Critical minerals, clean tech, geopolitical risk and the global energy transition: An exploration of the Chinese influence on rare earth and lithium markets through the GVAR model

Abstract The global energy transition carries significant geopolitical implications. This study examines how Chinese exports of critical electrical goods and geopolitical risk influence national energy transitions, focusing on lithium and rare earth production, pricing and oil markets. Using a Global Vector Autoregressive model across 12 major economies (2012–2019), with emphasis on Australia, China and the United States, the analysis shows that Chinese geopolitical risk affects the consumption of electrical goods, renewable energy deployment and critical mineral production. Empirical findings reveal that reliance on Chinese electrical goods creates strategic dependencies, making other countries vulnerable to shifts in China’s energy strategy. While oil prices are less relevant for most economies’ transitions, they remain central to the United States. The results highlight both the geopolitical risks and cooperative potential embedded in the global shift to clean energy.