ZGXT(SZ:000831) Sou Hu Cai Jing·2026-02-16 01:18Core Viewpoint - The joint efforts of seven countries to reduce reliance on Chinese rare earth imports are seen as a political show rather than a viable strategy to disrupt China's dominance in the rare earth sector [1][26]. Group 1: Reasons for the Coalition - The urgency of the coalition stems from the anxiety of these countries, particularly after China's export restrictions led to supply shortages impacting critical industries like semiconductors and automotive manufacturing [3][5]. - The European Union relies on China for 98% of its critical rare earth needs, while the U.S. is dependent on China for 80%, highlighting a significant dilemma for these nations [3][5]. Group 2: Limitations of the Coalition's Strategy - The coalition's strategy to involve countries like Australia and India to restructure the global rare earth supply chain is fundamentally flawed, as these nations face significant challenges in scaling up production and processing capabilities [7][10]. - Australia's rare earth reserves are substantial, but its production costs are over 30% higher than China's, making it difficult to fully replace Chinese supplies [10][12]. - India's rare earth extraction technology is outdated, relying heavily on manual labor, which results in inefficiencies and high waste [12][14]. Group 3: China's Competitive Advantages - China holds 70% of the world's rare earth resources and dominates 90% of the processing capacity, making it nearly impossible for other countries to compete without significant investment and time [18][20]. - The complex processing required to convert rare earth ores into usable industrial materials is a core technology that China has monopolized, further solidifying its position in the market [20][22]. - Establishing an independent rare earth supply chain in other countries could take 8 to 12 years and require investments of hundreds of billions, with no guarantee of success [22][28]. Group 4: Historical Context and Future Outlook - Historical precedents show that previous attempts to limit China's rare earth exports led to price surges and forced countries back to the negotiation table [26][30]. - The global economic integration means that supply chains cannot be easily replaced, and China's decades of investment in the rare earth sector have created a robust competitive edge that is unlikely to be undermined by the coalition's efforts [28][30].