(Dan Tri) – China established a rare earth corporation described as large as an `aircraft carrier`, to help Beijing maintain dominance with important materials as competition with the US heats up.
China is still the dominant country in the global rare earth market, but its market share has been decreasing in recent years (Photo: AP).
Nikkei reported that China on December 23 announced the merger of three rare earth mining companies into one group to control the majority of domestic rare earth production.
China Rare Earth Group (CREG) was established from three units specializing in rare earth exploitation under China Aluminum Group, China Minmetals and Ganzhou Rare Earth Group.
Immediately before that, two other `big players` in the Chinese rare earth industry, China Northern Rare Earth and China Rare Earth Holdings, also announced strategic cooperation.
According to Nikkei, China is currently tightening control over its rare earth supply chain to prepare for prolonged tensions with the US.
CREG will become one of 100 central companies directly supervised by the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council.
Chinese media compares this merger to the scale of an `aircraft carrier` as it will account for nearly 40% of China’s overall rare earth production, and 70% of China’s medium and heavy rare earth production quota.
According to US statistics, China currently accounts for 60% of global rare earth production.
Analysts said that China’s move could help the country cope with future external challenges, including trade tensions with the US.
Experts believe that consolidation will help China maintain global competitiveness and become China’s `card` in the conflict with the US.
Rare earth is one of the materials for which China dominates the market, in sharp contrast to the country’s heavy reliance on oil imports from the Middle East and iron ore from Australia.
`Given global geopolitical tensions and increased competition for resources, such a move would strengthen domestic control,` analyst Yan Yulu commented on China’s decision.
Internationally, China’s dominance of the rare earths market has weakened over the past few years.
Some hard-line figures in China have called on Beijing to `weaponize` rare earths after the trade war with the US broke out in 2018. However, experts also warn that China should
Currently, the US is promoting the supply chain of important materials with global allies and partners to reduce dependence on China, including rare earth products.