President Biden’s infrastructure package, which Senate Majority Leader Chuck Schumer wants to pass this week, includes $7.5 billion for transitioning to electric buses and ferries and incentives for solar power. In 2019, about one-third of the polysilicon, a material used to construct solar panels, came from the Xinjiang province of China, where human rights of Uyghur Muslims are reportedly being violated. The transition to electric buses and ferries that Biden wants also benefits China because China produces more than 70 percent of all electric-vehicle batteries compared to 9 percent produced in the United States. Further, China controls over 80 percent of the critical minerals used to create batteries. The Democratic Republic of the Congo where China owns eight of the 14 largest cobalt mines accounting for about half of the country’s output, produces 70 percent of the cobalt needed using slave and child labor.

In order to stop the infrastructure bill from aiding China, several amendments were introduced. One such amendment would prevent federal funds from being spent on products or resources made from forced labor. The amendment specifically targets China’s dominance of the solar-panel market. In July, the Department of Labor recognized Chinese polysilicon as a resource “produced by child labor or forced labor.” Similar amendments would prohibit federal funding from being used to buy “Chinese-made low-emission buses, ferries or vehicles.”

China Dominates Global Solar Markets Using Cheap Coal

China’s low-cost, coal-fired electricity has provided the country’s solar-panel manufacturers a competitive advantage, allowing them to dominate global markets. Polysilicon factories refine silicon metal using a process that consumes large amounts of electricity, making access to inexpensive power a cost advantage. To support polysilicon manufacturers, China built coal-burning power plants in Xinjiang and Inner Mongolia. Since electricity is 40 percent of the operating cost of manufacturing polysilicon, cheap coal-fired electricity is a goal of its producers. China’s cheaper polysilicon production has forced the shutdown of several factories that use power sources with lower carbon emissions than Chinese producers. Wacker Chemie AG, the West’s largest producer of solar-grade polysilicon, pays up to four times as much for power at its factories in Germany compared with Chinese producers in Xinjiang.

China is home to most of the companies that slice polysilicon into wafers, package the wafers into cells and assemble the cells into panels. Because of U.S. tariffs on Chinese solar panels and cells, Chinese companies have set up factories for these parts in other countries. JinkoSolar, a Chinese firm, built a panel assembly plant in Florida to supply NextEra Energy, one of the largest U.S. renewable-energy companies. But the wafer and polysilicon are from China. Italian energy company, Enel SpA, is planning to expand its solar-panel factory in Sicily, one of the few left in Europe, but the factory will also rely on silicon wafers from China.

As part of its trade dispute with the United States, China placed tariffs on U.S. polysilicon, which blocked U.S. producers from selling raw material to Chinese wafer factories that have over 95 percent of global capacity and left them with almost no buyers for their product.

China Is the Leader in Lithium-Ion Batteries

China is the leader in lithium-ion batteries and is targeting an 80 percent global market share in electric-vehicle batteries and motors. In the electric vehicle market, the battery and the software represent over half the value of the car—a market that China dominates. Battery manufacturing requires access to lithium, cobalt and other essential minerals, plus the recycling of spent batteries.

In 2019, Chinese chemical companies accounted for 80 percent of the world’s total output of raw materials for advanced batteries. China controls the processing of pretty much all the critical minerals–rare earth, lithium, cobalt, and graphite. Of the 136 lithium-ion battery plants in the pipeline to 2029, 101 are based in China. In addition to rare earths, the manufacturing of lithium-ion batteries depends on key materials like graphite, cobalt, manganese and nickel. In 2019, China produced 64 percent of the world’s graphite, having 24 percent of the world’s reserves.

China has only 1 percent of the world’s cobalt reserves, but has over 80 percent control of the cobalt refining industry, where raw material is turned into commercial-grade cobalt metal. China is among the five top countries with the most lithium resources and it has been buying stakes in mining operations in Australia and South America where most of the world’s lithium reserves are found. China mines only 6 percent of the world’s manganese, but refined 93 percent of it in 2019. Most manganese supply is concentrated in South Africa, followed by Australia and Gabon. North America produced zero manganese.

Unlike the other minerals, the nickel mining industry is fairly evenly spread around the world and 35 percent of the chemical processing is outside of China; China controls 65 percent. Electric vehicles account for about 7 percent of overall nickel consumption today, but that would skyrocket under plans to electrify vehicles as proposed by Joe Biden.


Biden’s infrastructure bill benefits China which dominates the global market for solar panels and for electric vehicle batteries. Interestingly, China stopped subsidies to new solar on August 1 because of massive debt accumulated due to the generous subsidies. Amendments are being added to the infrastructure bill to try to remove China’s benefits by restricting the use of products made with forced and slave labor. But as long as the over 2,700 page bill has money and incentives allocated to green energy, China will benefit because it has spent decades working to establish its global super-position in these endeavors.

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