16 May, 2024
The growing secrecy around China’s mineral resource planning: implications for the EU
TT
As the EU scrambles to reduce its dependency on China for the supply of mineral raw materials – particularly the refined, high-quality materials and products in demand by the European manufacturing industry – China is becoming increasingly secretive about its long-term plans for the sector.
A recent report by the think tank MERICS highlights a problem facing western researchers of contemporary China – the difficulty of obtaining reliable information about Chinese policy. According to the report, the increasing reluctance of the Chinese government to disclose information to the public, coupled with new restrictions on foreign access to specific online resources, “increases challenges assessing China’s future development in key fields for companies, governments, and researchers alike”.
This Commentary explores what these challenges mean for the EU in a specific policy area – mineral raw materials. In 2023, China implemented measures aimed at restricting the export of certain raw materials and related technologies, including export controls on gallium and germanium (used in semiconductor manufacturing) and select graphite products (used in production of high performance batteries, among other applications), as well as an export ban on rare earth processing technology.
These measures have heightened concerns about the potential that China will weaponize its control over the materials needed for Europe’s “green transition”. An important aim of recent EU initiatives, such as the Critical Raw Materials Act and the “de-risking” policy, is to reduce Europe’s reliance on China for the supply of raw materials that are deemed “critical” to the European economy and its security. To achieve this, European researchers and policymakers need to not only comprehend China’s current raw material policies but also to understand the Chinese state’s long-term aims in this sector. Identifying and prioritizing various policy options requires a thorough understanding of the trajectory of Chinese policy. An examination of Chinese policy and planning documents for the mineral sector and downstream industries can provide such an understanding.
Mineral resources planning in the Chinese context
Since the early 2000s, the Chinese government has issued four rounds of mineral resources planning documents. In 2016 and 2017, it published a series of national and local five-year plans, alongside industry and commodity-specific strategies. Although these plans were published only in Chinese, and were intended for a domestic audience, they helped enhance understanding amongst western analysts of the priorities, policies, and broader trends in China’s mineral sector.
The National Plan for Mineral Resources (2016-2020), for instance, established the overarching objectives for the exploration, development and downstream application of mineral resources in China. It also provided China’s first-ever official catalogue of 24 “strategic minerals” (战略性矿产), which were selected for their perceived importance to China’s economy, defense, and the advancement of its high-tech industries. It also detailed a range of measures aimed at securing the supply of these minerals.
Alongside the publication of this catalogue, there has been considerable Chinese academic discussion about China’s mineral needs. This has made possible studies of Chinese conceptualizations of “strategic” and “critical” raw materials and how they differ from those in the West. For instance, in addition to the minerals deemed essential for China’s high-tech ambitions, the Chinese catalogue also features basic raw materials such as iron ore, copper, uranium, oil, and natural gas. These are not typically classified as “critical” or “strategic” in the West. However, in China they remain crucial for industry, infrastructure development, and energy security. The National Plan for Mineral Resources, published in 2016, therefore helped foreign analysts to gain a more detailed and nuanced understanding of China’s high-tech aspirations. It allowed them to situate these aspirations in the broader context of China’s industrial priorities at the time.
China’s “missing” national plan for mineral resources
China’s national-level plan for mineral resources for the years 2021 to 2025 was expected to be released in late 2021 or early 2022. However, so far, this document has not appeared, although several of the local plans have since been issued and made available to the public. There is compelling evidence that the national-level plan exists, but that it has been classified and not publicly disclosed. The preparatory work for drafting the national plan was officially launched in early 2020. Several of the published local plans make a reference to the national-level plan. These local plans are required to comply with the national plan’s guidelines and thus be published after it. However, as a MERICS report also notes, it is not unusual for lower-level documents to refer to a central-level document even if the latter has not been publicly disclosed.
Two other important plans have also not appeared. The Rare Earth Industry Development Plan and the Nonferrous Metal Industry Development Plan were expected to be published in 2021 or 2022 (the previous plans covered the period from 2016 to 2020). It is possible that these two plans exist and have been classified, but we have not found references to them in available materials. Another possibility is that the Chinese government opted not to develop commodity-specific plans for this planning cycle, instead integrating them into the new Raw material industry development plan, published in 2021.
In addition to not publishing certain documents, the Chinese state also appears to have put in place barriers to prevent foreign access to certain materials and web pages on the Ministry of Natural Resource’s website.
Taken together, these new restrictions are a departure from the relatively high level of transparency in the previous round of mineral resources planning. For instance, in 2016 the establishment of the aforementioned catalogue of “strategic minerals” was announced at a press conference by the Ministry of Land and Resources (a ministry replaced by the newly established Ministry of Natural Resources in 2018).
The decision to classify the national plan is part of a broader trend of growing opacity in Chinese policymaking and planning. It reflects an inclination to securitize issues that were previously not regarded as particularly sensitive. In recent years, the Chinese state has made amendments to laws and regulations relating to information disclosure which have downgraded the importance of transparency in government and widened the definition of “state secrets”. In February 2024, China’s Law on Guarding State Secrets was extended to cover “work secrets”. This expanded scope of the Law could result in even less information about Chinese policy being disclosed in the future.
Table 1 The publication status and accessibility of major plans and documents related to China’s mineral/mining sector
Source: Author’s own compilation
Implications for the EU’s de-risking strategy
This increasing secrecy will have important implications for European raw material strategies. As noted above, without a thorough understanding of China’s long-term plans for the mineral sector, it is more difficult for European policymakers to design effective and sustainable policy responses. China is dominant in the global supply chains that provide “critical raw materials”. Given this, European assessments of supply chain vulnerabilities are at least partly shaped by interpretations of China’s long-term priorities and plans. European governments and businesses who wish to “de-risk” their mineral supply chains need to not only understand today’s supply chain vulnerabilities but also to be aware of what these might be five-to-ten years from now.
Moreover, the barriers China has put in place on foreign access to information are not conducive to trust-building between China and the West. These could create the impression that China perceives foreign interest in its raw material strategy as encroaching or even harmful. They could also undermine Chinese companies’ attempts to frame their investments in critical raw materials overseas as something which helps to meet Western demand, instead reinforcing perceptions that these investments serve a state agenda which the Chinese government seeks to hide from the West.
The growing information imbalance
The lack of transparency also leads to the problem of information asymmetry between China and the EU. Chinese officials and researchers now enjoy relatively wide access to the raw material strategies of the EU and many European countries, including, in some cases, their detailed methodologies for assessing raw material “criticality”. Meanwhile, China increasingly restricts access to information regarding its own strategies and plans.
These changes arguably mark a reversal in the accessibility of information regarding each other’s priorities. Previously, if one could read Chinese, it was possible to gather significant insights into state priorities from the plethora of detailed Chinese plans. Western market economies, by contrast, have traditionally been distrustful of industrial policy and long-term planning. However, they are now shifting towards more state-centric strategies, which will likely result in an increase in strategic documents and plans.
The lack of transparency highlights a key difference in the purpose and function of mineral resource strategies in China and the West. A primary objective of the EU’s critical raw material strategy, for instance, is to raise awareness of criticality issues among industry actors, policymakers, academia, and the public. The EU therefore aims for such documents to be read by as many people as possible. In China, mineral resource plans primarily target the bureaucrats and industry stakeholders responsible for executing these plans. A primary objective of China’s mineral strategy is to safeguard its leading position in the critical minerals value chain. It is likely that Chinese leaders have determined that maintaining secrecy provides them with greater advantages in achieving that objective.
What can the EU do?
Europe should prepare for a China that is less inclined to share information about its long-term mineral strategy. It will make this information less available to the Chinese public, while also imposing additional barriers to foreign access.
There is probably little European countries can do to bring about greater transparency in Chinese mineral resource planning. The Chinese state’s hesitancy to disclose information about plans for mineral resources and high-tech sectors likely stems from two primary concerns: First, its worries about the potential for western criticism of China’s industrial policy (as happened with Made in China 2025). Second, its fears about the possibility that the information in these plans could help the West to chip away at China’s competitive advantage in these domains. This mindset is unlikely to change for the foreseeable future. The heightened emphasis on security and de-risking in Western countries – which Chinese leaders view with suspicion – is likely to further strengthen the trend towards non-transparency in Chinese policymaking.
So, what can European policymakers do? First, when Chinese leaders criticize Europe’s de-risking policy as protectionist, European policymakers should point out that China’s lack of transparency heightens uncertainty, thus giving an additional rationale for this de-risking. Second, policymakers should increase de-risking. The heightened secrecy makes it more challenging for European governments and businesses to assess the rationale behind China’s recent export restrictions on key materials. Hence, it would be wise for them to accelerate de-risking measures, including preparations for worst-case scenarios.
