China leads rare earth supply but trails US, Japan in core patents

A new study says China dominates rare earth supply but trails the US and Japan in core patents for advanced materials. The finding undercuts Beijing's strategic edge and highlights the higher-value technology gap.

In Short

• Chinese export curbs on rare earths have disrupted supply chains abroad
• Advanced rare earth materials power missiles, smartphones, satellites and electric vehicles
• Downstream products account for over 80 per cent of global patents

A study has found that while China dominates the global rare earth supply chain, it remains behind the United States and Japan in many core patents for advanced rare earth functional material technologies. The study, reported by the Hong Kong-based South China Morning Post, said China was “not in a leading position in mastering key core technologies in certain fields” despite its strong position in mining and processing.

China accounts for about 70 per cent of global rare earth mining and nearly 90 per cent of processing capacity, making it the leading player in the sector. This has long been seen as a strategic advantage for Beijing in its trade and strategic competition with the US, even as tighter Chinese export controls on several rare earth products in recent years have disrupted supply chains in India, Japan and Europe.

Rare earth materials are critical for defence equipment such as fighter jets, missiles, radar and sonar systems, as well as automobiles, smartphones, satellites and other modern equipment. According to the report, the researchers focused on advanced rare earth functional material technologies rather than China’s resource reserves or production capacity, and found that the key patents behind these materials were still largely controlled by Japan and the US.

The report said downstream products made from processed rare earths, including permanent magnets, catalysts, luminescent materials and polishing materials, account for more than 80 per cent of rare earth-related patents worldwide and are the industry’s most commercially important applications. Japan retained an overall technological lead in permanent magnets, while the US led in most core technologies linked to catalytic materials, luminescent materials and polishing materials.

The study found that China held an advantage in only a limited number of technologies in these sectors and continued to lag Japan and the US in several key manufacturing processes and material systems. The researchers said China’s strength in supplying rare earth raw materials had not translated into similar leadership in the higher-value technologies built on them.

According to the report, the study said the gap was partly linked to China’s innovation system. It noted that although the country files a large number of rare earth patents, only a relatively small share are high-value international patents with broad commercial influence. It also found that many scientific advances had yet to turn into commercially significant patent portfolios and pointed to weak coordination among universities, industry and intellectual property management. The researchers called for greater focus on areas where China faces technological gaps, dedicated research programmes and stronger collaboration between industry and academia to improve its position in high-value rare earth technologies.

In sum, the study said China remains dominant in rare earth supply and processing, but the more valuable and commercially important technology base in the sector is still largely led by Japan and the US.

With PTI Inputs

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