Can the US and allies loosen China's chokehold on rare earths?

Uh, Hayley, thank you very much for that great introduction, and a warm welcome to everyone who's viewing this online.

And so to begin with that kind of question of the importance of rare earths, so the, the issue is, uh, at a specific level, it's a central question of economic security.

You've outlined the importance of these inputs and the supply chain that produces a rare earth permanent magnet.

Now, the proximate cause of the report today is the 2025 export controls, which disrupted global advanced manufacturing, and particularly-

Uh, this is Chi- China's export controls

...

China's export controls on rare earths, yeah.

Um, and so this disrupted advanced manufacturing, particularly the defense sector, but also there was broad spillover effects.

China was willing to, in targeting the United States, primarily actually impact everyone's supply chains, right? So this kind of indicated at one level China's sense of its own, um, geopolitical power that it was willing to have these broad spillover effects.

And there's a bigger picture here, right? This is about systemic competition.

Right.

China has a state-led model, right? It applies state power to developing industrial capacity, to subsidizing it, to, to, uh, accepting loss, uh, making in sectors for long periods of time to ensure it captures that industry, and we're facing that from advanced economies which are market-led, right? And so in a market-led economy, you need your private firms to do the heavy lift-lifting to address economic security gaps at times, but they need to, uh, secure profit, right? And if they cannot get profit, they're not going to invest.

We've seen this in, in the rare earth sector.

There's very difficult to get private capital to invest because the risks are too high.

They know they're facing the deep pockets of the Chinese, uh, state, and also a Chinese state that's strategically involved in these sectors.

So I think this rare earth, uh, se- case study is a case study that has much bigger ramifications-

Mm

... for how we understand the competition between the US and China at the moment.

And, and ultimately it's not just between those two countries.

Everyone else has a stake in this, whether at the economic level, at the geostrategic level, right? So I think there's a lot of lessons we're gonna learn here in we- in, in, in regard as to whether can market-led economies compete in a new economic security order.

So that's the kind of big picture, uh-

Yeah, fantastic, 'cause, I mean, there are a lot of reports out and a lot of people talking about this issue now, but it is really good just to hear from your perspective what was in recent history that's triggered the need for this report at this time.

So look, I do want you to go through your report basically to give people who are watching a sense of what, what you found in your research, but also what I really appreciated, um, was the clarity of the recommendations that you provided because often there is a lot of detailed research on the technical aspects of what rare earths are, what they go into, how they w- need to be processed, you know, where the choke points are, but too infrequently there are not a lot of so what's for people about what next.

Mm.

Um, or the what next is very broad and not specific enough, but your recommendations are very clear and specific.