Highlights
- China dominates rare earth production, controlling 60% of global supply and 90% of processing capabilities.
- Strategic investments in mining, metallurgical engineering, and materials science have positioned China as a global leader in critical materials.
- China’s approach to critical materials represents a long-term geopolitical strategy that challenges Western technological and economic interests.
In the ongoing global trade war that began in 2018, China’s dominance over critical materials—specifically rare earths—has emerged as a key leverage point. Often dubbed “industrial vitamins,” these 17 elements play an essential role in the production of advanced technologies, from electric vehicles to missile guidance systems. With applications spanning national defense, renewable energy, and electronics, rare earths are not just valuable; they are indispensable.
The stakes are high, reports Steve H. Hanke, a professor of applied economics at the Johns Hopkins University in Baltimore, plus a senior fellow at the Independent Institute in Oakland, CA, along with Jeffrey Weng, chief of staff at the Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
The duo uses, as an example, the F-35 fighter jet, which they claim requires 900 pounds of rare earths. A Virginia-class submarine needs more than 9,200 pounds. Prices for these materials are skyrocketing; scandium, for instance, costs over $270 per gram. Meanwhile, demand is surging.
However, as Rare Earth Exchanges chronicles, China’s control over rare earths is nearly absolute. It produces 60% and processes nearly 90% of the world’s supply while also holding a commanding lead in intellectual property, with over 25,000 patents since 1950, compared to 10,000 filed by the United States.
The Foundations of Dominance
How did China achieve this level of control? In a National Review piece (opens in a new tab) the authors educate via decades of targeted investment in three strategic areas—mining, metallurgical engineering, and materials science, collectively termed the 3Ms. State-backed subsidies, educational priorities, and protective policies have built a comprehensive ecosystem for rare earths.
Starting in 1975 with the establishment of the National Rare Earth Development and Application Leading Group, China systematically positioned itself as a global leader. By 1992, Chinese leader Deng Xiaoping famously declared, “The Middle East has oil; China has rare earth.” His words foreshadowed China’s current strategy, which continues to be reinforced through policies like the Rare Earth Management Regulations introduced in 2024.
Chinese universities have also risen to prominence in the 3Ms, dominating rankings in mining and mineral science and metallurgical engineering. This focus contrasts starkly with U.S. institutions, which, despite leading in other academic areas, lag significantly in these fields.
Note that the West, including America, did little to counter this rise to dominance over these critical minerals.
Weaponizing Critical Materials
China’s influence extends beyond rare earths to other critical materials. Recent export restrictions and outright bans—such as those on antimony, a key component in munitions and other essential products—have already caused prices to spike by over 69%. These moves reflect China’s strategic use of critical materials as a geopolitical tool, tightening its grip on global supply chains.
Moving Forward Questions
The authors of this analysis raise important points, but their framing also invites scrutiny.
For example, they, plus nearly all others nowadays, assume zero-sum geopolitical competition, where China’s gains inherently threaten Western interests. Is this always the case, or could mutual dependencies foster cooperation instead of conflict?
What biases might be influencing this narrative?
The piece strongly emphasizes U.S. vulnerabilities while portraying China’s strategy as almost unassailable. This framing could overlook efforts by other nations to diversify supply chains or innovate alternative materials.
The authors seem to be sounding an alarm about China’s growing influence, implicitly urging policymakers and industry leaders to act. But is the goal to inspire constructive action or to stoke fear and adversarial competition? Or something else?
What’s Next?
The article draws an interesting parallel between the strategic approaches of U.S. and Chinese leaders. It compares former President Trump’s bold chess-like moves with President Xi Jinping’s subtle, Go-inspired strategies. The latter emphasizes patience and incremental advantage, which has allowed China to encircle Western nations in the critical materials sector.
But what’s the path forward for the West? Should the U.S. and its allies focus on ramping up domestic production, diversifying supply chains, or accelerating research into rare earth substitutes? Each option carries trade-offs and challenges.
Conclusion
China’s dominance in rare earths and other critical materials is not just an economic issue—it’s a geopolitical one. As nations like the U.S. grapple with this reality, key questions remain about how to address this imbalance without escalating tensions or undermining global collaboration.
While China has played its hand with precision and strategy, the West must determine whether it will respond with innovation and partnership or tend to react with fear and isolation. The answer will shape the future of technology, defense,and global power dynamics.
Daniel
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