In the rare earths conflict, a European nation is prepared to cede its economic future to China in order to secure the supply.
For years, the warnings were clear: China not only wanted control over rare earths, but also over the global industrial knowledge checkpoints. Today, those forecasts have materialized. Chinese authorities now demand foreign companies – which depend on rare earths – to fill out forms with an unprecedented level of detail: product photographs, assembly diagrams, customer lists, production volumes, and three-year sales forecasts.
A One-Way Relationship
Affected companies accept the conditions without objection for a simple reason: compliance with the new rules is necessary to continue production. Additionally, Chinese export licenses must be renewed every six months, transforming material dependence into periodic obedience.
A Country Caught Between Industry and Politics
The most paradigmatic case is that of Germany, a technological powerhouse and one of the most exposed. Its export model – based on machinery, automotive, and green energy – relies heavily on minerals and components that only China can supply. This dependence has led to a paradoxical situation: Beijing knows the German industrial anatomy better than Berlin itself. While Chinese authorities collect exhaustive data through import forms, the German government fails to obtain the same information from its own companies. Official questionnaires remain unanswered, and any attempt to impose transparency clashes with the political promise to reduce bureaucracy.
From Cooperation to Veiled Blackmail
The result is an informational and strategic asymmetry. Armed with production data and interdependencies, China can apply “surgical” coercion: it does not need to cut off supplies, only to slow down licenses or condition renewals to pressure specific sectors. This situation resembles what some analysts call the Second China Shock. China’s overcapacity in electric vehicles, batteries, and solar panels is pushing prices down, eroding the margins of the German industry and forcing cuts and relocations. Now, in addition to facing unfair competition, Germany experiences the other side of the problem: depending on minerals controlled by the same country that is taking market share away from them.
A Mortgaged Future
European think tanks agree: the country that once led the continental export model is now caught in a perfect trap. On one hand, Chinese products flood international markets; on the other, essential materials to manufacture their own products are monopolized by the same supplier. Controlling rare earths not only means having the tap, but also the map of the pipelines and valves. And as China conditions each license renewal on a new data delivery, Europe – and especially Germany – pays time and time again for the privilege of continuing to depend on its rival. The lesson is clear: delaying diversification does not reduce risk, it only shifts it to the future. And that future, increasingly, seems to be written in Mandarin.
