Section 1. China’s ‘going global’ strategy

China is rolling out a structural, state-directed strategy of Green Energy Statecraft to secure dominance of global supply chains. CEF has tracked over US$120bn in resource mining and upstream resource processing investments since 2023 in lithium, rare earths, nickel, copper, high-grade iron ore, bauxite, and other materials essential for industrial decarbonisation. This focus complements over US$220bn in outbound FDI since 2023 into midstream and downstream cleantech manufacturing. The strategy has shifted from the infrastructure-heavy Belt and Road Initiative to a more mutually beneficial model. Chinese firms are now collaborating with host governments on in-country value-adding, processing facilities, and nation-building infrastructure in exchange for long-term resource access and offtake agreements.

Section 2. The global energy system transformation that underpins China’s capital deployment

Global investment into the energy transition reached a record high of US$2,309bn in 2025, an 8% increase year-on-year. China maintained its world leadership by investing US$800bn in 2025. Electrification is projected as a major growth industry in 2026, driven by energy security objectives and the drive towards electric vehicles. New energy vehicle sales reached 21.7 million in 2025, and China’s electrification drive saw a world record 446GW of renewable energy capacity added in the same year. This transformation has underpinned surging demand for critical minerals like lithium, nickel, graphite, and cobalt.

Section 3. The impact of China’s export-oriented growth on global commodity pricing

Chinese majors prioritise investment, employment, and market growth over near-term focus on profitability. They are increasingly vertically integrated, allowing parts of the global supply chain to sustain lower prices while profit margins remain higher elsewhere, such as in battery and EV manufacturing. Massive over-investment in Indonesian nickel nearly halved the global nickel price over 2022-2024, rendering several Western competitors unviable. However, prices began strengthening for many energy transition commodities toward the end of 2025 due to sustained structural growth and government efforts to manage supply.

Section 4. Global foreign and industrial policy responses to curb China’s global influence

Under the Trump administration, the US has escalated trade and investment barriers, including targeted tariffs on Chinese imports. In response, China is increasingly offshoring its manufacturing capacity to Europe and other regions to circumvent export restrictions. Policy initiatives such as the EU Critical Raw Materials Act and the US-led Mineral Security Partnership aim to counter China’s lead by focusing on domestic capability and supply chain diversification. In December 2025, Korea Zinc committed to a joint venture with the US government for a new US$7.4bn critical minerals smelter to build domestic capacity.

Section 6. Critical minerals – Rare earths

China holds approximately 90% of global rare earth refining capacity and has built strategic power in this sector over decades of planning and investment. Since 2023, Beijing has periodically imposed export controls on gallium, germanium, antimony, graphite, and tungsten. These controls are being deployed as policy leverage, with a tungsten ban in February 2025 tripling prices. While countries like the US and Japan are moving to stockpile minerals and diversify supply, the report notes that these efforts will take decades to scale into vertically integrated production.

Section 7. Critical minerals – Lithium

Lithium prices have experienced a massive boom-bust cycle, with a price collapse of more than 90% over 2023-2024. However, January 2026 saw prices in China rise sharply as inventories were drawn down. China has resolved its over-reliance on Australia by developing strategic domestic lithium mine capacity and investing in at least 15 countries. By the start of 2026, domestic mines in China produced more lithium than Australia. Global lithium demand is forecast to see a 10-20% CAGR to 2030, driven by the expansion of battery manufacturing.

Section 9. Strategic metals – Nickel

Indonesia has disrupted the global nickel market, entering 2026 as the world’s number one nickel miner and processor due to an exceptionally close partnership with China. Massive Chinese investments in Indonesian mining and smelting total over US$65bn. Tsingshan’s Indonesia Morowali Industrial Park alone represents more than US$30bn in investment over the last decade. Indonesia has also introduced export restrictions on raw ores to foster domestic processing facilities, driving higher-value export revenues.

Section 10. Strategic metals – Iron ore

A US$23bn investment in Simandou iron ore mining in Guinea is expected to position the nation as the third-largest iron ore exporter by 2029, eroding the long-held export duopoly of Australia and Brazil. Simandou delivered its first 200,000 tonne shipment to China in January 2026. Meanwhile, China’s Mineral Resources Group is moving to centralise iron ore purchasing, and buyers are pushing exporters toward renminbi-denominated settlement.

Section 13. Future made in Australia (FMIA)

Australia ranks 105th of 145 countries on the Atlas of Economic Complexity, reflecting an overreliance on zero-value-add exports of iron ore, LNG, and coal. The Future Made in Australia initiative has allocated over A$81bn to zero emissions industries since early 2023. However, the report notes that several aging Australian refineries and smelters are under growing financial distress. In February 2026, Albemarle announced the closure of its Kwinana lithium hydroxide refinery, commissioned only four years earlier, stating it was unable to compete with China.

Recommendations for Australian policymakers

The report recommends that Australia adopt a Green Energy Statecraft approach to maximise the value of government policy and public finance. This includes balancing policy support with targeted anti-dumping tariffs and local content mandates. Policymakers should mandate onshore processing as a condition of new partnerships and deploy firmed renewable energy infrastructure to export embodied decarbonisation. Furthermore, the report suggests prioritising carbon pricing to value green industrial production and establishing an Australia–China Green Transition Cooperation Framework to facilitate knowledge sharing and investment.