In early February 2026, the United States, the European Union, and Japan announced plans to deepen cooperation on critical raw materials supply chains, aiming to diversify and secure sources for strategic minerals essential to clean technologies, defense industries, and high-tech manufacturing. This initiative — including talks of a US-led trading bloc for critical minerals — has triggered strong opposition from China, which views it as a threat to its economic influence, strategic value, and role in global trade.
China’s resistance reflects complex economic, geopolitical, and systemic concerns, from fears of exclusion to worries about fragmentation of global markets and erosion of its competitive edge in mineral processing. Understanding why Beijing opposes such blocs requires exploring the interplay between strategic resources, global power competition, and China’s vision of the international trade order.
Global Race for Critical Minerals: Strategic Stakes Are High
Critical minerals — including rare earth elements, graphite, gallium, tungsten and others — are essential for modern technologies such as electric vehicles, renewable energy systems, semiconductors, advanced defense systems, and AI infrastructure. As governments accelerate electrification and digitalization, securing these mineral supply chains has become a top priority for strategic planners in Washington, Brussels, and Tokyo.
Historically, China has dominated the production and processing of these materials:
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China controls a large share of global rare earth mining.
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It accounts for upwards of 90% of refining capacity for many minerals needed in advanced manufacturing.
This position has given Beijing not only economic advantage but also strategic leverage — enabling it to influence prices and supply flows. In the past, China has even used export restrictions as a tool to assert geopolitical pressure, as seen in previous disputes with Japan over rare earth exports.
What Is the US-Led Initiative and Why China Sees It as a Threat
The proposed US-led approach involves creating a preferential trading framework or bloc among allied states to:
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Diversify sources of critical minerals outside China’s dominant network
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Set price floors and coordinated policies to stabilize markets
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Back joint mining, refining, processing, and recycling projects
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Share information, stockpile strategies, and boost investment
The logic behind this bloc, as outlined by US officials, is to reduce global dependence on one supplier (China) and build “resilient, diverse, and secure” supply chains for critical materials.
However, Chinese authorities have publicly criticized this effort by:
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Labeling such blocs as exclusive and discriminatory
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Arguing they threaten the open, inclusive, and rules-based international trading system
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Stressing that supply chains should remain stable and cooperative rather than segmented
Beijing’s objection is not simply rhetoric — it reflects a broader strategic discomfort with Western efforts to unite like-minded partners into formal or informal economic groupings that could marginalize China’s role.
Economic Threat: Undermining China’s Competitive Advantage
China built its dominance in critical minerals over decades through:
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Massive investment in mining, refining, and processing infrastructure
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Government subsidies and state-backed industrial policies
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Integration of resource supply with downstream manufacturing capacity
China’s control is not just in raw extraction but in the entire value chain, giving it pricing power and influence over technology sectors globally.
A US-centric mineral bloc could:
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Redirect investment toward allied projects in Africa, Latin America, Southeast Asia, or Oceania
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Reduce global demand for Chinese-controlled supply
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Encourage new mining ventures backed by collective buyers, thereby weakening China’s market share
Beijing sees this as a direct challenge to its industrial model and long-term economic interests. Its concern is that alliances of “trusted partners” could exclude Chinese firms and isolate China from key decision-making spaces in future supply networks.
Political Friction: Trade Order vs. Strategic Blocs
China’s critique often frames its opposition in terms of fairness and global trade order, emphasizing:
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A commitment to open, market-oriented trade
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Opposition to structures that could “undermine international economic and trade order”
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A belief that collective supply blocks may create trade fragmentation and geopolitical tension
From Beijing’s standpoint, such blocs could set a precedent for competing economic spheres that weaken the World Trade Organization (WTO) norms and promote exclusive standards over global cooperation.
However, Western governments counter that existing institutions have not adequately safeguarded against economic coercion or dependency risk, especially where one country holds outsized influence over critical sectors. The debate is thus as much about rules and norms as it is about mineral supply.
China’s Alternative Play: Cooperative Claims and Outreach
While criticizing Western blocs, China also promotes its own vision of cooperation:
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Advocating dialogue to ensure stable global supply chains
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Calling on all countries to work together under shared rules
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Opposing tactics that could exclude or marginalize developing economies
This approach resonates with China’s broader foreign policy narrative that emphasizes multilateralism, inclusiveness, and infrastructure cooperation, especially in the Global South. Beijing seeks to position itself as a partner to resource-rich developing nations rather than a competitor locked out by Western alliances.
Chinese industry and government initiatives have also proposed cooperation mechanisms involving countries in Africa, Southeast Asia, and Latin America to collectively stabilize mineral supply — suggesting Beijing is trying to counter Western groupings with alternative networks.
Global Implications: More Than US–China Tension
China’s opposition to a US-led critical minerals bloc has wider consequences for:
International Trade Norms
The clash highlights tensions between universal, WTO-style trade rules and selective economic alliances focused on national security. How this evolves could reshape global governance frameworks.
Developing Countries’ Choices
Countries rich in raw materials (e.g., in Africa, Latin America, or Southeast Asia) may face pressure to align with either Western or Chinese-led supply networks, affecting their economic sovereignty and negotiation leverage.
Technology and Defense
Critical minerals are not just economic inputs — they are strategic resources underpinning defense technology, AI, renewable energy, and battery systems. Control over these supply chains translates into geopolitical influence.
Industrial Competition
Allied diversification efforts may spur increased productivity, innovation, and investment in mining and processing outside of China, potentially reducing global dependency over time — but also introducing risks of overcapacity or market instability.
China’s Opposition Is Strategic, Not Just Economic
China’s resistance to the US-led critical minerals bloc stems from deep economic interests, strategic rivalry, and competing visions of global trade governance. While on the surface it may appear as rhetoric against exclusive groupings, at its core it reflects concern about:
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Losing a dominant economic position in a rapidly growing global sector
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Being sidelined from emerging supply chain governance structures
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The broader geopolitical implications of competing trade alliances
As global demand for critical minerals intensifies, this confrontation is likely to remain a central theme in US–China competition, influencing how countries approach resource security, industrial policy, and international cooperation in the years ahead.
