Biden’s Climate Bill Boosts China’s Critical Mineral Investment
TL/DR –
After President Joe Biden signed his climate bill in 2022, China significantly increased investment in critical minerals necessary for creating green energy products. In 2023, Chinese entities invested over $19 billion in mining projects, a growth of 158% from the previous year, focusing on minerals such as lithium, copper, and nickel used in electric vehicle batteries and other green technologies. Critics of Biden’s bill argue that China’s dominance in green supply chains allows it to benefit from taxpayer-funded subsidies, with Chinese companies establishing operations in the U.S. and allied countries to access these subsidies.
China’s Green Energy Investments Soar Following Biden’s Climate Bill
Green energy product investments in China have significantly escalated since President Joe Biden signed the 2022 climate bill, as per a recent analysis by Australia’s Griffith University. This increase is primarily seen in the Chinese Communist Party’s (CCP) “Belt and Road Initiative” (BRI) that has intensified investments in lithium, copper, and nickel mining — critical minerals for manufacturing lithium-ion batteries for electric vehicles (EVs).
According to the Griffith Asia Institute’s report, BRI mining investment heightened by 158% in 2023 compared to the previous year, with predictions of continued growth through 2024. However, the BRI’s detractors argue that its investment and construction strategies might be a ploy by China to entrap developing countries in debt, thereby gaining leverage over their governments.
After the Inflation Reduction Act (IRA) was signed into law by Biden in August 2022, Chinese entities invested over $19 billion in mining-related projects in the following year. Most of this investment ($15 billion) flowed into mining nickel, lithium, copper, and aluminum, as per the Griffith Asia Institute. The total BRI investment in mining in 2021, before the IRA was enacted, did not exceed $10 billion.
Chinese entities are reportedly strategizing to exploit IRA loopholes and access U.S. subsidies. For instance, some are establishing operations in nations like Morocco, which are not barred from benefiting from the bill. Others are setting up in the U.S. using joint ventures or subsidiaries.
After Biden assumed office, $360 billion has been invested in green energy ventures by the private sector, driven by the IRA’s substantial subsidies, according to the White House. Meanwhile, there are persistent concerns about the alleged connection between Chinese green supply chains and Uyghur Muslim slave labor. Additionally, the administration is investigating certain Chinese EVs perceived to pose potential national security risks.
“China is determined to dominate the future of the auto market… China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch,” Biden said.
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