Reliance on China for minerals and industrial inputs, manufactured goods and to a lesser extent emerging technology is driving Western governments to urgently develop national strategies for securing their supply chains.
The US, as the second largest mining economy in the world, can afford to drive a global effort to decouple from China. And in Asia, the electronics industries of Japan, South Korea and Taiwan are so exposed to potential export restrictions that Chinese-free supply is increasingly viewed as a necessity.
But for the UK, total separation from China is not the best course of action. The UK cannot afford to subsidize industry to secure what relatively little critical mineral input it needs. And UK registered and listed companies benefit considerably from their relationships with China – for sales, financing and shareholders, technology transfers and shared infrastructure.
The likelihood of sustained Chinese weaponization of UK supply chains is also uncertain. Were Beijing to do so, it would amount to a kind of ‘mutually assured destruction’ dynamic: China’s export-led growth has been the central tenet of its economic development, and Beijing does not want to alienate export markets.
The UK therefore needs a critical minerals approach for China that is rooted in market realities, understands national requirements, and acknowledges genuine vulnerabilities. It must reflect the ‘art of the possible’, outlining a clear framework on constructive industry engagement, coupled with clear limitations on such engagement – and diplomatic cover to manage political and commercial risks.
The UK launched its own critical minerals strategy in November 2025, which provides a solid foundation. But some areas of risk require better guidance, and clearer policy. And the strategy makes scant reference to the geopolitical challenges emanating from the concentration of processing in China.
Competition and co-existence
Economic competition between China and the UK is predominantly in high-end manufacturing, and some areas of chemical and pharmaceutical production. Beyond this, there is a persistent overall trade deficit with China, amounting to £42 billion across goods and services. Total bilateral trade stands at £104.9 billion.
UK consumers do not want to pay higher prices for goods made without Chinese minerals. They may be willing to occasionally pay a patriotic premium for Welsh lamb. But they would likely not pay significantly higher for a ‘made in England’ phone or laptop.
And though UK high tech industries are reliant on access to critical minerals, it is not in their concentrated or refined form. Instead, their greatest exposure is in access to semi-manufactured parts coming from third party countries, who in turn are reliant on Chinese mineral processing.
The relationship is not only one of dependence. There are areas where the UK and China cooperate on mineral supply chains to the advantage of both, particularly in the private sector.
The UK stands to benefit from a global minerals race due to the many large mining firms listed or registered in the UK. China is a dominant customer for them, accounting for 50-60 per cent of revenues. This trade is of great benefit to the UK.
Shared ownership of companies or operations is another area of cooperation. In 2000, Chinese investors held stakes in an estimated 40 mines abroad. By 2022 this had risen to an estimated 1,250 mines. Several are on shared deposits or are Western mining firms in which China holds a stake, such as Rio Tinto.
Beijing holds a stake in 16 of the top 100 non-Chinese mining firms by market capitalization. And some of the world’s largest emerging projects to mine copper, iron ore, and bauxite are only possible due to Chinese financing, cooperation in operations, and offtake and sales.
Furthermore, China’s Belt and Road Initiative has financed and developed infrastructure like the Lobito Corridor, which runs through DRC, Zambia and Angola. UK companies use such links to transport product to market.
Such cooperation is essential to UK industry. But it also indicates that the UK’s main exposure to risk in supply is in the private sector: which the UK’s critical minerals strategy emphasizes as crucial.
Parameters and limitations
Implementation of the UK’s 2025 strategy requires guidelines and support for companies on how to productively engage in a responsible manner. There is also a need to address the lack of clarity on how political relationships impact on commerce.
Foreign investment in UK firms is a key potential vulnerability. The UK does not restrict foreign investment in its firms, beyond constraints on sensitive sectors dealing with national security, and nor should it.
But it can learn lessons from other critical minerals producers with Chinese shareholding: for instance, it could seek to limit the voting rights of Chinese entities and their influence over corporate governance and mineral flows. Such measures can help ensure that Chinese shareholding cannot force UK-listed mining firms to comply with Chinese export controls.
Other important areas require guidelines, for instance risks emerging from shared infrastructure. Mining projects in remote and less developed locations often share railways for exporting their product. Some countries have instructed their mining companies not to use infrastructure provided by global rivals like China. But such measures have only created an uneven playing field: state-owned entities have had to comply, but private operators often carry on.
It would be more useful for the UK government to provide guidelines and advisory documents for best practice in this area and reassure companies they will not be penalized for using supply routes that cross geopolitical fault lines.
Data protection is another pressing concern. The mining industry is becoming more digitized, with increasing amounts of automation, and data collected on production, trade, quality and quantity of minerals. Much of this is commercially sensitive, especially concerning information on output or quality, technology, and skills.
Protected data can be highly exposed on shared operations and infrastructure, for example where border scanning systems use Chinese technology that could send data back to Beijing. Guidelines and protections for UK firms operating in such conditions would be useful.