China in the global supply chains of rare-earth metals

Abstract

Importance: the paper examines the emergence of a new technological dependence of the European Union on China in the rare earth metals sector against the backdrop of the global energy transition. Purpose: to identify the qualitative features of the Chinese dominance model and conduct a comparative analysis with the EU's previous gas dependence on Russia to determine the nature of its current vulnerability. Research design: using data from the European Court of Auditors, Eurostat, and expert assessments for the period 2021–2026, the author, for the first time in the academic literature, systematically compares the two dependence models across four parameters: supply concentration, control structure, substitution potential, and the time horizon for creating alternatives. Results: it is shown that, unlike gas dependence, which was primarily transactional and geographical in nature, China's dominance in the rare earth metals sector is based on complete sovereign control of process chains and patent barriers. It is established that the substitution time horizon for rare earth metals (7–9 years) critically exceeds that for gas (1.5–2 years), creating a qualitatively new type of dependence. The significance of the study lies in its expansion of theoretical understanding of the nature of structural power in the global economy and the empirical addition of data on EU-China relations during the critical period of energy transition.