News and Events
Recap: How China’s Rare Earth Monopoly is Reshaping the World
The modern world – from cell phones to computers to medical devices and satellites – depends upon the technical properties found in rare earth elements.
China’s early strategy of capturing a large market share – approximately 90 percent – of the production of rare earth elements now puts China in a controlling position over the production of materials critical to green technology and modern-day weapons systems.
On October 13, James Kennedy, an internationally recognized expert, visited the Baker Center and spoke about China’s monopoly over the production of rare earth materials and what that means for the rest of the world.
Throughout the past 40 years, China’s economy has grown at an exponential rate, far outpacing the United States, a boom made possible by Cold War policies from the US put in place as a way to geopolitically counterbalance the Russian threat at the time.
China’s power within the rare earth market has created a supply chain dominance that has made it impossible for other countries to contend with them on any impactful level. It has also given China a significant leverage over economic adversaries. Even if the US began to pour resources into these industries today, it would still have to fight significantly to even find footing.
China’s economic dominance in these markets don’t come from the physical mining of tech metals, but instead on the refining and processing of them. For example, China doesn’t mine any cobalt, but it refines 85 percent of the world’s. It also controls 100 percent of the world’s graphite production, a necessary metal for electric vehicles.
In the complete rare earth metals production market, China controls about 90 percent.
Currently, China’s increasing hold on the market has been most notable in the critical material and tech metal markets. Tech metals are as their name suggests: the main metals in technologies. Most future green technology hinges on these metals. Items like solar panels, wind turbines and electric vehicles all are reliant on these metals that are under China’s control.
This monopoly’s rippling effect, however, ventures further than simply green technologies. High temperature magnets, the production of which China owns 100 percent, is a major component of weapons systems.
The United States is faced with an ever-growing Chinese economy and a “free market” system that has failed to catch them up. “This great colossus that we face is of our own making,” Kennedy explained.
To watch the discussion, click here, or to read an opinion piece from Charles Sims, the director of the Energy and Environment program at the Howard H. Baker Jr. Center for Public Policy, and Deborah Penchoff, a Baker Center fellow and associate director of the Innovative Computing Laboratory at the University of Tennessee, click here.