China is increasing state support for the exploration of domestic mines amid intensifying competition with the US.
According to an analysis by the Financial Times based on official announcements, at least half of China’s 34 provincial-level governments, including resource-rich regions such as Xinjiang, announced increased subsidies or expanded access for mineral exploration last year.
The increase in funding comes as control over the world’s strategic minerals emerges as a flashpoint between the US and China. The two superpowers are competing for resources needed for advanced technologies such as semiconductors, electric vehicles, robotics, and missiles.
“A series of major breakthroughs have been made in mineral exploration, significantly enhancing the ability to ensure the security of key industrial and supply chains and respond to external environmental uncertainties,” Xiong Zili, director of the geological exploration and management department of the Chinese Ministry of Natural Resources, told reporters this year.
He added that the new mineral exploration plan focuses on increasing domestic energy resources and “strategic” minerals.
China is the world’s largest producer of 30 of the 44 critical minerals tracked by the US Geological Survey.
Seeking to break Beijing’s dominance over the sector, US President Donald Trump has prioritized domestic mining, as well as access to critical minerals abroad, including in Greenland, Ukraine, and the Democratic Republic of Congo, since returning to the White House in January.
Xi Jinping has focused on China’s self-reliance in science and technology and developing its ability to be self-sufficient since becoming the leader of the ruling Chinese Communist Party in 2012.
This effort has become even more imperative amid escalating tensions with the US, and Xi has turned to strengthening supply chains and prioritizing advanced manufacturing and newly emerging high technologies.
Beijing’s mineral supply chains are a critical geopolitical leverage point in the trade and technology war with the US. The government has allocated more than 100 billion RMB ($13.8 billion) annually to geological exploration investments since 2022, marking the highest three-year period in the last decade.
Last year, China also tightened controls over the export of strategic minerals, including gallium, germanium, antimony, graphite, and tungsten, many of which are vital for chip manufacturing, in response to US restrictions on technology exports to China.
Cory Combs, deputy director at the Beijing-based consultancy Trivium China, said that China provides subsidies, tax incentives, and other forms of support to the domestic mining sector “independently” of commodity market cycles.
“From a market perspective, this is extravagance,” Combs told the Financial Times. “But in terms of political and economic security, it is not at all extravagant; it is worth the cost. According to Beijing, money is not the only goal.”
