Sweden graphite and China are an unlikely combination for the topic of a blog, but the story is an example of how the Chinese Communist Party control is entwined in all aspects of the country’s trade and politics. Admittedly, we all know that, but it’s good to be reminded occasionally of how pervasive this control actually is.
Northvolt, a Sweden company, is one of the most competitive lithium battery manufacturers in Europe. It is expanding and, supported by European subsidies, is building more factories in the Common Market.
Graphite is one of the main ingredients in the production of lithium ion cells, and China supplies almost 60% of the world’s natural graphite, and virtually all of the man-made product.
In early 2020, Northvolt was suddenly unable to obtain graphite from their suppliers in China. The change was rapid and unexplained. It threatened not only Swedish industry, but the whole European lithium battery production initiative. On investigation, Northvolt discovered there was no actual ban on graphite exports from China to Sweden, but their previous suppliers suddenly couldn’t help them.
China is notorious for vindictive trade behavior when countries, or people within countries, say or do anything the Beijing regime doesn’t like. Banning coal and lobster imports from Australia, after unfavorable press about China there, is just one recent example of this malevolent behavior. The Swedish authorities first thought that the sudden change in graphite availability was the result of an award given to Gui Minhai by a Swedish free-speech advocacy group PEN; Gui Minhai is a Swedish citizen, and Chinese dissident, who is imprisoned in China. The real reason, discovered later, was more insidious and dangerous.
As graphite exports to Sweden have slumped, China’s overall battery, and electronic vehicle, investments in Europe, have soared. In Hungary, China’s top battery manufacturer, CATL, poured $8 billion into a factory last year. Similar, if smaller, factories are being built in Poland. In addition, graphite imports from China in those countries have skyrocketed. China is also building Europe’s largest factory for manufacturing anodes, another essential component of lithium batteries, which the Swedish battery factories will buy, if that factory is allowed to sell to them by Beijing. It is difficult not to see this as an attempted usurpation of the whole of the European lithium battery production initiative.
It’s China’s modus operandi, aimed at undermining local industry to the point of its extinction, bringing in Chinese controlled equivalents, and then capitalizing politically on the influence such a takeover enables. These are the same tactics China has employed in Africa, Latin America, the Caribbean and many other parts of the world, all aimed at trade domination followed by political blackmail – the 747’s filled with Chinese businessmen, suitcases of cash in hand, that have landed in these jurisdictions over the past ten to fifteen years has largely gone unreported. That cash, and accompanying investments, have been distributed freely, but with the caveat that they can be recalled as loans if those jurisdictions don’t follow Beijing’s “line” in all international forums, like the United Nations. Obviously Europe is next on the list of China’s control plans.
I think it about time China was called out by the international community for these trade and political tactics. Xi is now essentially president for life and he can afford to follow these insidious tactics for years. As long as the rest of the world allows this process to happen, we will slowly be engulfed by the Chinese at all levels. That sounds like paranoia, I realize, but, as the old saying goes, “Just because you’re paranoid, doesn’t mean they aren’t out to get you”.
