China’s rapid economic growth relies heavily on its extensive, yet complicated, natural resource base. The country’s immense size and varied topography result in a highly uneven distribution of resource wealth. This imbalance means China possesses global resource dominance in some areas while simultaneously facing severe domestic scarcity in others. China’s resource holdings position the nation as a central player in global supply chains for energy, technology, and manufacturing.
Primary Energy Sources
Coal remains the foundation of China’s energy profile, despite efforts to transition to cleaner sources. As the world’s largest producer and consumer, coal makes up over 50% of the primary energy mix and generates nearly 60% of its electricity. China holds the world’s third-largest recoverable coal reserves, predominantly located in northern provinces like Shanxi and Inner Mongolia.
Hydroelectric power is the largest source of clean electricity, leveraging the country’s vast river systems. Projects on the Yangtze River harness significant water flow potential, with hydropower contributing around 13% of the nation’s electricity generation. This reliance on large river basins exposes the power supply to seasonal drought conditions and environmental concerns related to dam construction.
China’s per capita reserves of oil and natural gas are comparatively low, estimated at about one-fifteenth of the world average. This domestic deficit forces the nation to be a massive net importer of crude oil and liquefied natural gas (LNG) for its transportation and industrial sectors. Despite reliance on foreign supply, the government has invested heavily in domestic gas infrastructure, and natural gas consumption has grown rapidly, now making up a single-digit percentage of the total energy supply.
China has also emerged as a global leader in deploying renewable energy technologies, particularly solar and wind power. The combined capacity from wind and solar accounts for a growing percentage of the electricity mix, contributing more than half of the global increase in both solar and wind generation. This investment has established China as the world’s largest manufacturer of solar panels and wind turbines, though high production rates occasionally lead to power curtailment in certain provinces.
Strategic Mineral Deposits
China’s mineral wealth provides a distinct strategic advantage in global high-tech industries. The country holds nearly half of the world’s total reserves of Rare Earth Elements (REEs), which are vital for electronics, defense systems, and green energy technologies. With reserves estimated at 44 million metric tons, China accounts for approximately 69% of global REE mine production, giving it a near-monopoly on processing and refining capacity.
These deposits are heavily concentrated in regions like the Bayan Obo Mining District in Inner Mongolia. Beyond REEs, China possesses globally significant reserves of several other industrial metals. The nation has a large, though often lower-grade, supply of iron ore, with proven reserves estimated in the tens of billions of metric tons, mostly concentrated in the Liaoning and Sichuan provinces.
China also holds substantial resources of bauxite, the primary ore for aluminum production, with reserves exceeding two billion metric tons located mainly in provinces like Shanxi and Guangxi. The country is a globally dominant producer of tungsten, a hard metal used in cutting tools and military applications. It also has notable reserves of antimony, molybdenum, and tin. The quality of these deposits varies; tungsten and molybdenum are often high quality, while iron and copper ores are frequently lower grade and more complex to process.
Essential Water and Land Assets
The distribution of water resources in China is fundamentally imbalanced, posing a continuous challenge to agriculture and urbanization. The North, which contains about 46% of the population and 60% of the agricultural land, receives only about 20% of the nation’s total water resources. This disparity between the water-rich South and the drier North has forced the construction of massive infrastructure projects.
The South-North Water Transfer Project (SNWTP) is the most ambitious response, designed to channel up to 44.8 billion cubic meters of fresh water annually from the Yangtze River basin to the northern regions. This multi-route undertaking is intended to alleviate chronic water shortages and curb the over-extraction of groundwater, which has caused water tables to drop significantly. The project has involved the resettlement of hundreds of thousands of people and represents one of the largest engineering feats of its kind.
China faces a persistent challenge in feeding its immense population due to the limited amount of land suitable for farming. Only about 11.5% of the total land area is arable, a percentage below the global average. This small fraction of land must support over 20% of the world’s population, creating intense pressure on agricultural practices.
The concentration of farmland primarily in the eastern monsoonal regions means that agricultural output is highly sensitive to regional weather patterns and water availability. Efforts to increase forest cover to combat desertification have also created a “reforestation paradox,” where increased vegetation has inadvertently led to reduced water availability in some arid regions due to higher rates of evapotranspiration.