Highlights

• China's critical minerals policies are primarily motivated by internal economic and environmental needs, not global market disruption.
• Researchers advocate for cooperative engagement and targeted risk management instead of confrontational 'de-risking' approaches.
• The study emphasizes that China remains central to the global energy transition, requiring nuanced and collaborative strategies.

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A new peer-reviewed article in World Trade Review by Dr. Weihuan Zhou (opens in a new tab) (UNSW Sydney), Victor Crochet (opens in a new tab) (Van Bael & Bellis/Cambridge University), and Haoxue Wang (opens in a new tab) (UNSW Sydney) challenges prevailing Western narratives on China’s critical minerals (CM) strategy. Published online January 30, 2025, the study argues that China’s policies—often framed as coercive or “weaponizing” supply chains—are primarily designed to address internal economic priorities, environmental challenges, and resource security, rather than to disrupt global markets.

Key Findings

The authors trace China’s CM policy evolution from rare earth export rebates in the 1980s, through environmental crackdowns and WTO dispute compliance, to its current emphasis on technological upgrading, industrial consolidation, and sustainable development. While China dominates CM refining capacity, it is also a major importer facing supply risks for minerals like lithium, cobalt, and nickel. Beijing’s strategies blend inward measures—R&D investment, licensing controls, green mining standards—with outward ones such as overseas resource investments, Belt and Road Initiative (BRI) partnerships, and selective foreign investment liberalization.

The paper warns that the current G7-led “de-risking” approach—which treats China as the risk—may lead to de facto “decoupling,” undermining rational policymaking and increasing supply chain instability. Instead, the authors advocate for targeted risk management and engagement with China in cooperative frameworks, including the WTO and potentially the Indo-Pacific Economic Framework (IPEF). (opens in a new tab)

Implications

For industry and policy stakeholders, the research underscores that CM supply resilience cannot be achieved by exclusion alone. China remains central to the global energy transition, both as a supplier and a customer. Engaging China in setting environmental, labor, and transparency standards could mitigate supply risks while reducing the likelihood of retaliatory trade measures. The analysis also highlights that defensive measures by resource-rich nations—such as export bans and nationalization—can be as disruptive as any Chinese policy action.

For investors and project developers, according to the paradigm arising from this paper, this means geopolitical diversification strategies should account for cooperation scenarios alongside competition. Markets that reflexively price in confrontation risk may overlook partnership opportunities in joint ventures, technology transfer, and downstream value chain development in third countries.

Limitations

The authors base their conclusions on an extensive review of Chinese policy documents, WTO dispute records, and trade/investment data. However, the analysis relies heavily on stated policy objectives and past behavior; it cannot fully predict how China might act under future geopolitical or economic shocks. Additionally, while the paper challenges the “weaponization” narrative, it acknowledges China’s capacity to impose export restrictions under specific political or security conditions.

Final Thoughts

This study adds nuance to a polarized debate: China’s CM strategy is driven more by domestic imperatives than by a deliberate plan to destabilize global supply chains. Treating China solely as a threat risks self-inflicted supply disruptions. For a stable green energy transition, governments and industries may be better served by a dual approach—diversifying sources while pursuing cooperative engagement with Beijing under transparent, rules-based frameworks.

Citation: Zhou, W., Crochet, V., & Wang, H. (2025). Demystifying China's Critical Minerals Strategies: Rethinking ‘De-risking’ Supply Chains. World Trade Review, 24(Special Issue 2), 257–281. Cambridge University Press. https://doi.org/10.1017/S1474745624000193 (opens in a new tab)