The People's Republic of China (PRC) is a leading producer and the dominant processor of rare-earth elements (REEs), which are used in technologies ranging from to permanent magnets through to electric vehicles (EVs) and wind turbines to consumer electronics. China is particularly dominant in the midstream separation and refining stages of the rare-earth supply chain and in downstream permanent-magnet manufacturing; the International Energy Agency estimated that China accounted for about 91% of global separation and refining production and 94% of sintered permanent magnet production in 2024.
China has economically extractable deposits of both light and heavy REE ores and has developed industrial-scale solvent extraction for refining them. Over the past decades, it has supplied the majority of global rare-earth demand and holds the world's largest known reserves; the United States Geological Survey reported China's reserves at 44 million tonnes (rare-earth-oxide equivalent) in its February 2026 Mineral Commodity Summaries.
The country also holds a dominant share of global rare-earth-related patents across the value chain; a 2026 patent landscape report based on the EPO's DOCDB simple patent family methodology identified 22,040 global patent families filed between 2014 and 2024 in rare-earth-related technologies, with China accounting for 81% of filings.
Since 2016, China has implemented export controls on certain rare-earth elements and rare-earth processing technology; in 2025, it introduced two waves of export controls covering rare-earth elements and related products and technologies, with the second wave later suspended for one year. In 2026 automatized real-time controls and penalties were introduced in the rare-earth industry.
History
In 1927, rare earths were discovered and small scale production of concentrates started as early as 1958, but the government did not have interest in the large scale potential of these elements until the 1980s and 90s.
In China, Xu Guangxian is regarded as the founding father of China's rare earth industry. A pioneer for rare earth research, Xu Guangxian came back to Peking University in China after graduating from Columbia University. In 1980, he joined as a member of the Chinese Academy of Sciences. A few years later, Xu created the State Key Laboratory of Rare Earth Materials Chemistry and Applications for research on these elements. Xu would go on to have powerful positions in the scientific community such as a Director in the National Natural Science Foundation of China, Chairman of the Chinese Chemical Society, and Vice Chairman in the Chinese Society of Rare Earths. Later in the 2000s, Xu was also influential in telling the government to adopt export quotas because he saw the potential rare earths had in the technology sector and wanted to keep these precious resources within China.
The Chinese Society of Rare Earths was created in 1980, and 1985 saw the establishment of the China Rare Earth Information Center (CREIC). A major policy tool behind the major growth of the rare earths industry in the 1980s was China's export rebate system, which provided a tax credit of up to 17% for rare earth products. Through this policy tool, the government sought to attract new domestic producers and stimulate production (and also to increase China's foreign exchange reserves). Government support increased in 1986 with the program known as Program 863 which calls for the advancing of the country through technological breakthrough and increase research to propel the country forward economically and strategically. Another important program Program 973 was created as a basic research program to utilise science to advance the rare-earth industry. During this time and in the following decades, the government heavily invested in building the infrastructure and developing the intellectual capital necessary to establish a competitive rare-earth industry.
Another form of governmental support was its encouragement to Chinese rare earth companies to partner with rare earth industries from other countries. In 1979, Japan's Inoue Japax Research worked with China to do research regarding ore analysis, ore dressing, and product application. In 1989, Ke Ning Da Industry of Ningbo, China partnered with US firm Tredas International to make 40 tons of magnets. The Chinese rare earth network later expanded to include relationships with Canada and additional countries from the West. With its policy support, China became the world's largest rare earths supplier in a relatively short period of time.
Between 1985 and 1995 China increased its share in the production of REEs from 21% to 60%. The causes of this rise are attributed to tax reductions, favourable credits which were further aided by low labour costs and minimal environmental regulation.
In the 2000s, China began to restrict the industry out of a desire to control foreign investment in strategic industries, and exports of rare earths decreased. As rare earth prices went up because of the restriction of export, many illegal mines were developed by organized criminals to benefit from the trade. The smuggling by organized criminal groups is harmful to China's rare earth industry as it depletes resources rapidly, deflates prices and causes supply problems for local producers. It is estimated a third of exports or 20,000 tonnes in 2008 were illegally exported from China.
In 2011 Chinese authorities established an industry group called the China Rare Earth Industry Association to coordinate pricing collectively with foreign buyers. Wang Caifeng was the inaugural head of the association.
In 2010 it was estimated that China held 36 per cent of all rare-earth deposits in the world. Due to Chinese export restrictions and heavy dependence of foreign countries on Chinese sources, efforts are ongoing to restart rare-earth industries in other countries and to pressure countries with intensive industry, like Japan, to source rare-earths elsewhere. Non-Chinese companies which will benefit from increased demand are Lynas Corporation, Iluka Resources, Arafura Rare Earths, and other Australian companies, including some being assisted by government support under its "Critical Minerals Strategy 2023–2030". Published under a Creative Commons Attribution 4.0 International Licence. The Mountain Pass mine in California, which has been closed since 2002 due to heavy competition from China, was planned to be restarted by Molycorp in 2011.
In 2011, the State Council issued its Opinions on Promoting the Sustainable and Healthy Development of the Rare Earth Industry, which sought greater government supervision over the industry and increased government control over exports.
Between 2011 and 2015, China closed and merged rare earth mining and refining companies into the "Big Six."
In 2016, China's central government released the second "Development Plan for the Rare Earths Industry" (2016–2020) which set industry goals designed to contribute to the fulfillment of the Thirteenth Five-Year Plan. The plan emphasized the need for innovation, market-oriented growth, industry consolidation, managing resources, further developing environmental standards, increasing rare earth applications in strategic economic sectors, and developing new supply chains for domestic and foreign markets. The "National Plan for Mineral Resources" (2016–2020) defined for the first time a category of 24 strategic minerals that the central government views as essential for China's national and economic security and for the growth of emerging industries; the strategic minerals list included the major minerals necessary for green technology.
China has shut down some of its own ionic clay mines due to their environmental impact, and started mining heavy rare-earths in Myanmar. In 2019, China supplied between 85% and 95% of the global demand for the 17 rare-earth powders, much of it sourced from Myanmar. After the 2021 military coup in that country, future supplies of critical ores were possibly constrained. It was speculated that China could again reduce rare-earth exports to counteract economic sanctions imposed by the US and EU countries.S. Burns (Feb. 16, 2021). "Rare earths are the next geopolitical chess game" . MetalMiner.com. Retrieved 25 February 2021.
For the Fourteenth five-year plan period, the central government addressed rare-earths industry plans as part of the broader raw materials industry, which the government describes as "the bedrock for the real economy". The "Development Plan for the Raw Materials Industry" was released in 2021 and highlighted the securing of the supply chain, expanding foreign markets, and supporting green and digital transitions. The plan also focuses on promoting consolidation in the industry to have fewer but more competitive rare earths firms.
Between 2021 and 2024, China accounted for 71% of U.S. imports of rare-earth compounds and metals (by source share). In 2023, China introduced export restrictions on germanium and gallium, and banned the export of certain rare-earth processing technology. In 2025, during the China–United States trade war, China restricted exports of heavy rare earths to the US.
The US Geological Survey's February 2026 report on rare-earth elements placed China first of all countries in the world in both reserves and production of rare-earths, with 44 million metric tons in reserves (REE), and with 2025 production of 270,000 metric tons (rare-earth-oxide equivalent).
, China is the world's largest processor of rare-earth elements for a variety of industries, including electric vehicles (EVs), wind turbines, magnets, consumer electronics, and other clean energy technologies. Rare earth elements are important to national governments because they are used in the defense industry.
In October 2025, China expanded its export controls on rare earths, with a focus on materials used in the defense and chip industries; the second wave of controls was later suspended for one year, while China began issuing general export licences to selected exporters to facilitate civilian trade under the remaining controls.
Major firms and state research organizations The Chinese rare earth industry is dominated by local state owned enterprises, private firms and centrally owned state firms.
In northern China, rare earth industry is dominated by the Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Company. In southern China, China Minmetals is the dominant player in the region. Other major players include the Aluminum Corporation of China Limited and China Non-Ferrous Metal Mining.
In December 2021 China announced the formation of a new conglomerate, China Rare-Earths Group, created by a merger of companies and subsidiaries including China Minmetals Rare Earth, Aluminum Corporation of China Limited Rare Earth, Ganzhou Rare Earth Group, and China Southern Rare Earth Group, among others. The new entity, a state-owned enterprise, controlled approximately 70% of China's rare earth production.
China has two state research facilities which provide specialized research into rare earth elements. They are the Rare Earth Materials Chemistry and Applications state key laboratory, which is associated with Peking University, and the Rare Earth Resource Utilization state key laboratory located in Changchun, Jilin province.
The Chinese rare earth industry also has two journals which publish research in rare-earth minerals. They are the Journal of Rare Earth and China Rare Earth Information (CREI) Journal. These journals are published by the Chinese Society of Rare Earths established in 1980 by Chinese rare earth researchers.