"Unearthing Influence: China’s Global Strategy for Transition Minerals", 18 November 2025

This paper examines a specific but crucial area of China’s increasing investments in transition minerals- key materials essential for energy transition. These minerals, concentrated in developing economies with weak regulatory frameworks, have attracted substantial Chinese investments. Various explanations have been proposed for this trend, including domestic political motives, supply chain disruptions post-pandemic, rising demand, and China’s strategy to dominate global green technology supply chains.However, the lack of transparency in China’s lending practices and the confidentiality of state-owned enterprise (SOE) contracts make it difficult to discern Beijing’s precise intentions.

China’s rapidly expanding investment in transition minerals is vital for the global economy, especially in the current era of energy transition. However, this has sparked concerns among developed nations and major emerging market economies striving to achieve their energy transition objectives. While greater investment in exploration and mining can increase supply and potentially decrease prices, China’s near-monopoly on refining and production creates the risk of price manipulation and energy security vulnerabilities.

Additionally, the rise of Chinese bilateral financing has serious implications for debtor nations. A higher share of Chinese debt in debtor countries’ national portfolios has been linked to fiscal distress, increased corruption, economic distortions, and the erosion of private procurement laws, granting governments greater fiscal flexibility to allocate funds at their discretion.