Highlights

• Baogang Group reports significant revenue growth while aligning with Chinese Communist Party's strategic industrial goals.
• China currently controls over 80% of global rare earth refining capacity, positioning itself as a dominant force in critical mineral markets.
• U.S. faces potential national security risks due to heavy dependence on Chinese rare earth imports across key industries like defense, semiconductors, and electric vehicles.

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Baotou, China — Baogang Group, China’s largest producer of light rare earth elements, announced (opens in a new tab) sharp gains in first-quarter revenue and profits during a high-level meeting on April 16, aligning its economic success with top-down directives from the Chinese Communist Party (CCP). While the meeting included typical corporate performance reviews—reporting over 15% year-over-year revenue growth and profit increases exceeding 35%—the broader agenda reveals deeper strategic intentions.

The meeting, led by Baogang Chairman Meng Fanying and General Manager Li Xiao, emphasized full alignment with President Xi Jinping’s industrial and national security goals, including the accelerated development of so-called “new productive forces”—a term referring to cutting-edge strategic industries like green energy, aerospace, and defense, all of which rely heavily on rare earth supply chains.  As Rare Earth Exchanges has described, this overlaps with the Two China Rare Earth Bases concept.

This convergence of politics and enterprise demonstrates once again that Baogang is no ordinary company.

As a state-owned enterprise (SOE) with privileged access to China’s world-dominant rare earth reserves in Inner Mongolia, Baogang serves as a cornerstone of China’s global economic leverage. The company’s commitment to "deeply integrating technology and industry" and executing key reforms for financial, legal, and export control compliance underscores the regime’s intent to maintain tight state control over rare earths, both as an economic asset and a geopolitical weapon.

China currently dominates over 80% of the global rare earth refining capacity. Baogang’s Q2 mandates—ranging from intensified customer targeting to strategic project execution—signal an aggressive push to consolidate market share, limit foreign dependency, and elevate pricing power. Notably, Baogang executives were also tasked with finalizing contributions to China’s upcoming “15th Five-Year Plan,” a blueprint widely expected to lock in rare earth dominance as a pillar of national strategy.

Implications for the West

This development arrives amid renewed tariff and trade tensions between China and the United States under President Donald Trump’s second administration. It further exposes the vulnerability of U.S. and allied industries, particularly in EV, wind, semiconductor, and defense sectors, that remain dependent on Chinese rare earth supply.

While Baogang celebrates a “red start” to the year, U.S. policymakers and industry stakeholders face a sobering reality: China’s rare earth infrastructure is not only growing stronger—it is growing more politically integrated and globally assertive. Without rapid domestic buildout and allied coordination, the West may find itself increasingly at the mercy of a state-managed resource monopoly. 

On April 15, 2025, President Donald J. Trump signed an Executive Order invoking Section 232 (opens in a new tab) of the Trade Expansion Act to launch a formal investigation into whether U.S. reliance on foreign imports of _processed critical minerals_—including rare earth oxides, salts, metals, and all derivative products like magnets, EV batteries, semiconductors, and defense systems—poses a nationalsecurity threat. The order cites severe supply chain vulnerabilities, foreign price manipulation, and overdependence on adversarial nations, particularly China, as risks to U.S. defense readiness and economic resilience. The Commerce Department must report within 180 days on global sourcing patterns, market distortions, and domestic production capacity. Tariffs, import restrictions, and domestic production incentives are all potential remedies under consideration. This aggressive move signals a significant escalation in the U.S.-China trade war and a shift toward reshoring critical mineral supply chains, which are deemed foundational to both national security and industrial competitiveness. Rare Earth Exchanges has repeatedly stated that the U.S. reliance does represent a national security threat, and Trump has already issued an executive order to expedite mining.

Rare Earth Exchanges continues to monitor developments in the rare earth supply chain with a focus on transparency, diversification, and geopolitical risk.

Rare Earth Exchanges is an independent media and data platform providing transparent analysis and strategic intelligence on the global rare earth and critical minerals sector.