Analysts Doubt China Will Ease Control Over Critical Mineral Exports
Capital Economics analysts raised questions on Thursday about whether China will relax its grip on critical mineral exports, despite a recent rise in rare earth element shipments shown in June’s trade data.
Rare Earth Exports Rise, But Remain Low
Although exports of rare earths more than doubled from May to June, they are still nearly 40% lower compared to June last year. Capital Economics noted that exports remain well below pre-Liberation Day levels, despite the increase.
China Responds to Trade Pressure
After facing pressure from the U.S. and other trading partners, China agreed to speed up export license approvals in June. The latest data suggests Beijing delivered on that promise. However, the firm cautions that China’s rare earth exports remain weak overall.
Broader Export Declines Persist
Exports of other critical minerals have also continued to decline. Capital Economics highlighted that these exports have been falling sharply since the beginning of the year. The biggest drop came after China imposed export controls in April.
Mixed Signals Despite U.S. Agreement
While President Donald Trump recently announced that China had agreed to provide full magnets and necessary rare earths, Capital Economics remains skeptical. The firm believes Beijing is not showing signs of relaxing its control over the global supply.
Strategic Control Over Critical Metals
According to the analysts, China’s export policies serve more than trade purposes. They are part of a strategic effort to give Chinese manufacturers a long-term advantage in key industries.
Conclusion: Tight Control to Continue
Capital Economics concludes that even as U.S.–China relations improve, China is likely to maintain strict control over its critical mineral exports to protect its strategic economic interests.
