Highlights

• Philip Z's essay correctly identifies China's vertically integrated rare earth system as a decades-long achievement built on state capital and scale, but crosses into propaganda by portraying this dominance as inevitable and unbreakable.
• While China controls 98% of gallium production and possesses genuine structural advantages, the essay omits Beijing's own vulnerabilities including aging deposits, illegal mining issues, water constraints, and rising costs.
• U.S. and allied efforts to rebuild rare earth capacity through public-private partnerships like MP Materials' DoD-backed expansion show real progress, proving that patient capital and policy consistency can challenge China's dominance without central planning.

---

Philip Z’s viral essay, “The Real Reason America Can’t Break China’s Rare Earth Monopoly,” is a sweeping defense of Chinese industrial dominance. His thesis: China’s scale and integration make its rare-earth and critical-metal ecosystem unbeatable. His prose is compelling—part technical treatise, part nationalist mythmaking—but it blurs analysis and advocacy.

The author paints China’s rare earth empire as an immovable edifice and U.S. self-reliance as a naïve fantasy. Yet buried beneath the patriotic theater are important truths about the economics of industrial scale—paired with some breathtaking overstatements.

Where the Logic Holds

Philip Z is right on several fronts.

• Industrial scale matters. China’s vertically integrated system—from bauxite to magnets—is the product of decades of state-backed capital, power subsidies, and environmental trade-offs. Replicating it isn’t a five-year project; it’s a generational rebuild.
• By-product metals are hostage to their parent industries. His gallium and indium examples are technically valid. U.S. Geological Survey and CSIS data confirm that China accounted for roughly 98 percent of global primary gallium production in 2024–2025, underscoring just how concentrated the supply chain remains.
• Western supply chains remain underbuilt. Even with U.S. and Australian projects advancing, midstream separation and metallization capacity still lag far behind.

These points deserve recognition—and Western policymakers should read them carefully.

Where the Story Tips into Theater

But the essay crosses from industrial realism into propaganda. Its claim that only a planned economy and whole-nation system can rebuild rare earth capacity reads like a post-Marxist sermon. The implication that capitalism itself cannot support industrial policy ignores real progress in Japan, the EU, and the United States, where public-private programs—such as MP Materials’ DoD-backed magnet expansion—are steadily closing key technical gaps.  Of course, Rare Earth Exchanges (REEx) supports aggressive industrial policy as augmenting current market and government-based initiatives.

Similarly, the mockery of U.S. nuclear permitting or workforce readiness exaggerates structural obstacles while omitting China’s own vulnerabilities: aging deposits, illegal mining crackdowns, water constraints, and rising costs. The portrayal of gallium production as an all-or-nothing hydropower megaproject is metaphorically potent but technically misleading; secondary recovery and recycling now offset some of that dependency.

Beneath the Surface: A Familiar Narrative Arc

This most recent piece isn’t journalism—it’s industrial nationalism dressed as inevitability. By equating “scale” with “virtue” and “planning” with “destiny,” it invites competitors to resign rather than scrutinize China’s real challenges: overcapacity, environmental exhaustion, and the geopolitical cost of weaponizing exports.

For investors and policymakers, the takeaway isn’t that America can’t rebuild; it’s that doing so will require patience, capital, and policy consistency—not just an unrealistic pivot to central planning. The myth of China’s unbreakable monopoly serves Beijing well—but informed readers should treat it as exactly that: myth.

Citation: Philip Z, “The Real Reason America Can’t Break China’s Rare Earth Monopoly,” Trader, Oct 2025.

©!-- /wp:paragraph -->