China's rise in the critical commodities market: industrial strategies and geopolitical levers

"Critical" commodities are a subset of commodities characterized by high strategic importance and significant supply risks. These include, in addition to rare earths, numerous metals essential for strategic sectors such as defense, the green transition, and the development of digital technologies. The global supply of these commodities depends entirely on a very small number of exporting countries, so the disruption of supplies from even one of them can compromise the global market and cause supply crises.
The acceleration of digitalization, the transition to renewable energy sources, and the modernization of military systems have drastically increased the demand for critical commodities, turning access to these resources from an industrial necessity into a national security emergency. A real race to secure these commodities has therefore begun, aimed at guaranteeing control over fundamental and limited strategic resources.

In this context, China is emerging as the global leader in the production and refining of most critical commodities. The country controls around 80% of global tungsten production and 99% of refined gallium, dominates a large part of the international rare earths market, and holds leading positions in other highly critical commodities, including cobalt, antimony, graphite, lithium, and vanadium. According to analysts at The Economist, this dominance allows China to exert significant influence over global supply chains, affecting prices, availability, and even the industrial policies of other countries.

In this article, we present a summary of The Economist's position, reported in the briefing America’s new era of state-sponsored mining in the weekly edition Digging for Victory, on how China has become the new leader in the critical commodities market and how it is leveraging this position to exert geopolitical pressure, taking the recent trade war with the United States as an example.

China's Strategies for Controlling Critical Commodities

According to The Economist analysts, China’s dominance in the critical commodities market is not the result of a natural advantage, but the outcome of an industrial strategy pursued for over four decades. The Chinese government has supported the growth of the mining sector through strong state intervention, providing public funding and low-interest loans to mining companies and national refineries. This support has allowed for the rapid development of production capacity and refining infrastructure, enabling Chinese companies to operate at lower costs than international competitors across the entire value chain. Additionally, especially in the early stages of the sector’s development, a less stringent environmental and safety regulatory framework compared to Western countries further reduced production costs.

At the same time, China has leveraged its market leadership by occasionally resorting to dumping practices, flooding the market with large quantities of commodities at prices below production costs, making several Western mining projects economically unsustainable. This has led to the weakening of foreign mining companies, creating new opportunities for the acquisition of distressed foreign mines by Chinese firms, further consolidating Beijing’s control over global supply chains of critical commodities.

Critical Commodities as a Tool of Trade Pressure

China’s leadership over critical commodities can be used by the Chinese government as a lever for trade pressure, as demonstrated during the latest cycle of tensions between the United States and China. During the trade war initiated under the current Trump administration, the Chinese government imposed export restrictions on several critical metals to exert negotiating pressure on Washington and secure more favorable terms in the revision of trade tariffs.
To further consolidate its control over these resources and strengthen its negotiating leverage, Beijing has required export licenses for certain critical commodities purchased from China, conditioning access to international markets on the sharing of sensitive industrial data related to derivative products using Chinese-origin critical metals. The licenses require detailed information on production processes, quantities used, and facilities employed, creating a mechanism through which China can monitor the use of critical commodities abroad.

Analysis of Effects on International Prices

The export block of critical commodities linked to new Chinese trade policies has led to rapid and significant increases in international prices, putting Western production in strategic sectors such as technology, aerospace, automotive, and defense under pressure. A clear example of this dynamic is the surge in international antimony and tungsten prices in 2025, analyzed in the article: "Tungsten, antimony, and silver: what do they have in common?".
The following charts show the historical customs price trends of tungsten and antimony oxides, expressed in euros per ton.

Historical Customs Price Series of Tungsten Oxides

Historical Customs Price Series of Antimony Oxides

The analysis of tungsten and antimony prices clearly shows how China can exert a direct and rapid influence on the global market for these commodities. Export restrictions introduced by the Chinese government have caused significant increases in international prices within just a few months. This phenomenon demonstrates not only China’s ability to modulate global supply, but also the vulnerability of Western supply chains to such interventions.

The sharp correction in U.S. antimony prices in December 2025, which returned values to the FOB levels of Chinese exports, is also attributable to China’s trade policy. The government temporarily suspended export bans to the United States for certain critical materials, including antimony, as part of agreements reached with the Trump administration to reduce trade tensions. The measure will remain in effect until November 2026.

Conclusions

Over the years, China has managed to consolidate an almost uncontested leadership position in the critical commodities market. This dominance does not stem from natural advantages but from a decades-long industrial strategy combining state funding for production and refining, more permissive environmental and safety regulations, dumping practices on international markets, and acquisition of distressed foreign mines.
According to The Economist, China is transforming its leadership in critical commodities into a true geopolitical tool, imposing export restrictions and requiring licenses that bind Western companies to share sensitive industrial data. The effectiveness of these policies became evident during the latest trade war with the United States, when restrictions on critical commodity supplies, such as tungsten and antimony, more than doubled international prices, putting strategic sectors like electronics, aerospace, automotive, and defense under pressure. It is therefore essential for Western economies to adopt new strategies that reduce their dependency on Chinese critical commodity supplies.