How does China’s control over rare earth elements influence its geopolitical power

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China’s control over rare earth elements (REEs) significantly amplifies its geopolitical power by granting it leverage over countries dependent on these critical materials for advanced technologies and defense systems. This influence is rooted in several key factors:

Rare Earth Dominance and Supply Control

• China controls approximately 90% of the world’s supply of rare earth magnets, essential components for electric motors used in electric vehicles, drones, robots, missiles, and spacecraft.
• It accounted for about 69% of global rare earth ore production as of 2023, far outpacing competitors such as the United States, Burma, and Australia.
• China’s rare earth supply chain is vertically integrated, encompassing mining, refining, manufacturing, and exporting finished products. This allows China to dominate not only raw materials but also high-value rare earth-based products like magnets and advanced alloys critical to technology and defense industries.

Geopolitical Leverage Through Export Policies

• China has repeatedly demonstrated its willingness to use rare earth exports as a geopolitical tool. For instance, in 2010, China temporarily cut off rare earth exports to Japan amid a territorial dispute, severely disrupting global supply chains and causing prices to spike.
• More recently, China has imposed export restrictions and licensing requirements on seven key medium and heavy rare earth elements—such as samarium, gadolinium, terbium, and dysprosium—that are vital for defense, energy, automotive, and green technology sectors.
• These export controls function as a form of economic coercion, enabling China to influence trade negotiations and diplomatic relations by controlling access to rare earths, especially targeting U.S. military and aerospace industries.

Strategic Importance for Green Technology and Defense

• Rare earth elements are indispensable for renewable energy technologies like wind turbines, electric vehicle motors, and solar panels. As global demand for green energy infrastructure grows, China’s control over these materials positions it as a key player in the global energy transition and sustainability efforts.
• The rare earth restrictions have direct implications for defense technologies, as many rare earths are critical to the production of advanced military equipment, including missiles, drones, and aerospace components.

Impact on Global Security and Economic Stability

• The concentration of rare earth production in China creates vulnerabilities for other countries, such as the United States, which relies heavily on imports due to limited domestic mining and environmental opposition to mining operations.
• China’s export licensing systems and lists of restricted entities have the potential to disrupt supply chains for critical sectors, creating strategic uncertainty and encouraging countries to engage diplomatically or economically with China to secure rare earths.

In sum, China’s near-monopoly on rare earth elements equips it with substantial geopolitical power by allowing it to control critical supply chains essential for modern technology, green energy, and defense industries worldwide. This control serves as a strategic lever in international relations, enabling China to exert economic pressure, shape global technological development, and influence diplomatic outcomes with countries dependent on these materials.