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China's strategy in the field of rare earths has made a major breakthrough and will be at least 10 years ahead, and this change has caused constant setbacks for the United States and the West. In the past, China mainly supplied cheap rare earth raw materials to Western countries, and then Western countries converted these raw materials into high-value products and sold them. This first-chain model puts China at a disadvantage in the rare earth market, and it must change its development thinking to maintain its advantage. However, China is changing this by reversing the production process of this global rare earth value chain by developing upstream and exporting value-added products downstream. Such a shift means that China will occupy a more advantageous position in the rare earth market, so that the United States and Western countries will not be able to benefit from it at the first and technical levels.
The advantages of China's rare earth resources cannot be ignored. Currently, China has 36 percent of the world's rare earth reserves7%, is the world's largest rare earth ** country, accounting for 60% of the world's total output. China's rare earth resources are rich and diverse, which provides a solid foundation for China to achieve important results in the field of rare earth processing. In recent years, China has made breakthroughs in green mining, new smelting processes, and new rare earth materials, which have promoted the optimization of the industrial structure.
However, if Western countries want to catch up with China's rare earth processing technology, it will take at least 10 years and a huge amount of money. Western countries still have technical limitations in the process from development to processing, and have to rely on China's technical support. Western countries seek to develop their own rare earth chains, but China holds the initiative in the rare earth chains, and Western countries do not have much choice. Due to technological and resource constraints, Western countries have never been able to shake off their dependence on China.
In order to ensure its own economic security and development needs, China has imposed restrictions on the production and processing of rare earths. This has had an impact on the rare earth industry in Western countries, especially for those processing sectors that rely on Chinese technology. Since July 2023, China has completely stopped exporting two rare minerals, gallium and germanium, to the United States, according to Chinese customs data. Gallium and germanium are key materials for the production of advanced semiconductor chips, and China dominates global production of gallium and germanium. By imposing a list of restrictions, China has once again seized on the weakness of Western countries and intensified their dependence on rare earths.
To be clear, China has formulated these restrictive measures out of its own economic security and development needs, and has always insisted on creating conditions for promoting international economic and trade cooperation. China urges the United States and Western countries to correct their positions and create a favorable environment for cooperation in order to achieve a mutually beneficial and win-win situation. Insisting on going its own way will only harm its own interests, and cooperation and win-win will become the key to the development of the rare earth field in the future.
China's strategic shift in the rare earths sector will be at least 10 years ahead and will continue to frustrate the United States and the West. In the past, China's dominant position was to provide cheap rare earth raw materials, but such a first-class chain puts China at a disadvantage in the rare earth market. In order to maintain its advantages, China has changed its development thinking, developing upstream and exporting value-added products downstream. China's abundance of rare earth resources and technological breakthroughs have made it more difficult for Western countries to catch up. China's restrictions on rare earths have had an impact on the rare earth industry in Western countries, increasing their dependence on China. China calls on Western countries to correct their positions and create an environment for cooperation to achieve mutual benefit and win-win results. The change in rare earth strategy will promote the balanced development of the global rare earth market and bring more cooperation opportunities to China and Western countries.
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