Tracing China’s unseen rare earth exports that sustain global consumption

Summary: Rare earth (RE) materials are critical to modern technologies, yet current research has largely overlooked the indirect exports of RE embedded in intermediate and final products. Leveraging the detailed inventories of China’s RE flows and downstream usage constructed herein, this study addresses that gap by systematically tracing and decomposing China’s indirect RE exports from 1990 to 2020 through the integration of environmentally extended multi-regional input-output (EEMRIO) analysis along with global value chain (GVC) and structural path analysis (SPA) methods. We find that over one-third of China’s RE exports were indirectly embedded in traded goods with other regions during this period. This substantial outflow of embedded REs underscores China’s important—yet often underrecognized—role in sustaining the global RE supply chain. These findings further reveal the complexity of RE trade and emphasize the need for comprehensive tracking of metal flows. Science for society: While China’s direct exports of concentrated rare earth (RE) materials have been widely recognized, this study shows that a substantial share of RE is also delivered indirectly through global supply chains. By constructing detailed inventories of China’s RE flows and downstream uses, we trace and decompose these indirect exports from 1990 to 2020, revealing China’s critical yet often overlooked role in sustaining international RE supply. The results reveal that over 60% of RE resources extracted in China were exported to other regions during this period, of which approximately 62% were direct exports and 38% were embedded indirectly in traded goods. The overall trade structure has shifted from direct to indirect exports, highlighting the growing role of indirect RE flows. The United States (US), Japan, and Europe emerged as the three main destinations of China’s RE exports. By 2020, indirect RE trade accounted for 60% of China’s total RE exports to the US, 30% to Japan, and 68% to Europe, respectively. Since 2000, permanent magnet materials and several emerging downstream applications (e.g., renewable energy and electric vehicles) have become the primary sources of indirect RE exports from China. We then identify diverse indirect export pathways that play a significant role in sustaining global RE supply. Meanwhile, a structural paradox has long existed: RE materials are indispensable for clean energy technologies, but their production is highly polluting. Our analysis further shows that the domestic carbon emissions linked to indirect RE exports are 2 to 7 times higher than those of direct exports. These findings underscore the importance of international cooperation—both to leverage indirect RE exports for resilient supply and to jointly pursue measures that mitigate their environmental costs.