China's "Hidden" Rare Earth Exports: The Supply Chain You Can't See May Be the One That Matters Most

Highlights

• A multi-university study finds that approximately 38% of China's rare earth exports from 1990–2020 were embedded in manufactured products and never appeared in customs data.
• Permanent magnets were the single largest indirect export pathway, driven by global demand for EVs, wind turbines, and robotics.
• The US, Europe, and Japan were the primary destinations for these largely invisible rare earth flows embedded in finished goods.
• Indirect exports carry 2–7 times higher domestic carbon emissions than direct raw material exports, raising environmental accountability concerns.
• The findings predate China's 2023–2025 export controls, meaning current supply-chain dependencies may be even more complex than the study models.

A new study led by Ling Shao (opens in a new tab) of the China University of Geosciences (Beijing), together with researchers from the University of Maryland, Tsinghua University, Peking University, the Chinese Academy of Sciences, Xiamen University, Shandong University, and the Association of China Rare Earth Industry, argues that conventional trade statistics substantially understate China's role in supplying the world's rare earths. Published in Cell Reports Sustainability (opens in a new tab), the researchers conclude that approximately 38% of China's rare earth exports between 1990 and 2020 never appeared in customs data because they were embedded in manufactured products—from permanent magnets and electric motors to consumer electronics and industrial equipment. Overall, the authors estimate that more than 60% of rare earths extracted in China ultimately reached overseas markets, either as raw materials or embedded within downstream products, suggesting governments and industry should rethink how supply-chain dependence is measured.

Professor Ling Shao, China University of Geosciences in Beijing

Source: ResearchGate

The research team assembled one of the most comprehensive inventories to date of China's rare earth production, processing, and downstream use. They combined material flow analysis, environmentally extended multi-regional input-output (EEMRIO) modeling, global value chain analysis, and structural path analysis to trace rare earths from mine to refinery to manufacturing and ultimately into products consumed around the world.

The results reveal a significant structural shift in China's export model. As Beijing curtailed exports of primary rare earth materials through industry restructuring and tighter environmental oversight, an increasing share of exports occurred indirectly through higher-value manufactured goods. By the 2010s, these embedded exports frequently exceeded direct shipments, with permanent magnets emerging as the single most important indirect export pathway, reflecting growing global demand from electric vehicles, wind turbines, robotics, and other advanced technologies. The United States, Europe, and Japan emerged as the principal destinations for these largely invisible rare earth flows.

The study also highlights an important environmental paradox. Because indirect exports involve substantially more downstream processing inside China before products are shipped abroad, they are associated with 2–7 times higher domestic carbon emissions than direct exports. The authors argue this strengthens the case for greater international cooperation, improved supply-chain transparency, and lifecycle environmental accounting.

The research has important limitations. The analysis ends in 2020—before China's 2023–2025 export controls and the accelerating geopolitical fragmentation of critical mineral supply chains. The authors also acknowledge that downstream processing outside China, recycling, and rare earth production in other countries are only partially captured, meaning today's supply-chain dynamics may differ materially from those modeled in the study.

For Rare Earth Exchanges®, the takeaway seems clear: customs statistics tell only part of the story. A growing share of China's strategic influence no longer leaves the country as rare earth oxides or metals—it departs embedded inside magnets, motors, electronics, and countless manufactured products. Understanding that hidden flow is becoming essential for governments, manufacturers, investors, and defense planners seeking to build resilient critical mineral supply chains.

Citation: Shao, L., Feng, K., Wu, Z., et al. Tracing China's Unseen Rare Earth Exports that Sustain Global Consumption. Cell Reports Sustainability. 2026;3:100553. https://doi.org/10.1016/j.crsus.2025.100553 (opens in a new tab)