China’s Rare Earth Gamble Backfires, Warns Scott Bessent
In a statement reverberating across global markets, veteran investor Scott Bessent criticized China’s decision to tighten rare earth mineral exports, calling it a strategic miscalculation. The founder of Key Square Group and ex-George Soros CIO argued that China’s move could hasten efforts by the U.S. and allies to break Beijing’s dominance in critical minerals.
Why Rare Earths Matter
Rare earth elements (REEs)—17 minerals essential for EVs, smartphones, and defense tech—are the backbone of modern technology. China controls 80% of global supply, wielding this dominance as both an economic and geopolitical tool.
But Bessent warns China’s latest restrictions may backfire:
“China made a real mistake by firing shots on rare earths. This is a wake-up call for the world to diversify supply chains.”
A History of Rare Earth Weaponization
This isn’t China’s first rare earth power play. In 2010, during tensions with Japan, Beijing slashed exports, shocking global markets. While alternatives were explored, China retained control.
Now, in 2024, fresh export curbs—amid U.S.-China trade wars and Europe’s green energy push—have reignited supply chain fears.
Global Pushback Gains Momentum
Bessent’s warning aligns with Western actions:
– U.S. revives domestic mining (e.g., MP Materials’ California mine).
– EU invests billions to cut reliance on Chinese minerals.
– Australia, India, Africa courted as alternative suppliers.
“The more China plays hardball, the faster the West unites to break its monopoly,” Bessent noted.
Economic and Geopolitical Risks for China
While China gains short-term leverage, long-term consequences loom:
– Price volatility disrupts tech/defense sectors.
– Companies like Tesla seek rare earth-free tech.
– Defense contractors stockpile reserves.
What’s Next in the Rare Earth War?
Bessent’s comments highlight a turning point:
– Decoupling risk: Western supply chains may accelerate away from China.
– Opportunity: Rival producers could fill the gap.
“China may have overplayed its hand. The world is now wide awake—and that’s bad news for Beijing.”
Follow NextMinuteNews for updates on this escalating economic battle.
