Highlights

• China's dominance stems from controlling rare earth processing and refining chokepoints, not just mining, giving it unique leverage over global supply chains through export licensing and administrative approvals.
• Beijing strategically tightens and eases export controls in response to geopolitical tensions, using them as calibrated statecraft tools rather than blunt weapons to signal power while preserving flexibility.
• This calculated leverage creates a strategic paradox: short-term control risks accelerating diversification efforts in the U.S. and allied nations, potentially eroding China's long-term rare earth monopoly.

---

A new January 2026 analysis (opens in a new tab) from Singapore’s S. Rajaratnam School of International Studies (opens in a new tab) (RSIS) offers a sober, revealing look at how China wields its dominance over rare earth processing—not as a blunt weapon, but as a finely calibrated tool of statecraft. In China’s Strategic Design and Cautious Calibration of Rare Earth Leverage, lead author Xing Jiaying, a PhD researcher at RSIS, alongside senior analyst Xinyue Hu, examine how Beijing has embedded rare earth export controls into formal legal and regulatory systems to manage geopolitical pressure while avoiding self-defeating escalation.

The authors argue that China’s near-monopoly over rare earth separation and refining—rather than mining alone—gives it unique leverage in global supply chains. Rather than imposing outright bans, Beijing has adjusted export licensing, administrative approvals, and product coverage in response to U.S. tariffs and technology controls, allowing it to signal power while preserving flexibility.

Study Approach and Methods

The RSIS paper is a policy and geopolitical analysis rather than a technical or economic modeling study. Drawing on trade data, export licensing timelines, and case examples from 2010 through 2025, the authors track how China’s rare earth controls have evolved from informal pressure tactics to a structured instrument of economic statecraft embedded in domestic law.

Key Findings Explained Simply

China’s advantage lies not just in owning resources, but in controlling processing chokepoints—the complex, environmentally intensive steps that turn ore into usable oxides, metals, and magnets. The study shows that Beijing tightens controls when tensions rise, then eases them when negotiations advance, as seen in fluctuating export volumes following U.S.–China trade talks in 2025. This “on-off switch” approach allows China to influence markets without permanently pushing customers to decouple.

Why This Matters for the Global Supply Chain

For the United States and its allies, the paper underscores a hard truth: diversification is accelerating precisely because China’s leverage is real. Overuse of export controls risks motivating alternative supply chains in Australia, the U.S., and allied countries—potentially eroding China’s dominance over time. The authors describe this as a strategic paradox: short-term leverage versus long-term loss of control.

Limitations and Open Questions

The study does not quantify cost curves, project timelines, or substitution feasibility outside China. It also assumes rational calibration by Beijing, leaving open the risk of miscalculation, domestic political pressure, or sudden escalation.

REEx Takeaway

China’s rare earth monopoly is not accidental, nor reckless. It is deliberate, legalistic, and strategically restrained. But restraint is not permanence. Every calibrated squeeze reinforces the case for multiple non-Chinese mine-to-magnet supply chains—precisely the outcome Beijing seeks to delay.

Source: Xing Jiaying & Xinyue Hu, China’s Strategic Design and Cautious Calibration of Rare Earth Leverage, RSIS / NTU Singapore (Jan. 9, 2026)