In the case of critical minerals, China did not take our lunch – we left it on the table

As Canadian Prime Minister Mark Carney declared at Davos, the US-dominated “rules-based international order” of the last few decades is out, and we need a new balanced multi-lateral approach. A variable geometry of economic and foreign policy, international collaborations and partnerships to scale national interest objectives.

For this, Australia needs to apply a new lens of green energy and industry statecraft. That means developing economic partnerships with our key trading partners to develop the price signal and demand pull in international trade to value embodied decarbonisation – that is, value-added resources and products produced using renewable energy – and accelerate the deployment of technologies and capital in zero emissions growth industries of the future. 

In order to drive capital flows into Australia’s renewable energy and clean commodities potential, we must understand the global landscape; where capital is flowing and why.

As Climate Energy Finance’s latest report out this week, Raw Power, highlights: the world’s overwhelming decarbonisation leader, China, is rolling out a structural, state-directed strategy to secure dominance of global supply chains underpinning the emerging zero emissions world economy.

Since 2023, Climate Energy Finance has tracked over $US120 billion in global investments and projects by Chinese firms into resource mining and upstream processing, including critical metals to the energy transformation in lithium, nickel, copper, high-grade iron ore, and bauxite, as well as rare earths and minerals for national security interests.

This complements the more than $US220 billion in outbound foreign investment China has made into midstream and downstream clean technology manufacturing and enabling renewable energy infrastructure since 2023. 

China’s global strategy takes place in the context of an increasingly dynamic, complex and contested geopolitical landscape. However, a key distinction of China’s global resource investment strategy from previous global waves of extractive foreign capital is the partnership model it has built with host nations.

This strategy is increasingly valued in increasing global geopolitical uncertainty, driving energy security and energy independence, sovereign capability and jobs growth. 

Across the Global South, Chinese firms are negotiating domestic processing and value-add investments, deploying capital into enabling infrastructure, skilled employment and facilitating technology transfer in exchange for long-term access to critical and strategic value chains.

China’s strategy has created blueprints for green industrialisation and prosperity in the Global South, offering genuine pathways to boost emerging and developing economies. 

Australia’s position in this rapidly shifting global landscape is under threat unless it takes strategic action to leverage its competitive advantages now. Australia has already had a glimpse of the impact of China’s investments to diversify their value chains to alleviate supply concentration risk. 

In 2023, Australia exported more than half of the world’s lithium demand. This global market leading position has now eroded significantly. By 2026, domestic mines in China now produce more than Australia’s hard-rock lithium spodumene mines.

Furthermore, Chinese firms are actively developing new lithium supply at speed and scale, with new mines under development in 15 countries across the globe, including into the ‘lithium triangle’ of Bolivia, Argentina and Chile – the greatest concentration of lithium deposits globally. 

As a result, in February 2026, Albemarle shut down its lithium refinery in Western Australia just four years into operations, following the cancellation of Albemarle’s growth plans for future refining capacity in Australia.

Similarly, Australia’s IGO fully impaired its interest in Australia’s first lithium refinery, writing down the value of the refinery to zero, with little hope the asset will ever thrive. 

Chinese outbound foreign direct investment into Australia has collapsed by 85% since 2018, accounting for only 1.5% of total foreign investment here in 2025.

Conversely, Australian two-way trade with China reached an all-time record high of $300 billion in 2025, with Australia’s economy remaining deeply complementary to and broadly aligned to benefit from China’s green industrial strategy.

However, this complementarity is an asset that Australia has long undervalued, underrecognised, and underleveraged. 

Australia can harness China’s global resource strategy, leveraging its significant, low-cost capital, technical expertise and supply chain integration into our renewable energy and clean commodity pipeline, executed in a careful, selective industrial strategy with clear national interest objectives.

To do so is not naivety, but an acknowledgement of the criticality of Australia’s economic partnership with China to not only achieve Australia’s climate targets, but to enable our net zero potential.

China’s world leading cleantech firms – from Goldwind and Envision to CATL, BYD, XCMG, Trina Solar, Sungrow, Sunman and Jinko Solar all have rapidly growing teams deployed here in Australia. All are looking to enhance and develop collaborative energy and resource related developments at world scale.

Australia’s strength lies in its geology, not its industrial capability, and our renewable and resource potential will not translate into prosperity on its own. Nations that fail to offer competing or mutually beneficial alternatives to this model risk watching the value chains of the net zero economy take shape entirely without them.

We have seen this begin to materialise, with Australian rare earths developer, Lynas Rare Earths, signing a new offtake agreement with Japan with a price floor to 2038, followed up by a deal with the US Government under similar terms. 

But to realise Australia’s full potential, Australia needs a green energy statecraft approach to maximise the value of government policy and public finance support and encourage cooperation and onshore investments in Australian value-adding capacities to our resources pre-export.

This requires partnership with global cleantech leaders such as China, to bring expertise, whole-of-supply chain support and automation, so as to keep costs as close to globally competitive as possible.

Matt Pollard is an analyst at think tank Climate Energy Finance