Core Viewpoint - The global competition for rare earth elements is intensifying, with China facing challenges to maintain its technological dominance in the industry [1][10]. Group 1: China's Position and Actions - In July 2025, China's Ministry of Commerce launched a special operation against rare earth smuggling, marking the beginning of a reshuffle in the global rare earth industry [1]. - China holds a significant technological monopoly in rare earth refining, with 88% of global refining technology and 94% of high-end magnetic materials [7]. - The recent special operation aims to cut off the "curved blood transfusion" route used by the U.S. to import Chinese rare earths through third countries [9]. Group 2: U.S. Strategy and Challenges - The U.S. has imposed strict sanctions on Chinese rare earths while simultaneously relying on them for its military supply chain stability [5]. - Despite having domestic mines and partnerships with Australia, the U.S. still heavily depends on Chinese technology for refining [7]. - The U.S. Department of Defense invested $1.3 billion to support domestic rare earth companies, but the yield of trial products was below 20% due to various constraints [7]. Group 3: Global Competition and Future Outlook - Other countries, such as India and Australia, are also entering the rare earth competition, with India aiming for over 50% self-sufficiency in rare earth oxides within three years [9]. - Industry experts believe that merely increasing funding will not allow these countries to catch up with China's lead in rare earth refining in the short term [9]. - The ultimate competition will focus on mastering core technologies for high-performance rare earth materials, making simple export bans insignificant [9][10].