Global Rice News

China’s Control over Rare Earths Tightens Amid Trade War

In the ongoing trade war between China and the West, China has taken a significant step to tighten its control over rare earths, putting it in a crucial strategic position in the market. Rare earths refer to a group of 17 chemical elements that are essential to the technology and energy industry. They play a vital role in the production of electric cars, magnets, and electronic devices.

Currently, China controls around 80% of the processing of rare earths, giving it a substantial advantage over the rest of the world. This dominance has prompted the United States and Europe to explore alternatives and reduce their dependence on Chinese rare earths. However, China has responded by further restricting exports, particularly in the area of technology used for manufacturing magnets from rare earths.

This development poses a significant challenge for the growing electric vehicle industry in the West, as well as for the production of various energy and electronic components. The United States and Europe are now faced with the task of finding solutions to refine these elements domestically, as the environmental regulations and technical requirements in the West are more stringent compared to China.

The process of refining rare earths is highly polluting and requires substantial investment in machinery. Up until now, the West has relied on purchasing these elements from China rather than refining them domestically. However, with the recent export restrictions imposed by China, European countries like Germany, the Netherlands, and France are seeking alternatives, such as developing magnets from recycled materials.

Though progress is being made in this area, there is still a long way to go before Europe can become self-sufficient in rare earth production. The consequences of this trade and technological war are significant, as both China and the West have the power to trigger a crisis in each other’s economies.

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