Critical minerals are becoming a key battleground in the growing economic rivalry between the G7 and China, as governments seek to secure supplies vital to the energy transition and advanced manufacturing.
Critical minerals are central to modern industrial systems and the global energy transition, powering technologies ranging from electric vehicles and wind turbines to semiconductors and defence equipment. As demand rises, control over supply chains is increasingly shaping geopolitical competition among major economies.
At the heart of the issue is not only access to raw materials, but also dominance in processing and refining, where China maintains a leading global position.
At a summit in France, Group of Seven leaders stressed the need to build more resilient and diversified supply chains for critical minerals. Their joint statement outlined plans to align strategic stockpiles, expand joint procurement and develop a new coordination platform supported by the International Energy Agency.
The initiative focuses on rare earth elements and permanent magnets, which are essential components in electric vehicles, renewable energy infrastructure, electronics and advanced defence systems.
Without naming China directly, the G7 said it aims to reduce dependence on any single external supplier for these materials to below 60% by 2030, with a longer-term goal of around 50% "as soon as possible".
China responded by urging the G7 to respect international trade rules and avoid what it described as forming exclusive "small circles" that could fragment the global economic order.
Chinese Foreign Ministry spokesperson Lin Jian said Beijing's position on maintaining stable and secure global industrial and supply chains "remains unchanged".
He added that China's export control policies are consistent with international practices and are intended to support global security, stability and non-proliferation obligations.
Industry data highlights why the issue is politically sensitive. China accounts for nearly 70% of global rare earth production and around 95% of permanent magnet manufacturing, giving it a dominant position in key segments of the supply chain.
This concentration makes diversification efforts by Western economies structurally difficult in the short term, particularly in downstream manufacturing sectors that depend on stable supplies.
The dispute over critical minerals has intensified following a series of Chinese export restrictions on key materials used in energy-transition technologies. The measures, introduced last year in response to U.S. tariffs, temporarily disrupted global supply chains and industrial production across several sectors.
China has also signalled that additional controls could be reintroduced following a temporary trade truce, keeping uncertainty high across global markets.
A United Nations report shows that China has introduced 16 separate restrictions on critical minerals and energy-transition materials since 2020, reflecting a broader trend of tightening regulation amid escalating trade tensions.
These measures have become part of a wider pattern in which resource policy is increasingly being used as a tool of economic statecraft.
As global demand continues to grow, governments are balancing supply security against dependence on China's entrenched role in processing and refining.
The result is an expanding strategic contest. The G7 is seeking to reshape supply chains through greater coordination and diversification, while China is defending its regulatory approach and rejecting what it sees as bloc-based economic fragmentation.
The outcome of this rivalry is likely to influence not only industrial policy, but also the pace and cost of the global energy transition.
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