In a bid to secure its resource self-sufficiency and strengthen its high-tech supply chains, China has ramped up state support for mineral exploration, particularly as competition with the US intensifies. The Chinese government has increased subsidies and expanded access for mineral exploration across various provincial-level regions, including major resource-rich areas like Xinjiang. According to an analysis by the Financial Times (FT), this surge in funding is part of a broader effort to bolster China’s control over critical minerals that are essential for technologies like semiconductors, electric vehicles, and robotics.
The move comes at a time when the control over strategic minerals has become a point of contention between the US and China. As global superpowers vie for dominance in industries that rely on these minerals, China is already the world’s leading producer of 30 out of 44 critical minerals, as tracked by the US Geological Survey. Beijing’s renewed focus on mineral exploration and extraction is part of a larger strategy to minimize reliance on foreign resources, which President Xi Jinping has emphasized since he took office in 2012.
China’s increased mineral exploration efforts are designed to ensure the stability of its industrial and supply chains, addressing both domestic energy needs and strategic mineral requirements. As Xiong Zili, director of China’s Ministry of Natural Resources, noted, major breakthroughs in exploration have significantly enhanced China’s capacity to safeguard these critical sectors. The FT reports that the government has allocated over Rmb100 billion ($13.8 billion) annually for geological exploration since 2022, marking the highest funding in the past decade.
In response to growing US curbs on tech exports to China, Beijing has also taken steps to tighten control over the export of certain strategic minerals, such as gallium, germanium, and tungsten, which are vital to industries like chip manufacturing. These measures are part of China’s broader strategy to counteract US sanctions and secure its position in the global tech war. Cory Combs, an associate director at Beijing-based consultancy Trivium China, explained that while these state-backed subsidies might seem wasteful from a market perspective, they are justified from a geopolitical and economic security standpoint.
Xinjiang, a region known for its significant mineral resources but also infamous for its human rights issues, has seen a dramatic increase in subsidies for geological exploration, with funding rising from Rmb150 million in 2023 to Rmb650 million in 2025. Additionally, the region has issued a record number of mining exploration rights. China has also been aggressively pursuing control over critical mineral resources overseas, having lent $57 billion via state-backed financial institutions to secure mining and processing rights for copper, cobalt, lithium, and rare earth elements in developing countries.
Under Xi’s leadership, China has enacted policies to protect these strategic resources, including blocking foreign companies from investing in rare earth, tungsten, and uranium mining and requiring state approval for foreign investments in these sectors. Last year, China’s National People’s Congress introduced legal mechanisms to facilitate mineral exploration on farmland, further solidifying Beijing’s control over its critical resources.
