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By directly acquiring mines, accumulating equity stakes in natural-resource companies, making long-term agreements to buy mines’ current or future production (known as “off-take agreements”), and investing in new projects under development, Chinese firms traded much-needed capital for outright control or influence over large shares of the global production of these resources. Despite China’s slowing growth and a major pullback in its foreign direct investment in other sectors, the government has maintained robust financial support for resource acquisition; mergers and acquisitions in metals and chemicals hit a record high in 2018.

China lacks significant reserves of three resources vital to its tech ambitions: cobalt, platinum-group metals, and lithium. It has successfully employed two strategies to secure control of them. One is driven by China’s state-owned enterprises (SOEs), which use development finance and infrastructure investment to embed themselves in higher-risk countries, establishing close ties with government leaders. The second is investment by state-linked private firms in market-based economies. Both strategies have shown agility and an ability to effectively adapt to local circumstances to achieve the same end.

Chile is home to 57 percent of the world’s known lithium reserves, the world’s largest known concentration, and SQM controls roughly half the country’s production

DRC is home to nearly two-thirds of the world’s cobalt production and half of its known reserves. Those resources are the prime target of investors for the booming battery industry. Over a decade of steady engagement, China has staked out a dominant position by developing strong political ties and investing in production assets and related infrastructure

China’s SOEs and private firms have made at least eight major equity and off-take plays in platinum-group metals in the Bushveld Complex. Such investments in South Africa’s highly concentrated and strategic resource deposits have helped make metals the country’s leading source of export growth, with nearly 50 percent of its metal exports going to China—tying South Africa’s economic welfare directly to Chinese investment.

the three countries where nearly 90 percent of global lithium production and more than three-quarters of the world’s known lithium reserves are located: Chile, Argentina, and Australia. In just six years, China has come to dominate the global market: More than 59 percent of the world’s lithium resources are now under its control or influence

China now owns or has influence over half of the DRC’s cobalt production, and has a massive stake in its mining industry. Six months ahead of the presidential elections, the event also sent a strong message to candidates about China’s deep investment in copper and cobalt mining—which constitutes 80 percent of the DRC’s export revenue and thousands of jobs—and its capacity to influence the future of the DRC’s economy

Natural resources are abundant in China; it is the No. 1 producer and processor of at least ten critical minerals and metals that are essential to high-tech industries and upon which China’s commercial and strategic competitors depend. To reinforce its strength, Chinese firms are acquiring mines and output from the next-largest producers and reserves, giving China both an economic edge in the next high-tech industrial revolution and increasing geopolitical power.

In a cash-strapped industry, Chinese firms are financing mine expansion and new development in exchange for a guaranteed supply of lithium in both mature and emerging markets. In Argentina, where President Mauricio Macri is eliminating mineral export taxes, reducing corporate tax rates, and allowing profit repatriation, China is establishing a dominant position in the nascent sector with “streaming deals,” which provide development capital in exchange for future lithium yields to help projects get off the ground. Chinese firms, led by Ganfeng, have stakes in 41 percent of the country’s major planned projects that account for 37 percent of Argentina’s reserves. This raw-material strategy is already coming to fruition: Lithium export volumes from Argentina to China rose nearly fourfold from 2015 to 2017, and China has secured access to the country's lithium for the longer term.

This same strategy, combined with asset acquisition, has also been successful in Australia, whose proximity to China, significant lithium reserves, and broad political support for mining investment have attracted Chinese investment. Tianqi and Ganfeng have established stakes in 91 percent of the lithium mining projects underway and 75 percent of the country’s reserves, including some of the world’s largest.

Though the final agreement included restrictions on Tianqi’s board and committee participation and its access to SQM’s sensitive data, Tianqi’s equity position still confers considerable influence over SQM.

Perhaps the best-known example both of China’s natural-resource dominance and its willingness to exploit it is rare-earth elements, a group of 17 elements that (despite their name) are commonly found, but rarely in concentrations that can be economically extracted. They are important materials for the defense, aerospace, electronics, and renewable energy industries. Over the past two decades China has produced more than 80 percent of the world’s production of rare-earth elements and processed chemicals. In 2010 it cut off exports to Japan amid rising tensions over the East China Sea, and the following year it imposed export quotas that threw governments and manufacturers into a panic. But with the exception of Japan, the attention to this critical vulnerability was short-lived, and little action was taken by other countries reliant on imports to diversify their resources or develop minerals action plans of their own.

China declared rare-earth elements a strategic resource in 1990 and prohibited foreign investment in the sector. Six state-owned enterprises control the industry, and the government cut production quotas in 2018 by 36 percent. With global demand for rare-earth elements projected at a compound average growth rate of more than 17 percent to 2025, a supply crunch is likely approaching—and China is already securing other nations’ supplies

While Russia strictly limits foreign participation in rare-earth element development, Chinese firms have accumulated off-take agreements and stakes in rare-earth element mines in Australia and Brazil

in 2017, China’s Shenghe Resources and two U.S. private equity firms acquired the sole U.S. and North American rare-earth element producer and processor, Molycorp, and its idled mining operations at Mountain Pass, California.

In 2016, China’s Yellow Dragon Holdings Ltd. co-invested with Bushveld Minerals, the primary vanadium developer in South Africa’s massive Bushveld Complex, to acquire Strategic Minerals, which owned the Vametco vanadium mine and plant. Yellow Dragon subsequently increased its investment in Bushveld Minerals and has become the fifth-largest shareholder. The holdings deepen China’s influence over South Africa’s vanadium resources and its role in the country’s emerging high-tech sector

China’s position is even stronger in graphite, a crystalline form of the element carbon whose high conductivity makes it a major component in electrodes, batteries, and solar panels, as well as industrial products such as steel and composites. For the last 20 years, China has been the leading global supplier of graphite, representing nearly 70 percent of the world’s production in 2018 and 24 percent of its reserves. While synthetic graphite, which is produced from petroleum coke, is an alternative, unfavorable economics constrain its use

New projects are concentrated in Mozambique, where the world’s largest graphite mine and fourth-largest known reserves are located. Already, Chinese firms have secured off-take agreements with the three major developers in Mozambique for the majority of their graphite production, and they are financing new development.

Japan is 90 percent reliant on China for its graphite

This resource consolidation could determine whether China is able to overcome the last major hurdle to achieving its ambitions: a competitive semiconductor industry.

Semiconductors can be pure elements or compounds and altered with impurities to improve their conductivity. Several materials are now being used to improve speed and performance, including rare-earth elements, graphite, indium, gallium, tantalum, and cadmium. China is the dominant producer of five out of the six, controls more than 75 percent of the world’s supply of three, and is consolidating control over them all

Should China succeed technologically, its capacity to scale production and flood markets (as it has already done with solar panels and wind turbines) has serious implications not only for leading semiconductor producers, but also for national security, if Chinese-manufactured chips are embedded in the devices upon which our data-driven lives, our economies, and our defense systems increasingly depend. While government and industry officials have started to restrict semiconductor sales and scrutinize Chinese acquisition of technology firms—e.g., the United States’ temporary ban on selling semiconductors to ZTE, or the recent flare-up over Huawei —such moves are strengthening China’s resolve to develop its domestic industry. More attention should be paid to its efforts to consolidate critical raw materials and the computing power they confer.

In April, U.S. government officials announced plans to meet with lithium industry leaders and automakers with the intention of developing a national electric-vehicle supply chain strategy. It is a start.

While much has been written about Chinese overfishing, it’s only recently become possible to document its vast extent, thanks to new satellite technologies such as those providing data to Global Fishing Watch. The same tracking technology that is used to prevent vessels from hiding or circumventing sanctions shows that China’s fishing fleet appears engaged, often illegally, in the effort to haul in as much seafood as it can, as fast as it can, in as many places as it can—with little regard for how its practices affect malnourished people or diminish the stocks of their fish.

China’s yearly bill for fisheries subsidies—of which 94 percent covers shipping fuel—comes to $5.9 billion. That’s about $347,000 per vessel per year, far more than any other major fishing country. European Union vessels, also considered highly subsidized, receive only about $23,000 a year

its record contains little in the way of sustainable fishing. Its own coastline, once among the richest in the world, has been more overfished by its 300,000-strong domestic coastal fleet than the waters of almost any other nation, with less than 15 percent of the original fish biomass remaining

Some 250 Chinese vessels fish for squid just outside Argentina’s 200-mile EEZ, sometimes dashing into Argentina’s waters illegally. When a Chinese jigger intruded in 2018, an Argentine warship pursuing it was nearly rammed by three other Chinese jiggers. “It’s literally a war,” said Milko Schvartzman, a former Greenpeace campaign manager and fisheries expert who estimates the illegal Argentinian fishery at $1 billion a year. “I have no doubt this will end in tragedy.”

China’s South Atlantic fishing fleet is based in Montevideo, the capital and main port of Uruguay, Argentina’s northern neighbor. Uruguay seems to have given China and its fishing fleet a free hand

China’s 1.4 billion people not only consume 38 percent of global fish production, but indulge in one of the highest per-capita consumption rates of fish and seafood, both wild and farmed, in the world—37.8 kilograms per person per year, up from only 7 kilograms per person per year in 1985, according to figures provided by China to the U.N. Food and Agriculture Organization.

The Europeans, in particular, are also involved in a lot of illegal fishing, said Vanya Vulperhorst, director of Oceana’s campaign against illegal fishing, often using boats with non-European flags to get around the rules. The illegal market in Mediterranean bluefin tuna, for example, is twice the size of the legal one, according to Europol.

In Mozambique, the Chinese were more successful. In 2017, they effectively took over the port of Beira, doubling its capacity so it could accommodate over 100 trawlers

The Mozambican Channel, between Madagascar and Mozambique, had been relatively unfished, and the Chinese fleet has been able to catch over 60,000 tons a year of large, high-quality bottomfish like seabream and groupers, all of which go to China. “They pay the government a pittance for the right to fish,” Failler said. “The locals now complain they aren’t catching anything anymore.”

in northwest Africa, the Chinese built around 20 fishmeal plants to process sardinella, a once-abundant and highly nutritious mackerel-sized fish, into feed for aquaculture and poultry. That industry has created a similar situation as in North Korea: During the winter dry season, smoked sardinella constituted the main source of affordable protein for the region, one of the poorest in the world. In Gambia, Chinese companies operate three fishmeal plants built five years ago and suck up so much sardinella that the local supply is reduced to a trickle. “It’s devastating,” said Mustapha Manneh, a Gambian journalist. “Gambians depend on this fish for their daily meal.” In Kartong, where he lives, he says the price has risen five-fold. Further inland in Koina, where the country reaches into the arid Sahel region, sardinella prices have risen tenfold. Fishing in the Gambia river instead can’t compensate for the loss of sardinella. “It is dangerous because there are so many hippos,” Manneh said. “The destruction cannot be overemphasized.”

90 percent of fishmeal is made from perfectly edible fish like sardinella

Half the global catch, much of it taken from or near the waters of poor countries, is then turned into fishmeal to grow fish like salmon, which are consumed in rich countries.

China has been paying fishermen to cast their nets around the Paracel Islands since the 1970s and the Spratlys since the 1980s

China is the only country with a strategic fishing fleet. Of the crew on the vessels operating in the South China Sea, Poling said “either they’re fishers paid to go fish somewhere, and that’s the only reason they do it, or they are officially in the militia, which means they never fish—they just use fishing boats to monitor other fleets, run supplies, or ram other boats.” Pauly, the fisheries scientist, said that “no one else does this except in war.”

There, the Chinese not only make up 40 percent of the foreign fleet, but have also drawn attention with the high number of dead crew members they have been reported to bring in—about one a month. “Conditions on their boats are horrible, some of the worst in the world,” Schvartzman said. “Sometimes they dump the bodies at sea, but usually they don’t because the crew would rebel.”

At the World Trade Organization, talks are underway to reduce fishing subsidies, with an agreement due by the end of the year