Rare earth elements aren’t as scarce as the name suggests, but they’re indispensable for everything from smartphones and electric vehicles to fighter jets and wind turbines.
These 17 metals power the modern world, yet China controls the lion’s share—around 60% of global mining, 85% of processing, and over 90% of permanent magnet production. This dominance isn’t just economic; it’s a geopolitical weapon.
On the morning of 7 September 2010, a Chinese trawler (Minjinyu 5179) operating in disputed waters deliberately rammed his larger vessel into Japanese Coast Guard patrol boats near the Senkaku Islands.
The hostile and obviously criminal act resulted in the detention of the skipper, Zhan Qixiong (Chinese: 詹其雄). Fiery Chinese netizens flooded Chinese social media with reminders for Nanjing 1937, justify Zhang Qixiong’s acts and even called him a hero. When China’s repeated demands for the release of the skipper were refused and his detention extended for ten more days, the Chinese made a slew of retaliatory moves, placing informal limits on Japanese tourism and the export of rare earth metals to Japan. The whole world suddenly realised that their dependence on China for rare earth elements made them vulnerable when minor disputes escalate into diplomatic incidents.
Since then, Beijing had repeatedly flexed its muscle by restricting supplies, turning rare earth elements into leverage in trade disputes and territorial spats.
Countries worldwide realised that they had to do something. The most obvious move was to diversify sources and ramp up domestic production. It seemed pretty straightforward since countries like Australia, Vietnam, Myanmar and Greenland – yes Greenland are also rich in rare earth elements.
But China was not about to let go of its bullying rights. In response to budding rare earth suppliers, it used political maneuvers, propaganda and dirty tricks to undermine competitors. Let’s dive into how this saga unfolded.
China’s Weaponization: From Leverage to Bans on rare earth
China’s control over rare earth elements gives it unparalleled influence. The fishing boat dispute in the East China Sea was a lesson for all. Beijing halted exports to Japan, causing prices to skyrocket and exposing vulnerabilities in global supply chains. This wasn’t an isolated incident; it set a precedent for using rare earth elements as a “silent weapon.”
Fast-forward to 2025 and the pattern repeats amid escalating US-China trade tensions. In April, Beijing imposed export restrictions on seven heavy rare earth elements—terbium, yttrium, dysprosium, gadolinium, lutetium, scandium, and samarium—in retaliation against US tariffs. These metals are critical for defense tech like F-35 jets and nuclear submarines.
By October, controls expanded to include processing technologies, equipment, and even recycled materials if they involve Chinese inputs. Exporters now need licenses, and any ties to foreign militaries trigger automatic denials. Beijing also barred Chinese nationals from providing overseas expertise without approval, effectively extending its grip globally.
These moves aren’t just about trade; they’re strategic. China has banned exports of gallium, germanium, antimony, graphite, and tungsten to the US, citing national security.
In negotiations, like the October 2025 Busan summit, Beijing used rare earth element restrictions as bargaining chips, agreeing to a one-year pause in exchange for tariff relief. This tit-for-tat approach mirrors broader “resource weaponization,” where China either slows licenses or floods markets to undercut rivals in an attempt to make them go bust.
The latest threat came from remarks by Japan’s new PM Sanae Takaichi. From the start of the conflict, many members of the ethnic Chinese diaspora, including those relatively well-educated, have posted on social media, gleefully and wickedly goading China to play the rare earth card and destroy Japan – for wanting to defend Taiwan in the event of an invasion. Rallying the tribal sentiments of the diaspora is not included in one of the 36 Dirty Tricks, but it’s not unlike the strategy employed by some pan-Islamist caliphate. Regrettably, some of the folks around me have been solidly behind China’s unethical ways, knowing or not knowing that they are in direct contravention with its WTO obligations.
Dodging the Dragon: How Countries Are Circumventing Dependence on China for Rare Earth
Nations aren’t taking this lying down. The 2010 Japan episode spurred the quest for diversification and recent escalations have accelerated it. The goal? Build resilient supply chains outside China’s orbit.
The US led the charge. The Mountain Pass mine in California, operated by MP Materials, is the only active rare earth elements mine in the country and aims to process domestically by 2026. Government support is massive: The Defense Production Act has funneled funds into separation and magnet production, while the Inflation Reduction Act incentivised recycling and new projects. The US is also eyeing Greenland’s reserves, though diplomatic tensions complicate access.
Australia is another key player. Lynas Rare Earths, the world’s largest non-Chinese producer, mines in Western Australia and processes in Malaysia, with plans for a U.S. facility in Texas. Japan, scarred by the 2010 incident, has invested heavily in Lynas and diversified through partnerships in Vietnam and elsewhere. Thanks to all the sabotage (which I’ll cover in a moment), Lynas had a very slow start, but thankfully for the rest of the world which realise they may trigger China at any moment, the company is growing somewhat.
The European Union is also pushing for self-reliance. With 98% of its rare earth magnets from China, the EU is funding domestic mining in Sweden and Finland, boosting recycling, and forging deals with Canada and Australia. Emerging hotspots like Kazakhstan’s massive deposits (potentially the world’s third-largest) and Central Asia’s resources are drawing interest from the US and EU but Russia has a very strong presence in these former Soviet republics.
Recycling is a wildcard. Efforts to reclaim rare earth elements from e-wastes are growing, but China’s new rules require licenses for recycled products using its tech, hindering progress. Overall, these strategies aim to reduce reliance through “friend-shoring” against the unethical, arm-twisting player, but it’s still a long way from replacing China’s dominance, especially when more obstacles and unethical behaviour stand in the way.
Beijing’s Counteroffensive: Political Pressure and Propaganda Wars
China doesn’t just restrict supplies—it actively sabotages alternatives. Politically, Beijing uses laws like the 2020 Export Control Law to block tech transfers and force joint ventures that often lead to IP theft. In 2025, it accused foreign agents of “stealing” rare earth elements via smuggling, launching crackdowns to tighten control. These moves extend to third countries, pressuring them against hosting competitors.
Propaganda is subtler but insidious. Pro-CCP projects like “Dragonbridge” deploy thousands of fake social media accounts to stir opposition. In 2022, they targeted Lynas’ Texas expansion, posing as locals to claim radiation risks and call for protests against the plants and mines. Similar tactics hit USA Rare Earth and Canada’s Appia, with Chinese agents going on social media to “expose” health hazards and alleging environmental disasters. Citizens protest and production is disrupted. This is an example of 借刀杀人, one of the 36 Dirty Tricks from ancient China. On its own turf, all bad news are censored. Thanks to censorship, health hazards and environmental degradation can be covered up.
In Malaysia, where Lynas processes rare earth elements, protests over “radioactive waste” have been amplified by Chinese-linked disinformation to trigger protests. Among the locals. Accounts masquerading as Malaysians called for boycotts and exaggerated toxicity claims, aiming to derail operations and protect China’s monopoly. Malaysian Chinese took the bait and embraced the narrative of the evil West trying to harm them. Another case of 借刀杀人。
These tricks aren’t new. Beijing has long used government subsidies (taxpayers’ money) to flood markets, depriving rivals of profit while portraying Western efforts as aggressive, environmentally reckless or downright evil when they are the ones guilty of every single accusation thrown at others without risk of losing elections.
These operations are terribly sophisticated and organised, tied to state espionage, propaganda, influence and highlight China’s playbook: Undermine trust, delay projects, and maintain dominance without overt conflict.
The Road Ahead For Rare Earth: A Fragile Balance
The rare earth saga is a microcosm of global power shifts. China’s weaponization has awakened nations to the risks of over-reliance, spurring a scramble for alternatives. Yet Beijing’s political savvy and propaganda machine keep competitors on the defensive. Success will hinge on sustained investment, international collaboration and countering disinformation. And it’s a terribly uneven playing field. When an opaque system is against a transparent system, the odds are stacked against the latter.
Now you know why Trump wants to take Greenland. It’s rich in rare earth, it’s huge and sparsely populated. You don’t win by reasoning with the mafia. You act like one. First step, 釜底抽薪。