China's Strategic Control Over Critical Minerals
China's commanding position in the global rare earth elements market represents the culmination of strategic planning spanning several decades. Beijing has systematically invested across every segment of the supply chain—from mining operations and reserve accumulation to processing facilities and technological development. This comprehensive approach has granted China substantial influence in its ongoing trade disputes with the United States, particularly during the renewed trade tensions under President Donald Trump's second term.
These seventeen critical minerals serve essential functions in both defense and consumer sectors. They are indispensable for advanced military equipment including fighter jets, radar systems, and missile guidance technology. Simultaneously, they power everyday devices such as smartphones, medical equipment, and modern automobiles.
Inside China's Rare Earth Powerhouse
Recent visits by AFP correspondents to Ganzhou revealed a hub of intense activity despite heightened security measures. This southern Chinese city specializes in heavy rare earth production, including elements like yttrium and terbium. Journalists documented continuous truck movements entering and exiting mining sites, alongside bustling processing plants operating at full capacity.
The city is currently constructing new headquarters for China Rare Earth Group, one of two major state-owned entities formed through years of government-led industry consolidation. This consolidation has strengthened Beijing's control over the entire production pipeline.
Economics lecturer Heron Lim provided insight to AFP, noting that recent supply chain disruptions have prompted numerous countries to reconsider expanding their domestic production capabilities. He emphasized that such strategic moves "could pay longer-term dividends" for nations seeking to reduce their dependence on Chinese supplies.
Global Reactions and Alternative Strategies
The October export restrictions announced by China sent shockwaves through global manufacturing sectors and raised significant concerns in Washington. The subsequent truce agreement between President Trump and Chinese President Xi Jinping, negotiated during talks in South Korea, established a one-year pause that temporarily secures rare earth supplies—a development widely interpreted as favoring Chinese interests.
According to Lim, rare earth elements will likely maintain their central role in future diplomatic negotiations, particularly since China has demonstrated its willingness to employ trade tools to maintain engagement with the United States. He noted that the prevailing uncertainty has created substantial challenges for industries that depend heavily on these specialized metals.
The United States once led the rare earth industry during the Cold War era, with California's Mountain Pass mine supplying most global demand. However, as geopolitical tensions eased and environmental considerations gained prominence, American production gradually shifted overseas throughout the 1980s and 1990s.
Current analysis cited by AFP indicates that China now controls approximately two-thirds of global mining output and nearly 90% of processing capacity. Beijing also maintains the world's largest reserves and leads in patent development, bolstered by strict export controls on processing technology.
Commodities analyst Amelia Haines warned that this heavy reliance on imports creates "significant risks to critical industries" and could accelerate broader initiatives aimed at securing mineral supplies.
The United States has undertaken multi-year efforts to rebuild its rare earth capabilities. Defense agencies have committed substantial resources to establish a complete "mine-to-magnet" supply chain by 2027. Washington has also signed critical minerals agreements with allied nations including Australia, Japan, Malaysia, and Thailand.
Most recently, President Trump announced an $8.5 billion rare earth partnership with Australian Prime Minister Anthony Albanese, signaling intensified cooperation among Western allies.
This urgency recalls the 2010 incident when China temporarily suspended rare earth shipments to Japan during a territorial dispute, highlighting the material's geopolitical significance. Although the Obama administration advocated for strengthening American resilience fifteen years ago, China continues to dominate the sector today.
