Highlights

• China controls over 85% of global rare earth refining and 90% of permanent magnet production.
• China is implementing strict export controls on rare earths.
• Beijing has launched a multi-agency anti-smuggling campaign targeting rare earth exports with new intelligence-gathering requirements.
• Western defense, auto, and electronics industries face significant supply challenges due to China's use of rare earths as a geopolitical leverage tool.

In a hard-hitting June 4 report for The New York Times, veteran correspondent Keith Bradsher exposes (opens in a new tab) China’s intensifying crackdown on rare earth exports—legal and illegal alike—as shortages mount for critical industries abroad. Following its April 4 embargo on seven categories of rare earths and magnets, Beijing has intensified its efforts, launching a coordinated, multi-agency anti-smuggling campaign aimed at securing its strategic mineral supply chain.

The move compounds the global supply crisis. Western defense firms, auto manufacturers, and electronics companies, which have long depended on Chinese rare earths, now face dual barriers: a near freeze on licensed exports and aggressive interdiction of cross-border smuggling into countries like Vietnam. The effort is more than enforcement—it’s intelligence gathering. New export rules require Chinese firms to document not only buyers but also end-users and downstream products. “It’s essentially becoming an intelligence effort,” warns MP Materials CEO James Litinsky, who also notes the data could allow Beijing to target foreign supply chains precisely.

Beijing’s logic is strategic: rare earths are now a frontline tool of geopolitical leverage. China controls more than 85% of global rare earth refining and 90% of permanent magnet production. With surveillance tightening and smugglers squeezed, Bradsher’s report makes one thing clear: the West is running out of time—and options. The pressure is no longer theoretical. It’s operational. And it’s escalating.

Of course, Rare Earth Exchanges (REEx) has been explaining this reality since our launch of the website in October 2024 and the company in January 2025.  Check out the REEx Forum for discussions focused on retail investors.