China tightens hold on rare earth metals to counter US supply chain push

China has intensified efforts to cement its dominance over rare earth metals as the United States moves to build a broad international coalition to secure critical mineral supply chains, official and media reports said.

Chinese Premier Li Qiang this week visited Ganzhou in Jiangxi province — one of the world’s largest heavy rare earth production bases — underscoring Beijing’s strategic focus on the sector that underpins advanced manufacturing and technology. Li inspected key producers, research institutions including the Chinese Academy of Sciences’ Ganjiang Innovation Academy, and held talks with local business leaders and scientists, according to Chinese state media Xinhua.

South China Morning Post quoted Li as saying, “The value of rare earths in boosting advanced manufacturing and green, low‑carbon transformation is increasingly prominent,” highlighting the role of these metals in high-tech and clean-energy industries

China currently accounts for around 70 % of global rare earth mining and nearly 90 % of processing capacity, giving it substantial leverage in disputes with the United States and other major economies.

Beijing’s tightened export controls last year led to disruptions in supply to the US, the EU, India, and other nations, prompting Washington to accelerate efforts to diversify sources of the minerals, which are essential for electronics, automobiles, wind turbines, and defence equipment.

According to news agency PTI, China’s restrictions on rare earth supplies previously forced US President Donald Trump to agree to resume shipments to Washington in exchange for tariff concessions and lifting a semiconductor export ban.

In response, the Trump administration this month launched a major initiative to form a metallic alliance with more than 50 nations, including India, aimed at securing critical mineral supply chains and reducing reliance on China. As part of this strategy, the US has unveiled a USD 12 billion stockpile plan dubbed “Project Vault” to finance domestic and allied mining and processing.

Li also chaired a State Council meeting to push AI-driven innovation, emphasising the integration of data, computing, electricity, network resources, and hardware-software synergy to strengthen China’s technological edge, South China Morning Post reported.