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Asian AngleSoutheast Asia faces a false binary in US-China mineral trade
The real question for rare earth exporters is how to turn global mineral competition into higher-value industries
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Critical minerals have become a recurring source of friction in international diplomacy, with China’s dominance in the sector and US efforts to build alternative supply chains raising concerns that Southeast Asian countries may be forced to choose between the two powers.
But this is a false choice. As important exporters of rare earth elements, Southeast Asian countries have leverage of their own and can use intensifying competition to diversify partnerships and capture more of the value chain at home.
The recent meeting of G20 finance ministers and central bank governors in the United States ended with a chairman’s declaration rather than a joint statement, underscoring the lack of unanimity. China objected to, among other things, calls to eliminate “non‑market policies” and ensure smooth global supply chains for vital goods, including critical minerals.
The disagreement comes amid China’s tightening controls over rare earth elements (REEs), first introduced in April 2025 in retaliation for US tariffs and export controls. In October it went further, extending licensing requirements to certain foreign-made products containing at least 0.1 per cent Chinese-origin controlled REEs or using specified Chinese rare earth technologies. These measures were subsequently suspended until November this year, while the April 2025 controls remain.
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