A few days ago, the State Council officially issued the "Regulations on the Management of Rare Earths", which will come into force on October 1, 2024, making it clear that rare earth resources belong to the state, and no organization or individual may encroach on or destroy rare earth resources, and the state shall implement protective mining of rare earth resources.
As soon as the news was released, Western public opinion immediately exploded, accusing China of intending to control the global production and supply chain and curb the strategic countermeasures of Western countries.
The European edition of Politico commented that the regulations issued by China are aimed at achieving long-term control over rare earth resources. At present, the development of global clean energy depends on the support of the rare earth industry, as long as China cuts off and controls the rare earth industry from the upstream, it can ensure its own advantages in the field of new energy, especially in the electric vehicle and wind turbine power generation industries.
China has long had a near-monopoly on the supply of refined materials such as rare earths, lithium and graphite, which are critical to high-tech manufacturing and the green energy transition, according to Bloomberg.
As for Reuters, the Financial Times and other media outlets, they have linked the "Rare Earth Management Regulations" to the trade dispute between China and the West, and regarded it as a "retaliatory measure" by China. According to the commentary, China has adopted the "Regulations" to formulate regulations in the fields of rare earth mining, smelting and circulation, aiming to protect the supply of rare earths in the name of national security.
However, there is also a rational view that China has been discouraging the export of rare earths for many years, and the latest regulations are only "legalizing what everyone knows".
It is understood that the mainland is the world's largest producer and reserve of rare earths. According to the data released by the U.S. Geological Survey, the mainland's rare earth production in 2023 will be 240,000 tons, accounting for about two-thirds of the world's total; The world's reserves of 17 rare earth elements are 110 million tons, with the continent accounting for 40%.
Earlier last year, the mainland tightened export guidance for several metals, including export restrictions on germanium and gallium-related items, as well as some graphite, a key material for batteries.
At the end of the year, the mainland announced a ban on the export of rare earth refining, processing and utilization technology in order to defend its market dominance in rare earth technology. Foreign media saw this as China's "thwart the West's efforts to develop the rare earth industry".
In recent years, Western countries, led by the United States, have tried various ways to get rid of their dependence on China in the field of rare earths, but with little success. Some analysts have pointed out that compared with China's decades-long cultivation in the field of rare earths, the West's efforts in this industry are not enough, and there are obvious flaws.
The analysis points out that since the 80s of the 20th century, China has been in a leading position in the global supply of rare earths, and its rare earth processing technology is second to none. However, due to China's strategy of sustainable rare earth resources and the development of new rare earth supply chains in Western countries, China's share of total rare earth exports has fallen from around 90% around 2010 to about 70% today.
In the production and supply chain of rare earths, upstream production involves the mining of rare earths and the extraction and separation of oxides, while downstream is mainly the production of clean energy products.
China has an absolute advantage in the refining, processing and utilization of rare earths, and dominates the export of rare earth raw ore and other upstream products, which is beyond the reach of the West.
As a simple example, if you find a rare earth mine anywhere in the world, there is a high probability that the mined ore will be sent to China for refining to obtain pure metals, without malicious obstruction or political interference.
For the vast majority of Western countries, it will take at least a decade or more of large-scale investment to be able to compete with China in the field of rare earth processing. However, judging from the current situation, although the West has this kind of strategic thinking, it has not taken substantive action.
For China, to achieve the sustainable development of the rare earth industry, in order to safeguard its own interests and the stability of the global production and supply chain, this does not allow any Western countries to preach and blame.