Investment in Chinese Critical Minerals Surges after Biden Signs Climate Legislation

China’s Surge in Critical Minerals Investment

Recent analysis from Australia’s Griffith University reveals a significant uptick in Chinese investment in critical minerals essential for green energy products following President Joe Biden’s 2022 climate bill.

The Belt and Road Initiative Boost

Through the Chinese Communist Party’s Belt and Road Initiative (BRI), Chinese entities have ramped up investments in minerals like lithium, copper, and nickel. These minerals are crucial for manufacturing products such as lithium-ion batteries for electric vehicles (EVs), according to the Griffith Asia Institute’s report.

Growth Projection in BRI Investment

Last year, BRI mining investment saw a 158% increase compared to 2022. The Griffith Asia Institute forecasts continued growth in BRI investments targeting green energy, mining, and related activities through 2024.

Understanding the Belt and Road Initiative

The CCP-backed Belt and Road Initiative aims to establish a vast network of global infrastructure projects. Critics argue that these investments could potentially lead to debt traps for developing countries, giving China significant leverage over their governments.

The Inflation Reduction Act and Green Energy Subsidies

President Biden signed the Inflation Reduction Act (IRA) into law in August 2022, allocating $369 billion for green energy subsidies. This move was intended to promote a cleaner American economy and drive manufacturing of products like solar panels and EVs.

Rise in Chinese Mining Investments

Following the IRA’s implementation, Chinese entities invested over $19 billion in mining projects, with a significant portion going towards minerals like nickel, lithium, copper, and aluminum. This marked a substantial increase from pre-IRA investment levels.

Chinese Entities Exploiting IRA Provisions

Reports indicate that Chinese companies are strategically positioning themselves to benefit from the IRA’s subsidies. Some are establishing operations in locations like Morocco to access U.S. subsidies, while others are forming joint ventures or subsidiaries within the U.S.

U.S. Private Sector Green Energy Investments

Since Biden’s inauguration, the private sector has injected over $360 billion into green energy initiatives, leveraging the IRA’s subsidies to drive sustainable energy projects.

Concerns Over Chinese Green Energy Products

Despite Biden’s stance on China’s economic growth, concerns persist over Chinese green energy products. The administration is investigating certain Chinese EVs for potential national security risks.

Final Thoughts

While Biden aims to maintain strong economic ties with China, scrutiny over Chinese green energy practices continues, particularly in the context of national security and supply chain concerns.