China: Warning, now the world is in the hands of China, not America – can shut down the world’s business anytime!
China: If the auto industry wants to avoid such shocks in the future, it will now have to work quickly towards supply chain diversification and mineral innovation.
The foundation of car companies around the world is now so dependent on China’s “rare earth materials” that even a small disruption can shake the global auto industry. And in April 2025, China did exactly that — by banning the export of heavy rare earth elements. CNBC International has reported this issue in detail. Let us explain.
Why It Matters: Cars Can’t Be Built Without Rare Earths
Rare earth materials are used in:
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Batteries
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Electric motors
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Seat belts
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Steering systems
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Vehicle electronics
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Pollution control systems
The whole story of this crisis – understand it like this:
1. What are rare earth elements?
These are 17 special chemical elements used in fighter jets, mobile phones, sports equipment, and cars. They are especially important in electric vehicles.
China’s control
About 70% of the world’s rare earth mines are in China, but the real power lies in its 90% control over processing — especially, China has a complete monopoly on the processing of heavy rare earths.
The blow came on April 4
Without any prior notice, China banned the export of heavy rare earth elements — which created chaos in the auto industry.
It is impossible to make a car without rare earths
These elements are used in batteries, motors, seat belts, steering systems, electrical systems, and pollution control — meaning, a car cannot be made without them.
Car companies’ factories closed
Many auto factories in Europe had to shut down. Ford had to stop production of its Explorer SUV.
US-China deal was made, but uncertainty remains
Although a deal was made between the US and China that gave some suppliers exemptions, it is uncertain how long it will last.
China has done the same thing before
Experts say that since 2023, China has gradually been increasing restrictions on metals and minerals. Rare earths are just the latest step.
But the world has…
Some solutions like recycling, finding new mining sites, and technological innovation — but these will show results only in the long run.
Why only rare earth?
Actually, these are not “rare,” but separating and purifying them from rocks is very difficult and expensive — and China has an edge in this.
Something else may be banned tomorrow
Experts warn — “Today it’s rare earths, tomorrow it could be something else — something that may not seem valuable today, but could become essential in the future.”
Overall — the rare earth crisis has shown the world how deeply it depends on China. If the auto industry wants to avoid such shocks in the future, it must act quickly to diversify its supply chain and invest in mineral innovation.