ZGXT(SZ:000831) Sou Hu Cai Jing·2025-10-22 04:38Core Viewpoint - The article discusses the challenges faced by the G7 and its allies in countering China's dominance in the rare earth market, highlighting the limitations of political alliances against market realities [3][10]. Group 1: G7's Response to China's Rare Earth Regulations - Following China's new rare earth export regulations, the U.S. led a coalition of G7, EU, India, and Australia to discuss joint measures [3]. - The G7's plan includes setting a price floor for rare earths to stimulate domestic mining, which contradicts basic resource trade logic [5]. - The U.S. claims that it will communicate with other "democratic countries" in Asia, but historical attempts at similar alliances have failed to resolve resource challenges [3][10]. Group 2: Structural Advantages of China - China controls 92% of the processing capacity for rare earths, giving it a structural advantage in price setting [5]. - The timeline for developing domestic rare earth mines in the U.S. is approximately 29 years, making it impractical to meet current demands [5]. - G7's goal to achieve 50% self-sufficiency in critical minerals by 2030 is unrealistic given the current 60% shortfall faced by European automakers [5]. Group 3: Global Economic Shifts - Major mining CEOs in the West acknowledge that China's technological and pricing advantages in rare earths are irreplaceable [7]. - There is a noticeable shift in global trade practices, with countries like India and Chile increasing their use of the Chinese yuan for resource transactions, indicating a weakening of the dollar's dominance [7]. - Companies like Tesla and BMW continue to invest in China, while Apple’s CEO has committed to expanding investments in the Chinese market despite U.S. pressures [7]. Group 4: Implications for G7 Allies - G7 allies face a dilemma: aligning with U.S. pressure on China could jeopardize their own industries reliant on rare earths, risking cost disadvantages and potential relocation [9]. - The article suggests that G7 countries must make rational decisions in light of their dependencies on rare earths [9]. Group 5: Conclusion on Market Dynamics - The G7's collective response to China's rare earth regulations reflects a Cold War mentality that fails to address market realities [10]. - Historical evidence shows that alliances without shared interests are likely to disintegrate, and interventions that contradict market principles are destined to fail [10]. - The core of the rare earth competition lies in who controls the entire supply chain and market influence, rather than political alignments [10].