China Buys Oil, Food, and Metals on a Massive Scale

From above, China’s oil storage site in Dongjiakou looks like a tray of giant baking molds. As the tanks fill with crude, their floating lids rise, turning the cylinders into dome-shaped structures that resemble cakes. In recent months, activity there has surged: since mid-January, reserves have grown by 10 million barrels to reach 24 million. The state-run complex, the largest on China’s coast, is less than two years old but already more than half full—at 56%.

The buildup of oil reserves is part of a broader strategy. Since early 2024, when it became clear that Donald Trump might return to the White House, Chinese authorities have been stockpiling fuel, food, and metals to reduce vulnerability to possible sanctions and tariffs. The effort accelerated after Trump imposed steep duties on Chinese goods in the spring—and it continues at full speed as the two leaders prepare to meet on October 30.

Some observers see the campaign as excessive caution—or even as preparation for an invasion of Taiwan. Whatever the motive, it is making China less susceptible to external pressure and strengthening its hand in trade talks. But the policy also carries costs: by becoming the world’s largest commodity importer, China is distorting global markets, spending vast sums, creating new dependencies, and exposing itself to fresh risks.

China has good reason to worry about its energy security. Despite the rapid growth of electric-vehicle sales, the country will consume about 16 million barrels of oil a day for years to come—roughly three-quarters of it imported. Over the past decade, natural-gas purchases have tripled, driven by demand from heating systems and fertilizer plants. China also imports about half a billion tons of coal each year, which supplies 60 percent of its electricity generation.

Although China is a global hub for raw-material processing, it imports 85% of the iron ore needed for steelmaking, faces shortages of bauxite—the base material for aluminium—and buys 88% of its copper ore from abroad. To produce batteries, China depends on imported cobalt, nickel, and lithium. Rising incomes and changing diets have also turned it into a major food importer: it purchases four-fifths of the 100–120 million tons of soyabeans used to feed 430 million pigs, and 70% of the vegetable oil used in processing. No other country imports as much beef.

To reduce vulnerability, Chinese authorities are pursuing three strategies: boosting domestic production, building stockpiles, and diversifying import sources. The production drive began in 2019, when Xi Jinping launched a seven-year plan to expand the country’s oil and gas output. By scrapping several taxes, the government encouraged investment, and—contrary to expectations—oil production rose from 3.8 to 4.4 million barrels a day, while gas output increased by nearly 50%.

In 2025, amid low global oil prices, Chinese energy firms are cutting overseas spending but continuing to invest heavily at home. Gas output is expected to rise by 3–6% this year and next, while oil production will remain at record levels. Even coal—long dismissed as a “dirty” fuel—is back in favour: in May, the energy regulator approved the construction of new mines. In September, eight state agencies released a two-year plan to expand exploration of ten key metals, including copper, lithium, and cobalt.

The new projects will take years to materialise, so in parallel China is expanding its strategic reserves—the second pillar of its strategy. This is most visible in the oil market: according to analytics firm Kayrros, visible stocks have risen by 110 million barrels since February to a record 1.2 billion—three times the US level. A law adopted in January requires all energy companies to maintain their own strategic reserves. China is also buying oil from Iran, Russia, and Venezuela—countries under US sanctions—with shipments from these suppliers to Qingdao port reaching 590,000 barrels a day in September, an all-time high. Although Donald Trump threatened on October 23 to sanction countries purchasing oil from Russia’s largest firms, the impact remains uncertain: many Chinese refiners operate outside the dollar system.

Discussing China’s metal reserves is risky—it can land a person in jail—but analysts still see signs of a buildup. Tom Price of Panmure Liberum notes that metal imports have surged despite the industrial slowdown. He estimates that over the past twenty months China has accumulated volumes equal to 20% of annual copper demand, 50% for zinc, and 108% for nickel.

Not all resources can be stockpiled—they are either too rare, too perishable, or take up too much space. That is why China is aggressively diversifying supplies—the third lever of its strategy. Since 2022, Russia has been trying to boost gas exports to China. On October 23 the country delivered its eleventh shipment from the Arctic Yamal LNG-2 project, previously frozen by sanctions. In 2025 China is expected to receive a record 38 billion cubic metres of Russian pipeline gas, with another 50 billion to follow once the Power of Siberia-2 line is completed—an agreement Moscow claims was reached in September. Meanwhile, China is also increasing purchases from Malaysia and Qatar.

At the same time, Beijing is ramping up investment in overseas mines and infrastructure. In April, construction began on a railway to transport coal from Mongolia. Since 2024, Chinese copper companies have acquired nine foreign firms; three deals signed in 2025 were larger than all previous ones combined, notes consultancy CRU. One Chinese firm is reportedly negotiating to buy a substantial share of Chile’s power grid—a country that holds the world’s largest copper and lithium reserves. Meanwhile, Chinese nickel producers are expanding operations in Indonesia despite a sharp drop in metal prices.

The most striking shifts are in soyabean imports. American supplies, which accounted for a quarter of all purchases last year, have faced a 20% tariff since April. Since then, China has not bought a single batch of the new US harvest. Instead, it is importing record volumes from Brazil and substantial quantities from Argentina. Judging by futures prices, China has no intention of returning to large-scale US soyabean purchases in the coming season.

China’s sweeping campaign to hoard raw materials is transforming not only its own economy but global markets as well. Brazilian farmers are set to expand soyabean planting, while American producers are cutting acreage. China is becoming the world’s swing player in the gas market: by reselling liquefied fuel cargoes when prices are high, it undercuts the clout of major exporters. Its vast and opaque stockpiles make pricing even less predictable, while clandestine purchases of Russian oil and gas fuel a shadow industry of shipping and financing.

Most of these shifts work to Beijing’s advantage. Yet its race for resources carries clear costs. Chief among them are financial: China is buying oil even as analysts predict a glut and a $10–20 drop in prices per barrel next year. The country may be losing billions of yuan each month as a result. Refiners are also purchasing copper at a loss—the “treatment” fee they usually charge miners has turned negative, reportedly sustained by cheap state loans. Brazilian soyabeans are being sold to China at a hefty premium.

In some concentrated markets, China is merely trading one dependency for another. According to a NATO expert, its circle of food suppliers is now narrower than it was a decade ago. The country remains particularly vulnerable to weather shocks, political turmoil, or economic instability in Brazil, which has become its main source of meat, oilseeds, and sugar. The stockpiling strategy may be paying off for now, but it is hardly risk-free.