A rare earth mine in Baoshan, southwest China’s Yunnan Province Photo: VCG
Australia is expected to become more selective about who it lets invest in its growing critical minerals industry. Experts said the move is aimed at cutting China out of its critical minerals sector, citing so-called national security concerns, and Australia’s attempt to join the US to move towards decoupling is not for the bilateral relationship advantageous.
Australia Treasurer Jim Chalmers has asked his department to work with the Foreign Investment Review Board and a range of other stakeholders to conduct a review of foreign investment in sectors like lithium and rare earths, he said at a conference in Sydney on Friday, Bloomberg reported.
“We need to be more assertive in promoting investments that clearly align with our longer-term national interests,” Chalmers said in his speech.
While Chalmers did not directly identify Chinese investment as a target of the review, the remarks echoed a speech by Australia’s Resources Minister Madeleine King, who said earlier this month that China’s dominance in the market has created “inherent vulnerabilities of concentrated supply chains.”
Australia’s Resources Minister said Western countries are unlikely to end their reliance on China for critical minerals, including rare earths, anytime soon, but Australia and the US will continue to work together to boost investment in those minerals and try to offer alternatives.
Australia’s latest move comes as China-Australia trade relations take a major turn as they emerge from the cold.
In the first 10 months of 2022, imported wheat from Australia accounted for 63 percent of China’s total wheat imports, up from 28 percent in 2021 and 15 percent in 2020, Bloomberg reported, citing data from China Customs. China’s wheat imports from Australia in the first 10 months of this year also hit the highest record by tonnage since 2004.
China is the No. 1 export market for Australian iron ore, with more than 60 percent of it going to the Chinese market, making the sector the backbone of Australia’s economy.
The direction of China-Australia ties depends on Australia’s attitude and concrete actions, Bai Ming, deputy director of the International Market Research Institute of the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday.
At this critical moment, when Sino-Australia relations are taking a major turn as they emerge from the cold, it will not be conducive to improving Sino-Australia relations if Australian politicians follow the US in imposing restrictions on certain industries, said Bai.
In addition, these artificial decoupling attempts also harm the normal functioning of relevant trade and economic cooperation, Bai added.
“China has relatively strong technology in mining and smelting rare earth minerals. If Australia is determined to decouple from China, it will increase manufacturing costs,” Bai said.
Chinese Foreign Ministry spokesman Zhao Lijian also said Nov. 1 that countries with critical natural resources must play a positive role in keeping relevant industrial and supply chains safe, secure and stable. Countries must collectively fulfill their due responsibilities in the global supply of relevant minerals and ensure the normal functioning of relevant trade and economic cooperation.
In the meantime, no one should use economic affairs as political tools or weapons to destabilize global industrial and supply chains or to defeat the existing world economic system. China will remain an integral part of the international industrial division of labor and cooperation, and strive to keep the world economy and international trade stable and diversified, the spokesman said.
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