestic economic needs and strategic objectives over managing negative spillovers. These inward-looking policies can significantly disrupt critical mineral supply chains. The EU–Indonesia WTO dispute over Indonesia’s nickel export ban illustrates the distortive impact of such policies.
Forging selective partnerships can also generate disruptions and uncertainties by fragmenting global supply chains and adding regulatory costs. It incentivises excluded economies, especially key players in global supply chains, to take unilateral actions and build their own alternative partnerships.
In November 2025, China launched the International Economic and Trade Cooperation Initiative on Green Mining and Minerals to facilitate cooperation among all interested parties. Regardless of China’s strategic motivations, such as counteracting the derisking strategy of G7 governments and the increasing competition from critical mineral strategic partnerships forged by other countries, a coherent, globally coordinated policy response of this sort is needed to safeguard long-term resilience, predictability and security in critical mineral supply chains.
Weihuan Zhou is Professor and Co-Director of the China International Business and Economic Law Centre, Faculty of Law and Justice, UNSW Sydney.
This article appears in the most recent edition of East Asia Forum Quarterly, ‘Resource geopolitics’, Vol 18, No 1.