China Tightens Grip on Rare Earth Supply Chains

A new Asia Society Policy Institute diagnostic frames China’s rare earth strategy as an extension of centralized state power, not market-driven trade policy.
Beijing’s control of separation, refining and magnet production has become an operational constraint across defense, clean-energy transition and advanced manufacturing sectors. Export controls, licensing rules and industrial consolidation are applied deliberately as governance tools to secure strategic leverage.
The report finds China prefers calibrated pressure—using supply-chain advantage to influence rivals without wholesale disruption—while aggressively expanding upstream and midstream footprints through green-mining and clean-energy diplomacy in Africa, Latin America and Southeast Asia.
For the U.S. and allies, the diagnosis is stark: diversification requires more than policy statements or alliances. Building competitive capacity means new mines, processing facilities and magnet factories, plus sustained capital and faster permitting to match China’s lead.
Investors and policymakers should treat rare earths as strategic infrastructure. Without sizable, coordinated industrial investment, Western manufacturers will remain exposed to asymmetric supply risks that can affect military readiness, clean-energy deployment and advanced electronics supply chains.