For those interested in the history of how China got to dominate the Rare Earth sector, I thought I would put together a timeline of all the major strategic moves from the mid 1980s to present day.
I was amazed at what I found. History repeating itself!
Here are the key takeaway points/parallel themes:
China’s Strategy
(1985–2005)
The West’s Emerging Strategy
(2023–2025+)
Parallel Theme
1985: Introduced export tax rebates to supercharge rare earth exports and become the global leader
2024–2025: US, EU, Australia proposing production tax credits, subsidies, and grants for rare earth refining and magnet production
Use of fiscal incentives to stimulate domestic industry
1990–1992: Declared rare earths strategic, blocked foreign miners, and reserved resources for domestic value-added use
2023–2025: US Defence Production Act, EU CRMA, Australian Critical Minerals Strategy — aim to onshore supply chains and prevent foreign control
National security lens on critical minerals
1999: Imposed export quotas to protect domestic supply
2023–2024: US imposes tariffs on Chinese NdFeB magnets; export control laws being drafted or enforced
Strategic use of trade controls to protect internal demand
2002–2005: Blocked foreign ownership of mines; pushed value-adding domestically
2024: EU and US both fund domestic magnet factories; grants tied to in-country processing
Push for vertical integration within borders
2005: Ended tax rebates as control shifted to quotas and consolidation
Expected 2027+: Western governments may phase out subsidies as industries stabilize
Shift from growth incentive to market control
And To Summarise:
What China did in the '80s–2000s — the West is now trying to replicate, just in reverse.
China started by incentivizing exports to scale production → then restricted access to consolidate power.
The West is now incentivizing domestic production to reduce import dependence → and imposing barriers to Chinese imports.
AND - “What took China 30 years to build, the West is trying to compress into five.”
That urgency explains the enormous public funding, tariff barriers, and policy urgency we're seeing today in the US, EU, and Australia.
Detailed Timeline: China’s Rare Earth Restrictions and Strategic Moves
1985 – Export Rebates to Boost Rare Earth Exports: China introduces an export tax-rebate policy for rare earths, refunding 13% of export taxes on rare earth ores and 17% on rare earth metals. This incentivizes producers to ramp up output for export, doubling China’s rare earth oxide production by 1990 and cementing China’s emergence as a leading rare earth supplier.
1990 – Rare Earths Designated as Strategic and Restricted: The Chinese government declares rare earth elements a protected strategic mineral, reflecting their growing importance. Foreign investors are banned from rare earth mining and face tight restrictions in the sector. This marks the start of China’s efforts to reserve its rare earth resources for domestic use and control who can access them.
1991 – Clamping Down on Mining and Foreign Access: Amid chaos of falling prices and illegal mining, China suspends issuing new mining licenses for rare earths. Ion-adsorption clay rare earth deposits are placed under “national protective” development plans, giving state-owned enterprises priority access to these mines. Private companies are barred from mining these strategic clays. At the same time, foreign involvement in rare earth extraction and processing is further curtailed – all foreign joint ventures require approval, and wholly foreign-owned projects in mining/separation are prohibited. These measures aim to curb rampant illegal extraction and keep valuable resources under state oversight.
1992 – Strategic Vision: Chinese leader Deng Xiaoping famously proclaims “The Middle East has oil, China has rare earths”, highlighting China’s intention to leverage its rare earth resources for strategic gain. This statement foreshadows China’s coming policies to maximize control over rare earth production and exports.
1999 – Introduction of Rare Earth Export Quotas: China imposes its first rare earth export quotas to strictly cap the volume of rare earth products leaving the country. The quota system, which would continue for 15 years, is designed to conserve resources and spur domestic value-added processing. Quotas are allocated preferentially to companies that produce more advanced rare earth products, while exports of unprocessed rare earth ores are severely limited. This marks a turning point where China begins formal export restrictions on rare earth elements.
2002 – Restricting Foreign Investment in Upstream Sector: New government directives forbid wholly foreign-owned enterprises in rare earth mining and separation. Only joint ventures are allowed, and even those are subject to approvals. However, China continues to welcome foreign investment in downstream manufacturing that uses rare earths. In essence, foreign firms can help build magnets or batteries in China, but they cannot freely own mines or separation plants – a policy ensuring China retains control over raw materials.
2005 – Industrial Reform and the End of Export Rebates: The State Council issues a pivotal policy notice calling for “Rectification and Standardization” of the mining industry, with rare earths singled out for cleanup. It highlights serious problems: illegal mining, resource waste, and environmental damage in rare earth production. In response, the Ministry of Land and Resources is charged with implementing annual production quotas to cap rare earth output. Around the same time, China fully eliminates its rare earth export tax rebates – by 2005 all VAT rebates on rare earth exports are cancelled. These moves signal a shift from unchecked expansion to tighter regulation and conservation.
2006 – Production Quotas to Cap Output: China enforces its first nationwide rare earth production quotas in 2006, limiting how much rare earth oxide can be produced each year. This direct output cap, managed by MLR, works alongside export quotas to constrain supply. The new quotas target environmental sustainability and aim to prevent over-mining, though enforcement struggles with widespread illegal production.
2007–2008 – Export Duties Imposed: To further discourage exports of rare earths, China introduces export taxes. In 2007 a 10% export duty is slapped on virtually all rare earth raw materials. In 2008, the export tax rates jump to 15% for light rare earth products and 25% for some heavy or value-added rare earth products. These tariffs, on top of existing quotas, raise the cost of Chinese rare earths overseas and encourage foreign companies to relocate magnet and component production to China. By making exports more expensive, China effectively prioritizes domestic industries’ access to rare earths.
2009 – Tightening Exports to Build Domestic Industry: By the late 2000s, China’s policies show results in trade flows. Rare earth exports plunge to about 43,900 tonnes in 2009, down sharply as quotas and taxes bite. Meanwhile, domestic consumption of rare earths rises, and foreign downstream firms increasingly move operations to China to ensure supply. Beijing’s strategy – restrict exports, control production, and force the development of a Chinese value chain – is in full swing.
2010 – Drastic Export Cuts and an Unofficial Embargo: In 2010 China moves aggressively to tighten its grip. It slashes the annual rare earth export quota by roughly 40%, with a mid-year announcement that second-half 2010 exports would be capped 72% lower than the previous year’s level. This massive cut triggers a global price spike, as China was supplying 90+% of the world’s rare earths. Around the same time, a diplomatic dispute in September 2010 (the Senkaku Islands incident) prompts China to unofficially halt rare earth shipments to Japan for about two months (). Chinese customs authorities, acting on informal orders, held up exports of rare earth oxides and metals to Japan as leverage until the crisis eased Beijing denied any official export ban, citing environmental or quota reasons, but the episode alarmed global markets. It demonstrated China’s willingness to weaponize its dominance – foreign industries realized access to rare earth materials could be suddenly choked off for strategic reasons.
2011 – Soaring Prices and Global Response: Following China’s export clampdown, rare earth prices skyrocket in 2011, with some oxide prices increasing several-fold. China maintains tight export quotas into 2011 (only modestly raising the quota from 2010 levels) while keeping production quotas in place. The supply squeeze leads countries like the United States and Australia to restart rare earth production (e.g. Mountain Pass mine comes back online). China’s dominance remains, but the 2010–2011 crisis prompts a wave of diversification efforts and stockpiling by importers.
2012 – Industry Association and WTO Challenge: In April 2012, China creates the Association of China Rare Earth Industry, a government-approved body to help regulate the sector and improve compliance. In June 2012, China’s State Council issues a Rare Earth White Paper titled “Situation and Policies of China’s Rare Earth Industry.” This first-ever white paper defends China’s export restrictions as environmentally necessary and reiterates China’s intent to “protect and rationally use” rare earth resources. Meanwhile, on the international front, the United States, EU, and Japan formally file a WTO complaint in March 2012 against China’s rare earth export quotas and taxes. They argue that China’s export limits violate WTO rules by unfairly favoring Chinese industries. This sets the stage for a legal battle over China’s rare earth policies.
2014 – WTO Ruling Against China: The WTO dispute concludes with a verdict against China. In August 2014, the WTO appellate body upholds an earlier panel decision that China’s export quotas and export duties on rare earths (as well as tungsten and molybdenum) breach its trade commitments. The WTO finds that China cannot use conservation or environmental protection arguments to justify quantitative export restrictions. China is told to dismantle its quota system and remove export taxes on rare earth products.
2015 – Export Quotas Abolished (WTO Compliance): Complying with the WTO decision, China cancels its rare earth export quotas and export taxes in 2015. Decades of formal export restrictions come to an end. Now, exporting firms only need to obtain a standard export license (available to any qualified exporter based on contracts) instead of special quotas. This policy shift is significant: it ostensibly liberalizes rare earth exports. However, China continues to manage the supply chain through other means – notably, production quotas remain in effect domestically, and an export license system (though “automatic”) can still be used to monitor and subtly control exports. The removal of quotas is a tactical retreat under international pressure, even as China retains its strategic grip in practice.
2015 – Consolidation into State-Owned Giants Begins: In the same year, China unveils a plan to consolidate its fragmented rare earth industry. After years of calling for mergers, the government officially announces in 2015 a plan to merge mines and smelting operations into just six large state-owned enterprise groups. The goal is to eliminate smaller illegal miners, improve efficiency, and gain pricing power. Over the next two years, this plan comes to fruition – by 2017, virtually all of China’s rare earth production is controlled by six big conglomerates. (For example, Northern Rare Earth Group, Chinalco Rare Earth & Metals, China Southern Rare Earth Group, etc.) These “Big Six” groups come to hold 77 of the 78 mining licenses in China indicating near-total control of legal mining. This consolidation gives Beijing greater oversight of production and the ability to coordinate output and prices among the state firms.
2016 – Stockpiling and Domestic Market Control: As part of the crackdown on illegal production and to prop up prices, China’s government starts stockpiling rare earths. In 2016, the State Reserve Bureau purchased over 10,000 tons of rare earth oxides from major producers and even required those firms to hold additional reserves (30% of the purchased amount) in stock. By buying up surplus supply, China prevented prices from crashing and enforced production discipline. The 13th Five-Year Plan (2016–2020) for the rare earth industry (issued by MIIT) also set specific targets for technological innovation, resource utilization, and environmental protection. These actions illustrate China’s shift to a more market-manager role, intervening domestically to balance supply, demand, and price for strategic advantage.
2017 – Formalizing the “Big Six” and New Era of Control: In 2017, China’s Ministry of Industry and Information Technology (MIIT) and other agencies finalize the formation of the six state-owned rare earth groups and allocate production quotas accordingly. Each group is responsible for mining and separating rare earths in its region, and together they cover the entire supply chain. This marks a new era in which the government can more effectively coordinate production. By now, China’s policies have evolved from blunt export cuts to sophisticated management: illegal mines have been shuttered or absorbed, and the state companies ensure China still meets much of global demand but on China’s terms. Even without export quotas, China’s dominance means it can influence market outcomes – for instance, by adjusting annual production quotas (which it still sets each year) or slowing the export license process during times of tension.
2018 – Ongoing Environmental and Export Controls: China continues to strengthen environmental regulations on rare earth mining and smelting, periodically launching crackdowns on pollution and illegal mining. By 2018, China’s share of global rare earth production has declined to about 71% (from a peak of ~97% a decade prior) as other countries slowly ramp up output. However, China remains the dominant processor of rare earths (responsible for ~85-90% of refined products), due to its entrenched technical know-how and capacity. No new major export restrictions are introduced in 2018, but the framework of production caps, heavy environmental supervision, and centralized control through the big state groups ensures China’s influence remains high.
2019 – Trade War Threats: During the U.S.–China trade war, China signals it could weaponize rare earth exports again. In May 2019, Chinese President Xi Jinping makes a high-profile visit to a rare earth magnet factory, accompanied by ominous remarks in state media that rare earths could be a “new Long March” battleground. An official commentary explicitly warns that China could cut off rare earth supplies to the U.S. if necessary. Though no formal ban is enacted, these threats are an informal strategic move – a reminder that China controls the tap. The mere hint of an embargo causes rare earth prices to jump and pushes Western manufacturers to accelerate supply chain diversification. China also tightens administrative checks: exporters reportedly faced more opaque licensing delays in 2019, as authorities scrutinized end-use and destinations of rare earth orders in response to U.S. tariffs (an unofficial way to slow or restrict critical exports).
2020 – New Export Control Law: In October 2020, China’s National People’s Congress passes a new Export Control Law, creating a comprehensive legal framework to restrict exports of sensitive materials for national security. Rare earth elements are not named outright, but the law’s broad scope and language about protecting China’s “national security and interests” gives Beijing a legal tool to halt rare earth exports to specific countries if it chooses. The timing follows U.S. semiconductor sanctions on China, and many observers see the law as a warning that China could retaliate by curbing exports of critical minerals like rare earths. After the law’s enactment, export licensing rules for rare earths become more stringent: Chinese exporters must report more details about end-users and end-uses for approval. In practice, even though formal quotas are gone, the export license system can now be used to slow or deny rare earth shipments case-by-case under the guise of national security.
2021 – Mega-Merger and Record Quotas: China further consolidates its industry by forming the China Rare Earth Group in December 2021, merging several of the big state-owned firms (including units of Minmetals, Chinalco, and Ganzhou Rare Earth). This creates a second mega-producer alongside the leading Northern Rare Earth Group, and is intended to streamline state control even more. At the same time, China raises its domestic rare earth mining production quota to the highest level yet in 2021 (168,000 tonnes, a 20% increase from the prior year) to meet growing global demand. Notably, increasing the production quota shows China’s strategy is not to choke off supply entirely, but to swing output up or down to stabilize the market while keeping prices advantageous. By now, rare earths are also part of China’s strategic plans for high-tech industries – for example, the Made in China 2025 initiative and successive Five-Year Plans highlight advanced materials (like permanent magnets and batteries) as key sectors, which rely on secure rare earth supplies.
2023 – Tech Export Bans to Protect Dominance: Confronted with intensifying tech competition, China turns to export bans on know-how. In December 2023, Beijing announces a ban on exporting certain rare earth processing technologies, including those for rare earth separation and refining, as well as technologies for producing high-performance rare earth magnets. (These new restrictions (adding to an earlier ban on raw rare earth refining tech) mean Chinese companies can no longer share or sell the manufacturing technology that underpins China’s rare earth magnet industry. By keeping advanced magnet-making techniques in-country, China guards its competitive edge in the value-added segment of the supply chain. This move also makes it harder for other countries to build up full rare earth supply chains, since even if they acquire raw materials, the specialized tech to process them and make finished products is restricted. The ban on rare earth magnet technology exports underscores China’s strategic focus on maintaining its “technological leverage” – not just control over raw minerals, but over the expertise to utilize those minerals.
2023 – Selective Mineral Export Controls: In mid-2023, China had already flexed its muscles by controlling other critical minerals (though not rare earths specifically). For instance, in July 2023 China imposed export licensing requirements on gallium and germanium (critical for semiconductors), seen as a response to Western chip sanctions. While these are not rare earth elements, the action signalled a broader Chinese willingness to use export controls on strategic materials. By late 2023, China also tightened export permits for certain categories of graphite (used in EV batteries) These parallel cases show a pattern: China is prepared to selectively restrict exports of various critical minerals when facing geopolitical pressure. Rare earths, being central to defense and high-tech industries worldwide, remain China’s most powerful lever in this realm.
2024 – Ongoing Influence via Licensing and Domestic Priorities: As of 2024, China continues to prioritize domestic rare earth needs and exert influence through less transparent means. Exporters of rare earth oxides and metals must navigate an approval process that can be slow and unpredictable. During periods of diplomatic tension, this process can effectively become an informal barrier – for example, Chinese authorities can delay issuing export licenses for weeks or months, causing foreign customers to face supply droughts. By adjusting administrative procedures, China maintains de facto control over how much rare earth leaves its shores without needing to announce an outright ban. At the same time, China’s domestic policies (such as strict environmental rules, resource taxes, and support for recycling and substitution) ensure that rare earth resources are utilized in line with national interests. The 14th Five-Year Plan (2021–2025) reinforces the goal of “rational development and utilization” of rare earths, aiming for China to remain the world’s pivotal supplier but on a sustainable, high-value basis.
2025 – (Looking Ahead) Strategic Leverage Continues: Entering the mid-2020s, China’s decades-long rare earth strategy has evolved but remains focused on supply control and value capture. From the export rebates of the 1980s to the quotas and bans of later years, China systematically built a dominant position. Even after WTO rulings forced policy changes, China adapted with new tools like production quotas, industrial consolidation, and technology export bans. Major consumers worldwide have launched projects to diversify rare earth sourcing, but China still accounts for around 70% of mined supply and an even larger share of processed rare earth products. This dominance, combined with China’s readiness to use formal and informal restrictions, means Beijing retains significant leverage over global rare earth access. Whether via a headline-grabbing embargo or the subtler tactics of licensing delays and pricing moves, China can influence who gets critical rare earth materials – and at what cost – for years to come.
John’s rare earth timeline is gold: historically rich, well-sourced, and strategically sharp. But it could go platinum with more on illegal mining, magnet chokepoints, and the U.S.'s own missteps
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