China and its Connection with REE’s: How China Controls the Global Rare Earth Supply

China’s dominance in rare earth mining and processing gives it unprecedented control over global technology supply chains

Rare earth elements, also called REEs, are a group of 17 special metals like neodymium, dysprosium, and terbium. These materials are extremely important for modern life. They are used in smartphones, electric cars, wind turbines, medical devices, and even in military equipment like fighter jets and missiles.

Although they are called “rare,” they are not actually scarce in nature. What makes them rare is how hard and expensive it is to extract and refine them. Over the years, China has mastered this process and now controls most of the world’s rare earth supply.

China produces about 70 percent of the world’s rare earth minerals and controls more than 85 percent of their processing and refining. This means that even countries that mine their own rare earth ores, such as the United States or Australia, still depend on China to refine them. China has built a complete system — from mining the ores to making the final products like magnets and alloys. This gives China a very strong position in industries that depend on these materials, like technology, clean energy, and defence.

📈 The Strategic Build-Up

China’s advanced processing facilities give it control over the entire rare earth supply chain

This control did not happen by accident. Since the 1980s, China’s government realised that rare earths were the “oil of the future.” It invested heavily in mining, refining, and research. State-owned companies such as China Northern Rare Earth Group and China Minmetals became leaders in the field. These companies follow strict national plans set by the Chinese government, which focuses on keeping control over production and protecting long-term interests.

🔒 Methods of Control

One of the main ways China keeps its control is by setting production quotas. The government decides how much rare earth can be mined and refined each year. Only approved companies can work under these limits. This helps prevent overproduction and keeps prices stable. It also ensures that the companies remain loyal to government policies. China says it does this to protect the environment, since rare earth mining can cause pollution, but it also helps maintain its global dominance.

Another major method China uses is export licensing. Any company that wants to export rare earths must get special permission from the government. These licenses are especially hard to get if the materials will be used for military or technology purposes. This gives China a lot of power in trade — it can decide which countries get access to these resources and when. Rare earths have become a powerful tool for China in international negotiations.

Modern technology from smartphones to electric vehicles depends heavily on rare earth elements

China also controls the technology needed to refine rare earths. It restricts the export of machines and know-how used in separating and processing these elements. This means that even if other countries have the raw minerals, they often can’t refine or use them effectively without Chinese technology. This makes other nations more dependent on China’s advanced industrial systems.

⚡ Recent Escalations

In the last few years, China has become even stricter. In 2025, it added new export controls on rare earth alloys and magnet technologies. Now, companies that use Chinese-made rare earth products must get extra permits before exporting them. Many experts believe these new rules are China’s way of responding to Western restrictions on semiconductors. By tightening its grip on rare earths, China is showing that it, too, can use technology and trade as tools of power.

These actions have led to global disputes. The United States, European Union, and Japan all accuse China of using rare earths as a political weapon. The U.S. worries that China could cut off supplies during conflicts — something that already happened in 2010 when China stopped exporting rare earths to Japan after a sea dispute. Since then, the U.S. has tried to rebuild its own rare earth industry, especially through companies like MP Materials in Nevada. The EU and Japan are also investing in projects in countries such as Australia, Sweden, and Greenland to find alternatives.

🏛️ International Response

Countries worldwide are working to reduce their dependence on China’s rare earth supply

The World Trade Organisation (WTO) has also been involved. In 2014, it ruled that China’s export restrictions broke global trade rules. China agreed to change them, but it still controls the market indirectly using production limits, environmental inspections, and export licenses. This way, it stays within the rules while keeping control.

China’s dominance gives it big advantages. Economically, the refining and magnet-making stages are far more valuable than mining raw ore. Politically, China can use its control to influence other countries, rewarding friendly nations or pressuring rivals. Environmentally, it can claim to be managing pollution more responsibly, although mining in China has caused serious local damage.

🌍 Global Efforts to Break Free

Other countries are now trying to reduce their dependence. The U.S., EU, and Japan are working to build new mining and refining projects. Countries like Australia, Vietnam, and Canada are developing their own supplies. Recycling programs are also starting to recover rare earths from old electronics and machinery. However, experts say it could take at least another decade before these efforts make a real difference, because China’s system is so far ahead.

🔮 The Future of Global Power

In the end, the rare earth story is not just about minerals. It’s about global power and the future of technology. Rare earths are essential for clean energy, advanced weapons, and modern industries. Whoever controls them controls the building blocks of progress. China’s grip on this market gives it enormous influence over the world’s economy and technology. Through decades of planning, investment, and control, China has positioned itself as the gatekeeper of the materials that shape our future.