Not a Master Plan: The Real History of China's Rare Earth Dominance, with Gloria Xiong and Jessica Chen Weiss

Kaiser Kuo (0:09)

Welcome to the Sinica Podcast, the discussion of current affairs in China. In this program, we look at books, ideas, new research, intellectual currents, and cultural trends that can help us better understand what's happening in China's politics, foreign relations, economics, and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China. I'm Kaiser Kuo, coming to you this week from my home in Beijing. Listeners, please support my work by becoming a paid subscriber at sinicapodcast.com. Yes, there are a lot of sub-stacks out there, and yes, they do start to add up, but this is a very worthwhile subscription. In addition to Sinica, you get great content from wonderful partners of mine like Trivium and the China Global South Project. And of course, Jay Carter is wonderful this week in China's history. So please do subscribe so I can continue to bring you these conversations and lots more.

When Sinica started back in 2010, it was still possible for someone to participate meaningfully in the discourse on China, on the US-China relationship, equipped with not much more than a decent grasp of the contours of modern Chinese history, a sense of the geography, a familiarity with the major party leaders and their portfolios, a working knowledge of Chinese political thoughts and the current slogans, for good measure, a couple of good internet memes to add color and levity, the ability to scan a Sinhua readout and read a little bit between the lines, and maybe a bijou tolerance that would be sufficient to survive a provincial banquet with your dignity mostly intact. But man, things have changed. These days, to weigh in with any expectation that you'll be taking seriously, it feels like you have to know all of that and a great deal more. At a minimum, it seems like you have to have your arms around AI, the entire stack, semiconductors. You need to know what makes EUV lithography so damn hard, why it takes blasting molten droplets of tin with a laser like 50,000 times a second in order to make light of just the right wavelength. And you have to have mirrors polished so smoothly that if you scaled one up to the size of Germany, there would be no bump taller than a millimeter.

You need the energy system in China. You have to have lots of stats on the energy mix, on solar, of course, and wind, ultra-high voltage transmission, all these things at the ready. You need a grasp of trade flows, the difference between current account and capital account, why a bilateral trade deficit isn't necessarily the scorecard that people think it is. You need commodities, you need supply chain knowledge, you need military hardware knowledge, and of course, rare earths. This last one, rare earths has come to matter enormously. Over the past year and a half, they've turned out to be the Trump card as it were in Beijing's hand, the one that actually made Washington fold.

I'm mixing bridge and poker metaphors now, but after the Liberation Day tariffs in April of 2025, China put seven rare earths and the permanent magnets made from them under export licensing. Magnet exports to the world cratered and within a couple of months, the Trump administration was walking back its own restrictions to get the flow resumed. Then in October came the escalation that really got everyone's attention. China was responding to the entity list of the affiliate rule, the expansion of the list, asserting the right to license any product anywhere in the world, containing even a trace of Chinese rare earths or made with Chinese processing technology. That was of course followed up by the truce at Busan in Korea that suspended this for a year, a year that if you are counting is nearly up in November. For those who need the primer, the rare earths are 17 metallic elements, the 15 lanthanides, that double row that sits like an island off the south coast of the periodic table and like the periodic table's Hainan doll, plus their chemical cousins Scadium and Yttrium. The one thing people seem to know now, they didn't know then, but they actually do know that they are not rare, that what's actually rare is finding them in concentrations that are worth mining and then separating them from one another, which is really chemically very fiddly and environmentally really filthy.

They go into, again, the permanent magnets that spin, the motors and EVs and wind turbines and hard drives, the phosphors in your screen that you're looking at as you're reading this or listening to this, into catalysts, lasers, glass polishing, and into F-35s, into precision-guided munitions, into jet engines. It's a really small industry actually in terms of its sheer size, but with a mighty, mighty footprint. And China, as a lot of people now know, does roughly 85% of the world's processing of rare earth elements. Some of you will remember that I did a show on this topic back in February of 2021 with the geographer Julie Klinger, who's the author of Rare Earth Frontiers. It's still a very worthwhile book to read. Julie talked about how rare earths first broke into the broader public consciousness in the United States. On the back of a couple of things, once, I mean, of course, there was this incident between China and Japan in 2010, which we will get into a little bit in this conversation. And the movie of all things, Avatar, which as you will recall was a story about a galactic struggle to control a rare earth like substance called with James Cameron's, I'm sorry again, called with James Cameron. James Cameron, that's such a hard name to say. I'm going to see that whole sentence again.