US Ambassador to China David Perdue has warned that Beijing is intensifying its control over the rare-earth mineral industry, weaponizing its dominant position globally to limit alternatives and enforce strict regulations on supply chains outside China.
- China expands strict export and technology controls on rare-earth minerals.
- New rules criminalize attempts to diversify supply chains away from China.
- US and allies face challenges reducing dependency on China’s rare-earth dominance.
What happened
US Ambassador David Perdue highlighted Beijing's increasing control over the rare-earth industry, accusing China of weaponizing its dominant position in critical minerals. China controls between 60 to 70 percent of global rare-earth mining, nearly 90 percent of processing, and over 94 percent of advanced permanent magnet manufacturing.
Recent Chinese regulations have escalated from export controls to imposing criminal penalties for companies and individuals developing rare-earth supply alternatives outside of China. Additional enforcement actions include arrest, prosecution, asset seizure, and exit bans, reflecting a strategic aim to maintain single-source dominance.
Why it matters
Rare-earth minerals are essential components in electric vehicles, renewable energy technologies, electronics, and defense systems. China’s tightening grip threatens global supply chain diversification efforts vital for US national security and technological competitiveness.
The US and other countries have accelerated initiatives to reduce dependency on Chinese supplies, but Beijing’s expanded controls and whistleblower system, which incentivizes reporting on breaches, complicate these efforts. This dynamic risks increased geopolitical tensions and supply disruptions.
What to watch next
The suspension of China’s export controls on rare-earth technologies, initially planned to last through November 2026, has not been extended despite a broader US-China trade truce. Observers will watch closely whether Beijing reinstates these controls or further intensifies enforcement measures.
International efforts to establish alternative rare-earth supply chains, including mining and processing initiatives outside China, will face legal and operational challenges. Monitoring how companies and governments navigate Beijing’s criminalization of diversification efforts will be critical in shaping the future landscape of the rare-earth industry.