[Text/Observer Network Liu Chenghui] "China's rare earth strategy is more resilient than it appears on the surface." On May 26, The Times of India published such a report, refuting the argument that China's control over rare earth exports would "self-destruct its dominant position."

The article points out that China's dominance in the global rare earth and critical minerals sector was not accidental, but the result of systematic planning over decades through deep investment, supply chain integration, and strategic acquisitions. Although other countries are attempting to diversify their supply chains to reduce dependence on China, China's industrial scale and technological advantages are difficult for other countries to match. Countries like India need to adopt pragmatic, long-term strategies to address this challenge.

The Times of India published an article in late April this year, suggesting that China tightening rare earth exports is not a good move and will unintentionally weaken its dominant position in the global rare earth competition.

However, the author of this article believes that this view underestimates the strategic depth, scale of investment, and systematic planning that China has demonstrated over the past thirty years to control critical minerals. Through decades of investment, technological advantages, professional talent development, supply chain integration, and strategic acquisitions, China has established an unshakable dominant position in the rare earth sector.

China accounts for about 60% of the global production of critical minerals and possesses more than 85% of the world's refining capacity. China produces 40% of the world's refined copper, 70% of refined cobalt, more than 60% of lithium, and 99% of battery-grade graphite. Additionally, China controls 87% of the permanent magnet market, with rare earths being the core element of permanent magnets.

The U.S. Geological Survey (USGS) lists 50 critical minerals including rare earths. The U.S. is completely dependent on imports for 12 of these critical minerals and imports more than 50% of 29 minerals. According to a report published by USGS in 2024, China is the main supplier of critical minerals to the U.S., accounting for 72% of its annual demand, followed by Malaysia (11%) and Japan (6%).

The article notes that with strategic industrial policies, China has established and funded several national-level rare earth laboratories, and dozens of universities have introduced specialized courses in critical minerals and rare earths. China University of Mining and Technology ranks at the top globally in mining technology. Data shows that China holds the most mining technology patents worldwide.

On May 11, 2024, at the China Brand Expo, China Northern Rare Earth (Group) Hi-Tech Co., Ltd. exhibited various rare earth materials, rare earth metals, and rare earth oxides. Visual China

Indian media also noticed that after the collision incident between China and Japan in the East China Sea in 2010, China imposed a seven-week ban on rare earth exports to Japan, causing related critical mineral prices to soar more than five times, demonstrating China's strong influence over the supply chain. Despite the "de-risking" plans initiated by many countries in the post-pandemic era, China's economies of scale and global resource layout have made alternative solutions by other countries unsustainable.

India is not without action. India is promoting private sector participation in the exploration and mining of critical minerals through the "National Critical Minerals Mission" (NCMM) plan, aiming to reduce the vulnerability of its own supply chain. India also hopes to participate in building resilient and trusted critical minerals supply chains via platforms such as the Quadrilateral Security Dialogue (Quad).

"However, any diversification strategy must be based on patience, continuous technological progress, and geopolitical pragmatism,"

The article writes that complete disengagement from China is neither realistic nor achievable in the short term. Establishing alternative capacities and reducing reliance requires years of sustained efforts, coordinated national vision, and international cooperation.

After the pandemic, India attempted to reduce dependence on Chinese active pharmaceutical ingredients, but progress was slow. According to data from the Indian Pharmaceutical Export Promotion Council, imports of active pharmaceutical ingredients in the first two months of the 2024-2025 fiscal year increased by 13.06% year-on-year, indicating that India's dependence on China continues and even strengthens.

"China's dominant position in the rare earth sector is not fragile, nor is it obtained by chance; it is the product of deliberate, long-term strategy." The article concludes that with strong government support, leading processing technologies, and world-class educational institutions, China has built a powerful ecosystem. Any attempt to challenge this dominant position must face the daunting challenges it presents.

As for the claim that China's rare earth controls "self-destruct its dominant position," it overlooks the resilience and adaptability behind China's critical minerals strategy - something that other countries find hard to match.

Not long ago, the Hong Kong English-language media South China Morning Post also mentioned in an article that China occupies an absolute dominant position in the critical minerals supply chain, particularly lagging behind China by 20 years in heavy rare earth separation and purification technology. Although the U.S. is trying to摆脱dependence on China through "mineral diplomacy" and other means, it is unlikely to shake China's position in the short term.

"If the U.S. wants to solve supply chain security issues through mineral diplomacy and establish partnerships to replace procurement from China, it must provide a certain level of financial or diplomatic support," said Hou Lei, deputy researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences. "This is why China's irreplaceability will continue to exist in the short term."

However, some industry analysts remind that China needs to remain vigilant while maintaining its advantages, strengthening basic research and talent development to guard against long-term risks.

"Of course, our position is not easy to shake in the short term," said Wang Xiaosong, professor at the School of Economics of Renmin University of China. "But our rare earth industry must also remain vigilant."

This article is an exclusive contribution of Observer Network and cannot be reproduced without permission.

Original source: https://www.toutiao.com/article/7508659023210709519/

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