Surge in Chinese Investments in Critical Minerals for Green Energy

An analysis conducted by Australia’s Griffith University reveals a significant increase in Chinese investment related to critical minerals crucial for green energy products following the signing of President Joe Biden’s climate bill in 2022. The study, published by the Griffith Asia Institute, indicates that Chinese entities, through the Belt and Road Initiative (BRI), substantially intensified their investments in mining minerals such as lithium, copper, and nickel in 2023. These minerals are essential for manufacturing products like lithium-ion batteries used in electric vehicles (EVs). The BRI mining investment for the year 2023 experienced a remarkable 158% growth compared to 2022, with projections suggesting further growth in BRI investments targeting green energy, mining, and related activities throughout 2024.

The Belt and Road Initiative, backed by the Chinese Communist Party (CCP), aims to establish an extensive network of global infrastructure projects. Critics argue that BRI investments and construction contracts may serve as a means for China to create debt traps for developing countries, providing the CCP with significant leverage over those governments.

Following the enactment of the Inflation Reduction Act (IRA) in August 2022, allocating $369 billion for green energy-related subsidies, Chinese entities invested over $19 billion in mining-related projects in the first full year. Approximately $15 billion of this investment was directed towards mining nickel, lithium, copper, and aluminum. This marks a substantial increase from 2021 when total BRI investment in mining did not exceed $10 billion.

Concerns have been raised about China benefiting from the IRA’s provisions designed to support American enterprise, with Chinese entities exploiting loopholes to access U.S. subsidies. Chinese companies are reportedly establishing operations in countries like Morocco, an American ally not excluded from the IRA benefits, or positioning themselves to benefit from the legislation by setting up shop in the U.S. through joint ventures or subsidiaries.

While the Biden administration emphasizes cooperation with China, there are apprehensions about certain Chinese green energy products. Recent announcements reveal a probe into specific Chinese electric vehicles (EVs) perceived to pose potential national security and intelligence risks. President Biden expressed concerns about China’s determination to dominate the future auto market and the risks posed to national security by flooding the U.S. market with Chinese vehicles.

The White House has not yet responded to requests for comment on these developments.

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