China loves to be in everybody’s strategic supply chains. Rare earths is one of them. These are the minerals, often dug out of mines in Africa, that China controls. They go into your iPhone. They go into the Panasonic battery that powers your Tesla.
China’s rare earth exports fell to 35,448 tons last year from 46,330 tonnes in 2019, customs data showed on Thursday. China blamed the pandemic for weak demand. The 2020 exports were the lowest since 2015, according to Reuters.
But there may be more to it than the pandemic. For those China watchers, and competitors, looking for tears in the fabric, the slump has a little less to do with the pandemic than Beijing may be letting on.
“We are seeing the unfolding of the Chinese Communist Party’s Made in China 2025 and Belt and Road initiatives,” says Pini Althaus, CEO of USA Rare Earth.
Both policies have been strategies for China’s continued dominance as a global manufacturer and exporter of finished goods. This strategy is leading to an increase in local demand for rare earth metals, from lithium to cobalt.