Highlights
- China controls over 90% of global rare earth refining, transforming mineral resources into strategic industrial and technological power.
- Chinese rare earth companies operate from two national hubs, vertically integrating mining, processing, and high-tech product manufacturing.
- Beijing leverages corporate licensing and traceability to exert geopolitical control over global defense and technology supply chains.
China’s grip on the rare earth supply chain isn’t just about mineral dominance—it’s about coordinated industrial power. With over 90% of global rare earth refining and separation capacity, Chinese rare earth companies are more than suppliers; they’re gatekeepers to the 21st century’s most critical technologies—from EVs and wind turbines to missiles and microchips.
In 2025, China’s top 10 rare earth firms—largely state-owned or state-backed—are operating in lockstep with Beijing’s strategic vision. At the top is China Northern Rare Earth (Group) High-Tech Co., Ltd., the world’s largest producer, anchored at the Bayan Obo deposit in Inner Mongolia.
Others like JL MAG Rare-Earth, Xiamen Tungsten, and Guangdong Rare Earth Group cover the full spectrum: mining, magnet-making, and deep processing for defense and high-end electronics. This vertical integration ensures China doesn’t just dig the minerals—it turns them into finished products that power the global economy.
Many of these firms now operate out of two designated national hubs: the Northern Base in Baotou and the Southern Base across Jiangxi and Guangdong, forming a two-pronged engine for dominance in rare earths. These “rare earth bases” are no mere industrial parks—they’re platforms for pilot R&D, defense-compliant production lines, and downstream innovation across energy, aerospace, and biotech verticals.
While the U.S. and allies have rare earth reserves—in places like California, Vietnam, and Brazil—over 95% of global refining still happens in China. This bottleneck means the West relies on Chinese firms for the materials used in stealth jets, radar arrays, and quantum communication devices. As strategic tensions rise, China is quietly tightening controls. As Rare Earth Exchanges (REEx) has reported, since 2023, exporters of heavy rare earths, such as dysprosium and terbium, must disclose end users and contract paths. Delays or denials for defense-linked customers are now a matter of policy, not chance.
Beijing doesn’t need an embargo to flex its muscle. With licensing, traceability, and state-guided corporate alignment, it already possesses a silent throttle on the global defense tech supply chain. These companies don’t just compete—they cooperate as arms of China’s industrial and geopolitical strategy.
REEx Takeaway
The U.S. can mine all it wants—but without processing capacity, magnet-making capabilities, and secure supply chains, it remains highly exposed. Note that the MP Materials and Department of Defense agreement is a starting point. However, we emphasize that a long and arduous path remains for the reindustrialization of the U.S. and the West. China’s top rare earth firms are executing a long game, one that blends enterprise with statecraft. If Washington doesn’t respond with a whole-of-nation industrial policy, it won’t just fall behind—it may find itself strategically outmaneuvered forever.
Very good, balanced and clear article. The US has a history, even during split political periods, of utilizing innovation public-private consortia to build capacity and create the “long game” for advantage.