The elements of power, p.21
The Elements of Power, page 21
By 2011, there were up to 140 million e-bikes on China’s roads, almost double the number of cars in the country. E-bikes were cheap to acquire (popular models ranged from fifteen hundred to three thousand renminbi—from $225 to $300 U.S. dollars at 2011 exchange rates), and they were cheap to charge. According to one estimation, e-bikes cost commuters as little as twenty-one U.S. cents a day to power, whereas commuting by car set drivers back around $4.16.
At the end of the decade, The New York Times reported that the e-bike industry was now worth $11 billion worldwide, calling it an “accidental transportation upheaval,” with nothing said about how important state support was for the industry in China. “For each mile traveled, electric bikes cause fewer emissions of the gases associated with global warming than do cars,” the Times reported approvingly, although it noted that lead-acid batteries came with some pollution concerns. (Lithium-ion technology wasn’t mentioned.) “Today, electric two-wheelers are so common in China that they account for 80% of all the greenhouse-gas emissions avoided by the use of electric vehicles—in the entire world,” the journalist Akshat Rathi wrote in Quartz. “China is now applying the lessons learned from its success in electrifying its two-wheeler fleet to building momentum in the electrification of its passenger cars.”
What China was doing with electric cars was even more ambitious than what it had done with bikes. Despite the capitalist sheen, the country still operated a centrally planned economy, and government programs were key to setting the direction of the country’s industry. “They brought on scale very fast,” Melsert said. “I think they focused on the lower-cost end of the market, you know, initially selling more domestically in China.” In 2009, the Chinese government launched an initiative called Ten Cities, Thousand Vehicles. True to its name, its target was for ten cities to each have a thousand electric vehicles on the road within three years.
The program was an example of what Chinese revolutionary leaders had called “crossing the river by feeling for the stones,” a sentiment endorsed by Deng Xiaoping, the Chinese premier who had opened China to private businesses. Deng’s selection of Shenzhen—the city where Wang Chuanfu established BYD—as the first special economic zone had epitomized this kind of experimental policy. In the case of the electric-car program, the stones would be the ten pilot cities, selected by state planners, each of which would launch a thousand electric vehicles by 2012. Elon Musk may have scoffed at BYD’s rival electric car in a Bloomberg interview in late 2011 (“I don’t think they have a great product,” he told the anchor Betty Liu), but Wang’s company, alongside CATL, was hungry for profit and inextricably woven into the fabric of the Chinese state. It was already crossing the river, and the other side was in sight.
Chapter 28
China’s Answer to Dr. Zee
By the end of the aughts, China had already decided to shift its focus from two wheels to four. The country’s efforts had barely been noticed in the West, where Teslas and Chevy Volts were getting splashy rollouts; people were more closely watching automakers in Japan, which had developed hybrids like the Toyota Prius.
When BYD showed its F6DM, a ferrous-battery-powered hybrid car, at the 2008 North American International Auto Show, in Detroit, the press “scurried off,” bored by what most people saw as a copy of a Honda Accord made by what they imagined to be a “small upstart Chinese automaker.” Had they checked the company’s filings, they would have seen that not only was BYD hardly “small,” but it was also rapidly accelerating at a speed that meant it would soon challenge traditional auto behemoths. BYD had grown its assets more than fourfold since 2004; the firm had a turnover approaching $4 billion and gross profits of almost $800 million. What’s more, the F6DM ran on a revolutionary new type of lithium-ion battery called LFP. Made from iron and phosphates, LFP would come to predominate in the auto industry a decade later. BYD said the car was “green tech for tomorrow.”
Matt Hardigree, who wrote for the auto site Jalopnik, was the only journalist who decided to stick around after the press conference. Wang Chuanfu, BYD’s chairman, invited Hardigree to hop into his new car. Technically, the journalist would write, it was the first-ever “test drive” of a BYD car in the U.S. Confusion reigned as Wang turned the car on, sped it up to ten miles per hour (“an uncomfortable speed in the middle of a convention center”), almost hit Hardigree’s videographer, and gunned it straight through a press conference on a race series for ethanol cars. “Dr. Chuanfu is China’s answer to Dr Z [sic],” Hardigree would later write. The stunt generated a few headlines and some amused chuckles, but an auto industry that was still addicted to petroleum quickly forgot about the Chinese car zipping around the convention center.
That was soon going to change. By 2011, only two years after the inception of the Ten Cities, Thousand Vehicles initiative, the plan had expanded to encompass twenty-five cities. The government had stated that it wanted five million electric vehicles on the road by 2020. Increased subsidies of fifty thousand to sixty thousand yuan ($8,000 to $9,600 in U.S. dollars) were offered for electric vehicles. The subsidies would be huge in Europe or the U.S., but for ordinary Chinese people who had always dreamed of owning a vehicle, they were gargantuan—around triple the annual disposable income of an urban Chinese family and around ten times that of a rural Chinese family. In 2014, the government went even further and exempted “new energy vehicles” from the country’s vehicle purchase tax.
The increase in Chinese electric-vehicle production was astonishing. In 2011, China produced only 8,368 electric vehicles. But that year, the government inaugurated its Twelfth Five-Year Plan. Among the plan’s objectives was the development of batteries and alternative fuels; it called for China to produce a million electric vehicles by 2015. Such a figure was only a little optimistic: 340,000 or so new-energy vehicles would be produced in 2015 alone, and year-on-year sales would increase by 223 percent. Three writers at the Stanford Social Innovation Review praised China’s “unique strategy” and ability “to launch system-level and sector-wide change in multiple cities and regions with no political opposition.”
The Beijing bureaucracy didn’t get overly involved in the weeds of how the funds would be spent, leaving the decision up to municipal governments. Funds were spread between different cities, which were selected based on their geographic locations and economics. The cities’ leaders chose policies that played to their strengths: Beijing, for example, set up three industrial campuses inside the city and used public policy, including license-plate lottery exemptions and tax reductions, to make electric-vehicle ownership more attractive; Shenzhen, the first SEZ, used its industrial base to create leasing models for electric buses that drove down costs for the Shenzhen Bus Group; in Chongqing, planners took advantage of the abundant cheap electricity that came from the nearby Three Gorges Dam and built what is quite possibly the most robust fast-charging infrastructure in the world.
Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, remembered arriving in Shenzhen in the mid-2010s, just as China was ramping up electric-car production. “They had decided to electrify their entire taxi fleet,” he said. When he spoke to drivers, they would complain about long charging times and the fact that the batteries sometimes burst into flames. But all of them felt they had to go electric because, they said, the government had asked them to.
In the short term, each of the pilot schemes met with difficulties. By the end of the Ten Cities, Thousand Vehicles program, only seven of the cities had reached one thousand vehicles. A U.S. political scientist at the Council on Foreign Relations judged the policy to have been “dismal”; Washington, happy with low oil prices and cheap shale gas, took little notice.
In the long term, however, the pilot plans worked better than their architects could have predicted. China soon became the largest electric-vehicle market in the world. In 2015, if you believe the official figures, the country’s EV market was already 50 percent larger than that of the U.S. The million-EV mark appears to have been reached sometime during 2017. By the end of the year, the Middle Kingdom was home to two million electric vehicles.
At times, it could feel like the whole country was somehow in lockstep with the government’s goals. By 2020, China was mandating that its firms produce a certain percentage of electric vehicles or face a penalty. And, of course, direct government stimulus to firms that had decided to make batteries was key. “China sends policy signals when they’re deciding what to invest in and what to do,” Chorzempa said. “And in areas where there are huge subsidies for grabs, people run to grab those subsidies.”
With all the cheap money available, some manufacturers overstepped, going for as much market share as possible. In 2025, it was estimated that China’s fifty battery-manufacturing companies produced batteries whose power equated to forty-eight hundred gigawatt-hours a year (one GWh of battery capacity powers at least ten thousand electric vehicles), or four times what the market needed. Chorzempa blamed this on the government getting too involved in business decisions: “Often you know when there’s a top-down push for something, because you get this huge oversupply of it really fast.”
The pilot plans had long-reaching effects in the cities that pursued them. Chongqing, the city that had focused on charging stations, had installed 72,900 electric-vehicle charging points by 2022, and it made plans to increase the number to 240,000 by 2025, 30,000 of which would be rapid chargers. Chongqing is a single city, albeit a very big one with thirty million people. By comparison, the United Kingdom, an entire country (four countries, in fact), had 34,637 charging points that year, and London, England’s capital, had 820 rapid or ultra-rapid chargers. As of 2024, California, that hub of the U.S. electric-vehicle dream, had only 37,909 operational charging stations, according to the website PlugShare.
By the end of the 2010s, the writing was on the wall. “China is about to ban the internal combustion engine,” the mine financier Robert Friedland said at the 2018 Commodities Global Summit, hosted by the Financial Times. “The Chinese can never catch up to Japanese internal combustion engines, but the Chinese have discovered and determined—because there’s really only one landlord in China—that they will definitely, one hundred percent, for sure be the world leader in the electric car.”
In 2018, 1.26 million electric vehicles were produced in China. In 2024, China produced a million electric vehicles in a single month. “No other country in the world has made anywhere near as big an investment or instituted as significant regulations,” Akshat Rathi, of Quartz, opined. “But then again, no country has the same potential payoff as China. If its bet succeeds, China can look forward to cleaner air, lower reliance on imported oil, and being a technology leader in a new high-tech industry.”
To get to pole position, however, China would need to develop and scale up two specific industries—battery production and processing for battery materials. It would also need more metals.
Chapter 29
The Deal of the Century
After college in Canada, Peter Zhou’s passion for numbers—the way injections of money can be used to grow and shape businesses, the complexities and vagaries of the world’s financial cycles—led him not back to China but to the Bank of Montreal. Canada, a nation with a long history of extractive industries, was a hub for mining start-ups. “That bank is known for resources, fracking, mining, and oil and gas,” he told me when we spoke in 2020. “I got into [mining] according to that wave of M&As, the wave of Chinese companies starting to look overseas for resources.” He explained that you could divide Chinese investment in foreign resources into two distinct “waves,” as he put it. The first wave, he said, was companies and independent businessmen striking out on their own. This began around 2006 and lasted until around 2012. “That was the first wave. Maybe these investments didn’t make money at all. Or got into trouble because they’re not used to the local regulatory regimes, or they were caught in the middle of the social problems nearby,” he said. “But they became more sophisticated starting from 2012.”
A chance assignment at the bank plunged Zhou into the world of mining—or, rather, mine finance, where investors line up to acquire projects. “Before I got the assignment, I didn’t know much about mining,” he said. He learned quickly, though. When he joined the bank in 2008, “I mean, that’s the peak of the mining cycle,” he told me. “Especially the Chinese mining companies are waking up to buy resources outside.”
The peak would yield the most ambitious Chinese project in Congo. It was midway into Joseph Kabila’s first elected term in office, and he and his closest adviser, Augustin Katumba, were looking for deals to help the economy grow. (Katumba traveled to China in 2006 as Congo’s itinerant ambassador, for example, with the aim of securing Chinese investment into Congolese oil fields.) The president’s policy rested on what he called the Five Pillars of Progress: infrastructure, job creation, education, water and power, and health care.
After the European Union–funded election, Western donors had pledged $4 billion to rebuild Congo in the wake of the devastating war. “For me, the Congo is the China of tomorrow: from now until 2011, the example for me will come from the Asian countries, which we call the ‘Dragons,’ ” Kabila told the Belgian journalist Colette Braeckman. “Congo will surprise.”
Western aid was slow to materialize in the aftermath of Kabila’s victory, so he turned to the “Dragons” of the East. “Why not try with new friends, without abandoning our traditional friends?” the president’s logic went, according to the Congolese scholar Jean Mpisi. Kabila had been to China for his military training in 1998. “There he discovered that China was concentrated on itself to escape under-development in every domain, including the economic one, to the great surprise of the rest of the world,” Mpisi wrote. “Joseph Kabila liked this Chinese experience, and he wanted the DRC to inspire itself from it.” Congo was groaning under the massive debts that Mobutu Sese Seko had aggregated from both the Eastern and Western Blocs during the Cold War. In one of the more unpleasant transactions of the era, this sovereign debt was sold to private investors who would later take Congo to court to ensure repayment—with interest—against shipments of critical metals like cobalt.
Negotiations between Congo and China proceeded quickly. In September 2007, politicians in Kinshasa announced that they were finalizing a deal with two leviathan Chinese state enterprises—Sinohydro and the China Railway Group Ltd., or CREC. The “Convention of Collaboration,” which was signed seven months later, in April 2008, initially provided for a $3.2 billion mining investment and a $6 billion infrastructure investment, which was later scaled back to $3 billion. In return for 8 million tons of copper, 200,000 tons of cobalt, and 372 tons of gold, the Chinese companies, it was announced, would build 12 roads, 3 highways, a railway, 32 hospitals, 145 health centers, and 5,000 units of social housing in Congo. According to a report commissioned by Kabila’s successor, only a fraction of the $3 billion was actually spent on infrastructure; in 2023, the Congolese government called for another $17 billion in Chinese investment, commensurate, they said, with the value of the minerals China was extracting.
The mining investment provided for a joint venture between Gécamines, which retained 32 percent of the company, and the two Chinese firms. The mining company that arose from the deal would be christened La Sino-Congolaise des Mines, or Sicomines. Barnabé Kikaya Bin Karubi, one of Kabila’s closest advisers, heralded the deal when we spoke in 2025—it was, after all, one of the few ways in which Kabila could deliver on his election promise to rebuild the country. But he said the Congolese leadership made a misstep in not okaying it with the U.S. government. “We did not explain it to the master of the world who is the United States of America: We should have come here and do a diplomatic offensive and explain why we are doing this,” Kikaya told me while on a lobbying trip to Washington. “Hence, the American government saw it as us abandoning Western countries and relying on China, and the American ambassador in Kinshasa went berserk, started calling us names and so on.” He said that it was unfair to criticize Congo for turning to the Chinese, who after all build infrastructure in European countries without being critiqued. “You cannot punish the Congo, Kabila, for being a visionary, saying that we want to build infrastructure, basic infrastructure, with what we have as an asset, which is our mines of copper and cobalt,” he continued. “And when China takes over [producing] whatever is the new technology, microchips and so on, they sell it to America and to every single company that can buy it. So it’s a holistic thing.”
Surprisingly for such a big deal, one that involved primarily state actors on both the Chinese and Congolese sides, a private company called Huayou Cobalt was also listed as a minority shareholder of Sicomines. And though Sinohydro and CREC had evolved from their roots in hydropower and railway construction, Huayou was the only company that was exclusively focused on the mining, refining, and processing of critical metals.
The firm’s inclusion was especially surprising because Huayou, by that time, was well known in Congo as a company that had been involved in some of the worst offenses of the artisanal mining trade. “Huayou itself, the company, is very controversial in China as well,” Zhou told me. “There are indeed some companies that are chasing for profit without what I call moral lines.” He even stressed that he had not been to any mines that Huayou operated or bought from.
Moïse Katumbi was too politic to mention any companies by name when we discussed his governorship of Katanga. “There are some good Chinese companies, which are lumped in with the bad Chinese companies,” he told me in 2019. “I closed a lot of Chinese companies that were doing things wrong.” But he might as well have been talking about Huayou, or at least its subsidiary, Congo Dongfang International Mining (CDM), which bought from just about anyone in its rush to acquire as much cobalt and copper ore as possible.
