Everyone can stop worrying now. China's grip over the world's supply of rare-earth metals has weakened considerably — and the country can't hold the global economy hostage, as was once widely feared. Or at least so argues a new paper on the topic.
Back in 2010, China produced 97 percent of the world's rare earth metals, which are used in everything from the magnets in our headphones and wind turbines to the catalysts in our gasoline refineries. That same year, China began restricting exports as part of a political dispute with Japan. The global price for rare earths skyrocketed, and there was a fair bit of alarm in the US about how China's chokehold on rare earths threatened the economy and even national security.
But the panic turned out to be overblown. In a new working paper from the Council on Foreign Relations, former Pentagon advisor Eugene Gholz explains that the much-feared crisis never actually came to pass. Not long after China restricted exports, other countries quickly began producing their own rare earths — or finding ways to reduce their reliance on the metals. As a result, China's control of the market is much diminished today.
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