China’s Rare Earth Supply Security-An Assessment at Guangdong University

Global supply stability increased, then fluctuated and declined due to deficiencies in sustainable development and politics, affecting China’s long-term rare earth security index.

Global supply stability of rare earth resources initially showed a steady increase followed by fluctuations and declines, mainly influenced by sustainable development issues and policy regulatory factors. Enhancements in the global supply stability of rare earth resources have a positive effect on improving China’s rare earth security index in the medium to long term.

Domestically economic security was weakening due to reduce mine supply, impacting China’s short-term rare earth security index. 

Domestically economic security of rare earth resources tended to show a weakening trend overall. The low domestic resource economic security was primarily due to the decline in domestic rare earth mine supply capacity. Improvements in the domestic rare earth economic security level have an impact on enhancing China’s rare earth security index in the short term, but their long-term effects are not clear.

The coexistence index was rising, influenced by industry chain security changes, with increases benefiting China’s rare earth security index.

The coexistence index of rare earth resources overall showed an upward trend, significantly affected by changes in the security level of the entire rare earth industry chain. The Chinese rare earth industry chain carries high risks. Increases in the coexistence index have a stabilizing and improving effect on China’s rare earth security index.

China’s rare earth security level rose from 2010 to 2022, tracking the coexistence index, indicating that international market integration boosts rare earth security.

China’s rare earth security level generally showed an upward trend from 2010 to 2022 and exhibited the same trend as the coexistence index during the study period. This indicates that improvements in the integration of domestic and international rare earth markets (opens in a new tab) are crucial for enhancing the security level of China’s rare earth resources.

Optimizing resource utilization (opens in a new tab) and ecological coordination.

Due to a significant decline in the domestic resource supply potential, the domestically economic security index generally showed a weakening trend, and the environmental risks associated with rare earth mining had led to a decline in global economic security since 2017. On one hand, China needs to advance domestic exploration of rare earths, develop environmentally friendly mining technologies and efficient mining technologies for complex geological conditions, improve resource utilization and recycling rates, and thus enhance the level of rare earth reserves to ensure a stable and sustainable supply. On the other hand, China should advocate for the establishment of industry standards for rare earths and optimize the mining, recycling, and utilization processes of rare earth resources, thereby improving the overall efficiency of rare earth resource utilization. Strict control over the total amount of rare earth smelting and separation should be maintained to ensure the orderly mining of rare earth resources.

Promoting diverse development in high-end application industries.

The frequent changes in the coexistence index were mainly influenced by fluctuations in the security level of the entire rare earth industry chain. To enhance the security of the entire rare earth industry chain, it is necessary to increase investment in innovation and reposition China’s rare earth industry within the global industrial and value chains. Encouraging academia-industry research collaboration to promote the transformation of advanced scientific and technological achievements in rare earths and innovate rare earth smelting processes and functional material (opens in a new tab) applications. Additionally, seizing opportunities in emerging industries to promote the diverse development of high-end rare earth applications is crucial to meeting constantly changing market demands. Focusing on domestic circulation as the mainstay and expanding domestic demand as a strategic base, it aims to rely more on the domestic market for production, distribution, circulation, and consumption, providing market demand space for high-end technologies and key products of rare earths and phasing out outdated capacities.

Creating a global development strategy for rare earths. 

The integration of domestic and international rare earth markets can significantly enhance the security level of China’s rare earth resources. Meaning China is seeking diverse integration opportunity worldwide. The global supply structure for rare earths is constantly evolving, and actively participating in global rare earth governance aligns with China’s strategic interests. First, it advocates for the formation of an international rare earth alliance and actively participates in the cooperative exploration and development of overseas high-grade rare earth mines to promote global supply diversification. Secondly, it promotes multilevel international cooperation, strengthens countermeasures against foreign regulations, and coordinates national security with global common security. Thirdly, it involves formulating and implementing China’s overseas geological survey assistance plan, funded by the state, to support preliminary geological surveys and evaluations in key regions and countries, thereby reducing corporate risks and entry costs. This latter point evidence ongoing communist state-sponsored economic investment as a tool for geopolitical industry advantage.