China is diversifying its supply of critical natural resources a move that will shore up Beijings ability to weaponize trade against its geopolitical rivals, according to a newly published report by risk consultancy Verisk Maplecroft. If China has a soft underbelly, it is its high dependency on foreign natural resources, read the report released on Thursday. China is a large consumer of major commodities including crude oil and iron ore. But the country relies heavily on imports to meet its domestic demand for those commodities. One way the country is diversifying its import sources is by buying stakes in overseas companies, said Verisk Maplecroft. Doing that will increase the proportion of Chineseowned resources in the countrys total imports, the report said.

As an example, the consultancy said the number of Chineseowned base metals and gold companies in Oceania rose from zero in the year 2000 to 59 last year. It represented around 22.6 of total foreign ownership in such companies, the report showed. Oceania is a region that includes Australia, Papua New Guinea, New Zealand, Fiji and numerous island nations.

Chinas largest supplier of iron ore last year was Australia, an American ally that was recently hit by Beijings trade restrictions. Australia shipped a monthly average of 60.86 million tonnes of iron ore to China in 2020, accounting for more than 60 of overall Chinese imports of the commodity, Refinitiv data showed. Thats why China has been strengthening trade…