Growing challenges due to Western aspirations for greater independence from raw materials.
For decades, China has been the world leader in the mining and processing of rare earths. However, in the face of growing geopolitical tensions, Western countries are striving to decouple their supply chains from the People’s Republic, in part by building up their own rare earth production. To counter growing competition and secure China’s position in the global industry, Yan Hongwei, a deputy to the National People’s Congress, is proposing to build a national innovation center for new rare earth materials, writes the Global Times.
The site would be Baotou in the Inner Mongolia Autonomous Region, home to the world’s largest rare earth reserves and already home to ten research platforms for rare earth technologies. Yan, who is also deputy director of the Baotou Research Institute of Rare Earth’s Hangzhou Branch, has submitted a proposal to this effect to China’s top legislator together with other deputies.
With efforts by the U.S., Japan and Europe, for example, to become more independent of raw materials, China’s rare earth industry is facing challenges, Yan said. Despite great progress in the past decade, it still lacks sufficient research and innovation, he said. At the same time, he highlights the quality, prices and production capacity of China’s rare earths, which gives them an “absolute competitive advantage.”
For its part, China is working to strengthen its supply chains, the Global Times writes. Since October 2021, the Inner Mongolia regional government has invested a “record value” of the equivalent of $1.9 billion in 41 new rare earth magnet projects. As we reported, the People’s Republic also merged parts of its rare earth industry in late 2021 to increase market power and have greater influence over commodity pricing.