Beijing is playing a long game. Its control over critical minerals is not just about supply chains. It is about reshaping global power.

When Chinese President Xi Jinping met with US Treasury Secretary Janet Yellen last year, the conversation rarely strayed from rare earths. Behind closed doors, Chinese officials made clear that access to their mineral processing facilities would remain conditional. The message was unmistakable: the US needs China more than China needs the US.

China dominates the refining of rare earth elements. It processes over 90% of the world's supply. It also holds a commanding position in lithium, cobalt, and graphite. These are the backbone of electric vehicles, wind turbines, and military hardware.

Washington is waking up to this reality. The Pentagon has flagged rare earths as a national security risk. The US Geological Survey calls them "critical minerals" essential for modern defence. Yet America has not mined a single rare earth element since the 1990s. The only functioning mine, Mountain Pass in California, is majority-owned by a Chinese company.

Beijing does not shy away from using this leverage. In 2010, China cut rare earth exports to Japan following a diplomatic spat. Prices spiked and Tokyo scrambled. The lesson was not lost on other capitals.

Now, the US is pushing back. The Inflation Reduction Act offers subsidies for domestic mineral processing. The Pentagon has signed contracts with Australian and Canadian firms. But building new refineries takes years. And environmental regulations slow things down.

China's advantage is not just geological. It is strategic. Beijing has spent decades securing mining rights in Africa, Latin America, and Southeast Asia. Its Belt and Road Initiative funnelled billions into mines in the Democratic Republic of Congo, Chile, and Indonesia. In return, these countries often grant China exclusive access to raw materials.

The US has few options. It could try to forge a coalition of allies to counter China's grip. But the European Union and Japan also rely heavily on Chinese processing. Even Australia, which has its own rare earth deposits, sends most of its ore to China for refining.

Some analysts argue that China's dominance is overstated. They point to new discoveries in the US, Canada, and Greenland. But discovery is not production. And production without processing is useless.

Beijing knows this. Its Ministry of Industry and Information Technology has warned that rare earths are a "strategic resource" that should not be squandered. In 2023, China banned the export of rare earth extraction and separation technologies. That move is designed to keep competitors dependent.

The US is trying to break free. The Pentagon has funded Lynas Rare Earths to build a processing plant in Texas. But the plant is not yet operational. And China's state-owned enterprises have already locked in long-term contracts with major clients.

There is also the question of recycling. The US leads in rare earth recycling technology but the volume is tiny. It cannot replace primary supply anytime soon.

Beijing's strategy is not just about minerals. It is about aligning resource wealth with foreign policy. Chinese diplomats have used mineral deals to secure diplomatic recognition for the Belt and Road. They have used them to sway votes at the United Nations. And they have used them to build alliances with resource-rich countries that are wary of Western dominance.

The next flashpoint could be the deep sea. The International Seabed Authority is drafting rules for mining the ocean floor. Chinese companies have already staked claims in the Pacific. They are ready to start extraction. The US has not signed the UN Convention on the Law of the Sea, limiting its ability to block them.

For now, the balance of power remains tilted. The US is playing catch-up. And Beijing is content to watch.