What is China's long term strategy?

[John]

Hey...so i was thinking about what the west ca do etc....to create this ex-China market, but it is actually really important to see what China will do in retailiation and what their long term plan is.

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The West's Plan:​

• USA's October 2025 critical minerals review will formalize a whole-of-government investment and industrial strategy.
• Interim report (14 July 2025) gives senior officials early decision-making runway (e.g. DoD, DOE, Commerce).
• The likley game plan is to spend money on:
  • Upstream mining
  • Midstream processing
  • Downstream magnets
• And add tariffs, subsidies, stockpiles etc.

So the USA/West's plan is obvious....but what will China do and what are its options:

China's Strategic Options — and Likely Moves​

1. Price Suppression (Short-Term)
Status: Already happening.
Goal: Kill off marginal Western projects with cash burn by making them uneconomic.

• Flooding NdPr oxide onto spot markets to keep prices below break-even for newcomers.
• Leverage the fact that Western offtakes often aren’t price-floored or are linked to China-dominated benchmarks.
• Impact: Project delays (Pensana, Vital, some US/CA juniors); discourages investment.

West's Counter? West must set up a seaborne price index and move offtakes to fixed/floored pricing.

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2. Selective Export Bans / Quotas
Status: Used currently and used before (2010 Japan crisis). May resurface if West’s supply chain build gains traction.

• Could target: magnet alloys, NdFeB powder, or even heavy RE oxides (Tb, Dy).
• Would trigger price spikes, panic buying, and rally behind Western projects.

Risk for China: Hurts downstream Chinese manufacturers in EVs, wind, electronics.
But if the political climate shifts (e.g., Taiwan), they might do it regardless of economic cost.


3. Control of Midstream/Downstream Outside China
Status: Acquire processing/magnet capacity in Malaysia, Vietnam, Africa, even Europe.

• Recent JV with Shenghe & Vital (Canada) shows this.
• They may allow ex-China mining—as long as refining & magnetizing still runs through China-friendly channels.

Implication: Supply chain “appears diversified,” but value still flows through Chinese control points.


4. Divide-and-Rule Tactics

• Offer preferential pricing to European firms who avoid US-aligned sourcing.
• Exploit internal Western fragmentation—e.g., differing ESG thresholds, state aid limits (EU), or environmental opposition.

Goal: Keep Western efforts disjointed, slow, and undercapitalized.


5. Technology Leverage

• China will seek to retain magnet R&D edge, especially in:
  • Grain-boundary diffusion (Dy/Tb efficiency)
  • Recycling tech (circular dominance)
  • Nano-magnet and additive manufacturing.

Game Plan: Stay 5 years ahead technologically, so even if raw materials shift West, finished goods still come from China.


6. Buy Time with “Cooperation” Signals

• May float offers to “work together” on climate tech supply chains.
• Goal: Stall momentum by pulling political pressure off the US/EU buildout.

Example: “Green REE alliance,” Paris-like optics. No real transfer of leverage, but buys China time.


Any other tatics China may employ?