China Maintains Rare Earth Export Controls, Deepening Global Supply Risks

China maintains a dominant monopoly over rare earth elements critical to modern technologies, controlling around 60-70% of global mining and over 90% of refining capacity, which gives it significant leverage in the global supply chain. Recent Chinese export controls on rare earth magnets have created bottlenecks and delays in license issuance, frustrating U.S. and global companies reliant on these materials for electric vehicles, defense, and other sectors. Although China has approved some compliant rare earth export applications, it is unlikely to allow U.S. companies to stockpile these materials, maintaining strategic leverage and the potential to restrict exports to U.S. defense contractors. India, despite holding the third-largest rare earth reserves globally, remains underdeveloped in extraction and processing, resulting in continued imports and missed opportunities amid rising global demand. China’s rare earth dominance is underpinned by a comprehensive government strategy involving multiple state actors and policies that sustain its global market control, while Western countries explore counterstrategies to develop their own supply chains. These developments highlight the critical geopolitical and economic importance of rare earth elements in the context of global technology and defense industries.