Fact Check: "China manipulates commodity prices to keep them artificially low for Western companies."
What We Know
The claim that China manipulates commodity prices to keep them artificially low for Western companies is supported by several credible sources. According to a commentary by Gracelin Baskaran, China engages in market manipulation by flooding the market with excess supply, which drives prices down. This strategy has forced mining operations in countries like the United States and Australia to shut down due to unprofitability, as evidenced by significant declines in prices for cobalt, nickel, and lithium between 2022 and 2025 (source-1).
Furthermore, the concept of "new mercantilism" suggests that China employs state policies to maintain favorable trade balances, which includes manipulating commodity prices to maintain competitiveness against Western firms (source-2). This manipulation has systemic implications, as it creates vulnerabilities in Western economies that rely on critical minerals, which are essential for various industries, including automotive and technology (source-6).
Analysis
The evidence supporting the claim of China's manipulation of commodity prices is substantial. The commentary by Baskaran highlights specific price drops in essential minerals, indicating a deliberate strategy to undermine competition from Western companies (source-1). The dramatic price declines—59.5% for cobalt and 73.1% for nickel—are particularly alarming, as they have led to the closure of Western mining operations that cannot compete with artificially low prices (source-1).
Moreover, the notion of "new mercantilism" discussed in the second source provides a broader context for understanding China's economic strategies. The article outlines how China has historically manipulated its currency and trade policies to maintain an advantageous position in global markets (source-2). This manipulation is not limited to commodities but extends to various sectors, reinforcing the idea that China's economic policies are designed to benefit its domestic industries at the expense of foreign competitors.
While some sources argue that China's actions are a response to international pressures and trade tensions, the overarching narrative remains that these strategies have detrimental effects on Western economies (source-3). The reliability of these sources is strong, as they come from reputable institutions and publications that analyze economic trends and policies critically.
Conclusion
The claim that China manipulates commodity prices to keep them artificially low for Western companies is True. The evidence indicates that China's market strategies, including flooding the market with excess supply and maintaining low prices through state policies, have significantly impacted the competitiveness of Western firms in critical mineral markets. This manipulation not only affects pricing but also poses long-term risks to supply chain security for industries reliant on these essential materials.
Sources
- Building a New Market to Counter Chinese Mineral Market Manipulation
- The new mercantilism: Tariffs and currency manipulation in an era of U.S.-China tension
- Weak market for critical minerals seen dampening Western efforts to counter China
- China declares war on commodity price manipulation
- China shows how Western governments should stockpile minerals
- China's Critical Minerals: Global Supply Chain Dominance
- The Contentious U.S.-China Trade Relationship
- The “necessary evil” in Chinese commodity markets
