China's Rare Earth Controls Threaten Global Green Tech Ambitions

The recent announcement by China's government to put controls on the export of rare earth elements has sparked concerns over global access to these essential minerals. China has a near-monopoly over the mining and refining of these elements, which are crucial for the production of electric vehicles, smartphones, and solar panels. The US has responded by threatening to increase tariffs on Chinese goods, but this move may have unintended consequences. Chinese companies have established production sites in the US to circumvent tariffs, potentially benefiting from the trade policies of President Trump. However, the majority of China's green tech exports are headed to other markets, with the EU and Asian regions accounting for a larger share than the US. The US has already restricted the sale of certain technologies to China, but the latter can still manufacture green tech without US software. Nevertheless, the absence of advanced semiconductors and AI chips from the US could stall China's green economic momentum.

Key Takeaways:

• China controls 70% of global rare earth mining and 92% of refining.
• The majority of electric vehicles, smartphones, and solar panels depend on rare earths.
• China manufactures 98% of the world's rare earth magnets used in EVs, electronics, medical devices, and other clean tech.
• The US has imposed tariffs on Chinese goods, but Chinese companies have set up production sites in the US to circumvent these tariffs.
• Chinese green tech exports accounted for US$184.06 billion (£139 billion) in 2024, with the US market representing only 11.2% of total exports.
• The EU and Asian markets accounted for 29.95% and 27.97% of total Chinese green tech exports in 2024, respectively.
• The US has restrictions on the sale of certain technologies to China, including advanced semiconductors.
• China's economic progress is dependent on gaining better trade deals to access advanced semiconductors and AI chips from the US.

Statistics:

• 70%: China's share of global rare earth mining.
• 92%: China's share of global rare earth refining.
• 98%: China's share of global rare earth magnet manufacturing.
• US$184.06 billion (£139 billion): Value of Chinese green tech exports in 2024.
• 11.2%: Proportion of total Chinese green tech exports to the US in 2024.
• 29.95%: Proportion of total Chinese green tech exports to the EU in 2024.
• 27.97%: Proportion of total Chinese green tech exports to Asian markets in 2024.

Sources:

• The Conversation -- UK -- By Chee Meng Tan, Assistant Professor of Business Economics, University of Nottingham
• The Conversation article: "China's new controls on rare earths create challenges for the west's plans for green tech"