Geopolitical risk and the global supply of rare earth permanent magnets: Insights from China’s export trends
研究利用2017-2024年中国出口数据，发现地缘政治风险对中国稀土永磁体出口有显著正向影响，尤其美国与澳大利亚的风险上升会促进出口，对能源转型供应链安全有重要启示。
The energy transition is highly mineral-intensive, leading to substantial dependencies on a select group of producing countries, which may, in turn, spark new geopolitical tensions. Prominent among these critical minerals are rare earth elements (REEs), with China being the predominant producer. REEs serve as indispensable components in cutting-edge low-carbon technologies, particularly in the realm of offshore wind turbines and electric vehicles, through their crucial role in rare earth permanent magnets (REPM). This paper delves deep into the ramifications of geopolitical risk on the export of rare earth permanent magnets from China, the world’s leading supplier. Utilizing multiple linear regression on Chinese national export figures spanning from 2017 to 2024, the study uncovers that geopolitical risk exerts a markedly positive influence on the supply of rare earth permanent magnets. The results highlight that elevated geopolitical risks in the United States and Australia — China’s primary competitors in the upstream rare earth industry — positively influence REPM exports. Furthermore, the insights reveal that escalating geopolitical risks might significantly shape China’s strategic export volumes. • REPMs are key components of offshore wind turbines and EVs • Geographic concentration of the value chain presents a supply risk. • There is a positive correlation between geopolitical risk and REPM exports from China. • Global geopolitical risk might shape the Chinese strategy on the REPM market.