Chinese Academy of Sciences Study Exposes China's Rare Earth Vulnerabilities-But the West Should Not Misread the Signal

Highlights

• China's rare earth exports rose 19% in volume while export value fell 19%, revealing a troubling price-volume paradox for Beijing.
• Losing Myanmar and U.S. feedstock sources could cut China's imported rare earth resources by nearly 70% and medium/heavy rare earth imports by over 85%.
• China's 2025 export controls surgically eliminated dysprosium, terbium, and yttrium shipments to the U.S. while overall export volumes recovered by year-end.
• The study was partly funded by China Rare Earth Group and includes geopolitical framing, urging Western readers to evaluate its conclusions critically.
• China still dominates rare earth separation and magnet manufacturing, and the study itself maps a roadmap for Beijing to fix its own vulnerabilities.

A revealing Chinese study (opens in a new tab) shows that even the world's dominant rare earth power has vulnerabilities—but Western policymakers should resist celebrating. Zhao Shen of the Ganjiang Innovation Academy, Chinese Academy of Sciences, with Tang Linbin, Wang Lu, and Chen Weiqiang, analyzed monthly Chinese trade from 2023–2025 and found China increasingly squeezed between foreign feedstock dependence and declining export economics. Rare earth exports rose 19% while export value fell 19%; imports fell 28% but their value declined only 12%. The paradox is important: China's rare earth machine has vulnerabilities, but it remains the machine the world depends upon.

REEx Insight | Don't Confuse Vulnerability With Weakness

The paper's most provocative calculation concerns Myanmar and the United States. In 2023, U.S.-origin mineral products represented 27% of China's imported rare earth resources while Myanmar supplied 45% through processed feedstock. The authors estimate that losing both sources could reduce China's total imported rare earth resources by nearly 70% and medium/heavy rare earth imports by more than 85%.

Myanmar is indeed a real vulnerability. Reuters independently reported that Kachin Independence Army control of northern Myanmar's mining belt disrupted a region producing roughly half the world's heavy rare earths.

But this should not lull the West into false confidence.

China possesses domestic resources, inventories, recycling capability, alternative feedstock relationships and—most importantly—the world's dominant separation and magnet ecosystem. The paper itself identifies Laos and Malaysia as potential replacement feedstock sources and recommends flexible multi-feed processing, recycling, and strategic inventories. In other words, the study is not announcing China's defeat. It is effectively providing a roadmap for fixing China's vulnerabilities.

Methods | A Much Better Look Inside the Machine

The researchers used monthly Chinese Customs data and 61 eight-digit HS categories, converting physical products into element-specific rare-earth-oxide equivalents. This is substantially more granular than conventional six-digit annual trade analysis and tracks ores, separated products, metals, magnet intermediates, and finished permanent magnets. That granularity is a genuine strength.

The Export-Control Surprise

China's 2025 controls initially crushed identifiable controlled exports: volumes fell below 2 tonnes REO in May and June. But by Q4 they had substantially recovered. Magnet exports plunged 44% quarter-on-quarter during Q2 yet finished 2025 essentially level with 2024.

The headline numbers obscure the weapon's precision. Dy, Tb, and Y exports to America virtually disappeared after April, while overall Chinese rare earth exports to the U.S. actually increased. That may be the paper's most important Western lesson: Beijing can restrict strategically sensitive atoms while continuing to sell less sensitive tonnes.

Limitations | Where REEx Applies the Brakes

Several weaknesses matter. First, customs data measure trade, not inventories, domestic production, actual industrial consumption, or embedded rare earths inside finished products. China's true strategic position therefore cannot be reconstructed from these flows alone. Second, eight-digit HS classifications still cannot identify all controlled products. The authors explicitly acknowledge this limitation. Third, converting heterogeneous products into estimated element-specific REO equivalents requires assumptions about composition. That introduces modeling uncertainty. Fourth, the dramatic 70%/85% disruption scenario is a counterfactual, not a forecast. It does not demonstrate that China would actually suffer those net shortages after inventories, domestic production, recycling, substitution, and alternative imports responded.

Finally comes perspective. The work received funding from the National Natural Science Foundation of China and a China Rare Earth Group research project. The authors explicitly state that export controls restrained Japan's “militarization attempts”—a geopolitical judgment rather than an empirically demonstrated result.

There is no basis to label the study disinformation. But neither should Western readers consume its framing uncritically.

REEx Summary

This new Chinese study shows that China remains the world's rare earth powerhouse, but it has important weak spots. The researchers found that China sells more rare earth products abroad but is earning less from them, while depending heavily on foreign raw materials—especially from Myanmar and, historically, the United States. The authors estimate that losing both sources could cut China's imported rare earth resources by nearly 70%, and its imported medium and heavy rare earth supply by more than 85%.

But this does not mean China is losing control: it still dominates the difficult steps of separating rare earths and making high-performance magnets, and it can seek new supplies from countries such as Laos and Malaysia.

The study also shows how targeted China's export controls can be: overall exports recovered after an initial 2025 drop, while strategically important dysprosium, terbium, and yttrium exports to the U.S. nearly disappeared. The study is useful because it examines detailed monthly customs data, but it has limits: trade records do not reveal China's stockpiles, domestic production, embedded rare earths, or ability to replace lost suppliers, and some elemental quantities must be estimated. The research was also partly funded by a China Rare Earth Group project and includes Chinese geopolitical viewpoints, so Western readers should evaluate its interpretation carefully.

The main lesson is simple: China has vulnerabilities, but vulnerability should not be mistaken for weakness—and Beijing is actively studying how to fix those vulnerabilities.

Citation: Zhao S, Tang L, Wang L, et al. Dynamic evolution of China’s rare earth trade pattern under great-power competition. China Mining Magazine. 2026;35(5):325–338. DOI: 10.12075/j.issn.1004-4051.20260549.