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.”

The Beijing administration is delaying approval for the electric vehicle manufacturer BYD to establish a factory in Mexico, over concerns that the smart car technology developed by China’s largest electric vehicle producer could leak across the border into the US.

BYD initially announced plans in 2023 to build a car factory in Mexico, with intentions to also produce vehicles in Brazil, Hungary, and Indonesia. The Mexico factory was projected to employ 10,000 people and produce 150,000 vehicles annually.

However, according to two individuals familiar with the matter, local car manufacturers require approval from China’s Ministry of Commerce to produce overseas, and the ministry has not yet granted this approval.

Officials fear that Mexico would grant unrestricted access to BYD’s advanced technology and know-how, potentially even allowing the US to access it. One of these individuals told the Financial Times, “The biggest concern for the Ministry of Commerce is Mexico’s proximity to the US.”

According to these individuals who spoke to the Financial Times, Beijing is also prioritizing projects in countries that are part of China’s Belt and Road Initiative infrastructure development program.

Changing geopolitical dynamics have also contributed to the cooling of relations with Mexico. Mexico attempted to maintain relations with Donald Trump, who threatened exports and employment by imposing customs duties on cross-border trade.

Trump also initiated a trade war with Beijing, imposing customs duties on imports from China. In retaliation, Beijing imposed customs duties on approximately $22 billion of US goods, primarily targeting America’s agricultural sector.

Trump’s team accused Mexico of being a “back door” for Chinese goods to enter the US duty-free through the North American Free Trade Agreement. The Mexican government denies this, but responded to US pressure by imposing customs duties on Chinese textile products and initiating anti-dumping investigations into steel and aluminum products originating from China.

The second individual stated, “The new government in Mexico has further complicated the situation for BYD by adopting a hostile stance towards Chinese companies.”

In November, shortly after Trump’s re-election, Mexican President Claudia Sheinbaum stated that there had still been no “definite” investment offer from any Chinese company to establish operations in Mexico, despite BYD reaffirming its intention to invest $1 billion earlier that month.

Gregor Sebastian, a senior analyst at the US-based consulting firm Rhodium Group, noted, “The Mexican government clearly wants to receive some investment [from China], but its trade relations with the US are much more important.”

Sebastian stated that it would not be “commercially logical” for BYD to currently expedite the construction of a production facility in Mexico, noting that the absence of a robust automotive supply chain would force BYD to import numerous components from China, which would be subject to higher customs duties.

When asked whether US customs tariffs and Mexico’s tougher stance against China had halted the company’s plans, BYD Vice President Stella Li stated that “they had not yet made a decision regarding the Mexico plant.”

Last year in February, Li had said that they would choose a location for the factory by the end of 2024.

BYD reported selling over 40,000 vehicles in Mexico last year. The company stated that it aims to double its sales volume in 2025 and open 30 new dealerships in the country.

BYD sold 4.3 million electric and hybrid vehicles worldwide in 2024 and introduced the “God’s Eye” advanced driving system in February, planning to install this system in its entire model range.

Earlier this month, Tesla’s biggest competitor raised $5.6 billion from the sale of shares in Hong Kong, with the proceeds expected to support its overseas expansion.

Shares of BYD, China’s electric vehicle (EV) champion, hit a new record high on Tuesday after its founder, Wang Chuanfu, claimed their EVs can now charge as quickly as filling a car with traditional fuel.

BYD, a rival to Tesla, saw its shares rise by over 6% in early trading in Hong Kong, reaching HK$408.80 (approximately $52.62) per share, marking an approximate gain of 85% over the last 12 months.

The company’s billionaire founder, Wang, stated on Monday that the new charging system developed by the Shenzhen group for BYD’s own EV batteries can add approximately 470 km of range in five minutes.

This claim suggests that BYD has surpassed competitors like Tesla and Mercedes-Benz in fast-charging technology, although the new system depends on several preconditions, including sufficient voltage at charging stations.

There is increasing competition among EV and battery manufacturers to establish faster charging infrastructure to help alleviate consumer concerns about the driving range and charging speed of EVs compared to traditional internal combustion engine vehicles.

According to Chris Liu, a Shanghai-based senior analyst at Omdia consulting, China is estimated to install approximately 460,000 new public EV chargers this year, accounting for about two-thirds of the global total, bringing cumulative units to approximately 2.1 million.

BYD’s recent share price increase comes a month after the company shook the global automotive industry by launching a free advanced autonomous driving system, dubbed “God’s Eye,” which it plans to install in its entire new car series.

These moves put further pressure on Elon Musk’s Tesla and Germany’s Volkswagen, as well as a host of domestic competitors, who have been losing market share as EV sales have exploded in China in recent years.

According to data from Automobility, a consulting firm in Shanghai, BYD already holds approximately 35% of the Chinese EV market. It has an 18% share in the pure battery EV segment and a 56% share in the plug-in hybrid segment.