Thank you, Mr. Chair.
Good afternoon, ladies and gentlemen of the Standing Committee on Industry and Technology.
Thank you for inviting me to testify before you today.
I will give my presentation in English, but I will be happy to answer your questions in both official languages.
First, let me speak about China's economic development policy. Since the early 2000s, China has encouraged its state-owned companies to invest abroad to secure long-term supplies of oil and natural gas and minerals, including critical minerals. I would note that the majority of the some $90 billion invested by China in Canada is related to these commodities. To be fair, I should add that many communities have benefited from these investments.
As we heard previously, China is pursuing a dual circulation strategy whereby it wants to become less dependent on foreign technology and products—clearly the goal of the made in China 2025 policy, which aims at increasing China's self-reliance in 10 key technological sectors—but also to become a net exporter of high technology. As we have heard, this includes new vehicles, electric batteries and renewable energy. This policy has increased the need to secure access to critical minerals, including lithium.
To achieve these goals, China supports its state-owned enterprises by providing subsidies, tax breaks, cheap loans and so on. We also know that it does not play by international trade rules. For instance, there is no level playing field for foreign companies in China. Many sectors remain closed to them, or access is severely limited. China also uses trade as a weapon, as we saw after the arrest of Meng Wanzhou. Canada lost $4.5 billion in exports to China in 2019. More recently, Australia has been the victim of unjustified tariffs in five sectors, because it asked for a full investigation on the origin of COVID-19.
That being said, Canada is looked at by China as a reliable supplier of minerals. Our exports to China in 2021 will likely have established a new record, as at the end of November they were up 17.5% year on year to $26.6 billion, which is just $1.12 billion below the previous record, established in 2018. This is thanks in large part to increased exports of metallurgical coal, copper and iron ore. I would also note that many Chinese private mining companies are listed in Canada, as it is easier to raise money here than in China.
Now let me turn to the acquisition of Neo Lithium by the Zijin Mining Group. The key question for me is where is Neo Lithium active? It has no mine in Canada, but it has one mine project in Argentina. I must say that it is not obvious to me to see how Canadian national security would be directly threatened by this acquisition. As well, we have a free market policy, and companies are allowed to manage their business as they wish.
Should the government have been more concerned about this matter, about this acquisition? I think this raises a more general and important question: What is the policy of the Canadian government to support the production of critical minerals in Canada, and what concrete actions can be taken with our allies, for instance, under the U.S.-led energy resource governance initiative or the Canada-U.S. critical minerals action plan? That should be where we need more attention and more efforts.
Thank you for your attention. I would be happy to answer your questions.