China's Rare Earth Dominance Bolsters Global Influence, Posing Challenges for Washington and Moscow

The Strategic Importance of Rare Earth Elements

Rare earth elements (REEs) are a group of 17 metallic elements indispensable for a wide array of modern technologies. These materials possess unique magnetic, luminescent, and electrochemical properties that are crucial for high-tech applications across various sectors. Their uses range from precision-guided munitions, radar systems, night-vision goggles, and stealth technology in defense to components in electric vehicles, wind turbines, and consumer electronics like smartphones and computers.

China's Unrivaled Control Over the Supply Chain

China has systematically established an unparalleled dominance across the entire rare earth value chain, from mining to advanced manufacturing. The nation accounts for over 60 percent of global rare earth production, with some estimates placing its share at 69 percent in 2023 and 60 percent in 2024. More critically, China processes nearly 90 percent of the world's rare earth elements, including an estimated 99 percent of heavy rare earth refining capacity. This extensive control extends to the manufacturing of downstream products, with China producing between 87 and 90 percent of the world's permanent magnets, which are vital for numerous high-tech applications.

Beijing's strategy has involved decades of significant investment in processing capabilities and technology, often tolerating environmental costs, and consolidating the industry into state-backed enterprises. This deliberate approach has positioned China as the gatekeeper for critical technologies globally.

Geopolitical Leverage Through Export Controls

China has increasingly utilized its rare earth dominance as a geopolitical instrument. In October 2025, Beijing announced sweeping new export controls on rare earth elements and associated technologies, building upon earlier restrictions introduced in April 2025. These measures are considered a significant escalation, directly impacting global supply chains in the defense, semiconductor, renewable energy, and advanced manufacturing sectors. The new framework includes expanded lists of controlled elements and equipment for processing rare earths, requiring foreign companies to obtain licenses for components containing Chinese-sourced materials or produced using Chinese technologies.

This strategic move grants China considerable leverage, particularly over nations heavily reliant on these materials. The United States, for instance, is highly dependent on China for its rare earth supply, a vulnerability that has been highlighted in past trade disputes.

Global Implications and Responses

The implications of China's rare earth control extend to both Washington and Moscow, albeit in different ways. For the United States, the dependency on Chinese rare earths creates a strategic vulnerability, prompting accelerated efforts to diversify supply chains and rebuild domestic processing capabilities. These efforts, however, are acknowledged to be slow, costly, and uncertain. The US has engaged in partnerships, such as those in Central Asia, to secure alternative sources of critical minerals.

While Russia possesses significant rare earth deposits, China's influence over Moscow is more broadly observed through economic ties. China has become Russia's largest trading partner, supplying crucial dual-use goods for its defense industry. The broader competition for critical minerals in regions like Central Asia also sees China expanding its influence through investments, challenging Russia's historical dominance. Some analyses suggest a potential, albeit complex, US-Russia partnership in rare earth production could serve to weaken China's market monopoly.

The ongoing situation underscores the critical role of rare earth elements in the global economy and security landscape, with China's strategic control continuing to reshape international power dynamics.