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Why China's rare earth supremacy damages the global economy

02:35

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July 7, 2025

China has threatened to limit exports of rare earth. This would be a major blow to businesses around the world. Makers of cars, wind turbines, robotics and machinery depend equally on the elements. With supply chains interrupted, production of many goods could come to a standstill.

Germany's high-security facility currently holds around €35 million worth of Chinese rare earths, essential for electronic machinery and electric car engine magnets. Since April, China's tighter export restrictions have halted shipments, triggering urgent stockpiling and supply-chain alarms.

Manufacturers face potential production stoppages as two-month magnet reserves dwindle and customers resist disclosing proprietary processes to obtain civil-use export licenses. In the long term, Western countries must invest in rare earth mining and processing to reduce reliance on cheaper Chinese imports.

This video summary was created using AI from the original DW script. A journalist edited the summary before publication.

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