DECODING: China Arms Its Rare Minerals Monopoly — The Reporting Mechanism That Changes Everything

MOFCOM Announcement No. 26

On June 24, 2026, China's Ministry of Commerce (MOFCOM) published Announcement No. 26, which entered into force on July 1, 2026. This official announcement establishes a reporting mechanism for violations of export controls on Chinese strategic minerals. In plain terms: any person or entity with knowledge of a violation of strategic mineral export rules can now report it to Chinese authorities, with a financial reward attached. It is an institutionalized informant mechanism applied to the geopolitics of natural resources — and it is directed against Western companies that might try to circumvent Chinese controls on rare earths, permanent magnets, and other materials critical to the Western defense industry.

This mechanism comes after a series of progressive measures that Beijing has deployed since 2023: export bans on gallium and germanium in July 2023, restrictions on graphite in December 2023, then controls on heavy rare earths in 2024. Announcement No. 26 represents a new stage in this strategy: not only does Beijing control who can receive its minerals — it now creates an internal and external surveillance network to ensure the rules are respected. This is the shift from a legislative arsenal to an enforcement arsenal.

Why this mechanism changes the rules of the game

Until July 1, 2026, Chinese export controls on strategic minerals relied primarily on corporate goodwill and the inspection capacities of customs authorities. Circumvention routes existed — through third-party countries, through intermediary suppliers, through complex commercial arrangements. Announcement No. 26 changes this context by creating financial incentives for people inside supply chains to report these circumventions. An employee of an intermediary company, a commercial competitor, a disgruntled supplier — all become potential paid informants on behalf of Beijing.

For Western companies that had invested in strategies to circumvent Chinese controls — through purchases via third-party countries, through preventive stockpiling, through partnerships with still-insufficient non-Chinese suppliers — this mechanism represents a direct threat. The legal certainty of their operations suddenly diminishes. The risk of a report, even unjust, creates pressure across the entire strategic mineral supply chain. It is a subtle but powerful economic weapon.

A reporting mechanism for strategic minerals — that perfectly summarizes the current state of global economic relations. Beijing is no longer content with possessing the resources. It is now building a surveillance system to ensure no one can circumvent them. This is the geopolitics of natural resources raised to a level of sophistication that should alarm every Western capital.

More than 90%: a dominance without equivalent in modern history

China controls more than 90% of global rare earth processing. This figure, repeated in strategic reports for years, does not lose its extraordinary character from being cited repeatedly. In no other strategic global sector — neither oil, nor steel, nor semiconductors — does a single country hold such an overwhelming share of the processing of essential materials. For heavy rare earths used in the most advanced weapons systems, this monopoly is even more concentrated: 99% of global separation takes place in China.

Regarding neodymium permanent magnets — essential for electric motors, drones, guided missiles, submarine propulsion systems — China controls 94% of global production. These magnets are present in the F-35 fighter, in precision-guided missiles, in attack submarines, and in virtually all modern military drones. Western dependence on these Chinese magnets is not theoretical — it is measurable in components integrated into weapons systems deployed on real operational theatres, including in Ukraine.

The 2026 American legislation and the strategic urgency

The US Congress adopted a law in 2026 requiring that American weapons systems use no material of Chinese origin by 2027. This deadline is simultaneously a strategic necessity and a colossal logistical challenge. American military supply chains were built over decades of dependence on cheap Chinese materials. Rebuilding them entirely in under a year is a task that exceeds currently available industrial capacity. But the legislative objective is clear: end the strategic vulnerability this dependence represents.

The irony is chilling: the United States develops weapons systems intended to deter or combat China, while depending on China for the materials that go into those same weapons systems. It is a mutually destructive dependence that both countries allowed to develop over decades — and which Beijing has decided, unilaterally, to transform into a lever of economic and political coercion.

94% of global neodymium magnets. 99% of heavy rare earth separation. These figures are not incidental — they are the industrial translation of a strategic Chinese decision made thirty years ago: dominate tomorrow's minerals while the West focused on software and finance. The West made a choice. It is now paying the price.

The reporting mechanism: how it works and its scope

MOFCOM Announcement No. 26 establishes a formal system through which individuals and companies can report to Chinese authorities alleged violations of export controls on strategic minerals. These reports can cover unauthorized exports, destination diversions, commercial arrangements designed to circumvent restrictions, or any other practice contravening the export control rules in force. Verified whistleblowers receive a financial reward — a direct motivation mechanism inspired by similar practices in other regulatory domains.

The potential scope of this mechanism extends beyond Chinese borders. Commercial intermediaries based in Hong Kong, Singapore, Dubai — which often served as platforms for mineral transactions bypassing direct controls — are now potentially under surveillance. Employees of these intermediary companies who have knowledge of suspicious transactions can report them. Commercial competitors can use this mechanism against their rivals. Surveillance becomes decentralized, diffuse, and very difficult to avoid entirely.

The minerals targeted and their strategic importance

Announcement No. 26 covers all strategic minerals subject to Chinese export controls — a list that has grown significantly since 2023. It includes: the 17 rare earths (neodymium, dysprosium, terbium, etc.), gallium (essential for semiconductors and military electronic components), germanium (military optics, optical fibers), bismuth, cobalt (batteries and heat-resistant alloys), tungsten (armour-piercing munitions, armoring), and graphite (batteries for electric vehicles and drones). This is the 21st-century war economy's shopping list.

Each of these materials has a direct or indirect military application. Neodymium magnets in missile actuators. Gallium in military radars and communication systems. Germanium in night-vision goggles and optical guidance systems. Tungsten in armour-piercing shells. This list is not arbitrary — it is built around the materials that power the Western military arsenal. China controls the vast majority of supplies for all of them. Announcement No. 26 secures that control.

When I read the list of minerals covered by Announcement No. 26, I am actually reading the list of materials that power the American military, the NATO military, and to a large extent the defense industry that supports Ukraine. Beijing has built a geopolitical lever of surgical precision. And it has just equipped itself with an enforcement mechanism to ensure it holds.

Thirty years of deliberate dominance

China's monopoly on rare earths is not a geological coincidence — it is the result of a deliberate and systematic industrial policy dating back to the 1990s. At the time, the United States, Australia and other countries had their own rare earth mines. But China practiced dumping prices, massively subsidized its extraction and processing, and progressively eliminated international competition. American mines closed. European processing capacities disappeared. And China found itself sole master of a resource the entire world needed.

This strategy is often cited as one of the most successful examples of long-term industrial policy in recent history. It was guided by the formula of leader Deng Xiaoping: "The Middle East has its oil, China has its rare earths." This phrase, spoken in 1992, was the industrial roadmap for an entire generation of Chinese economic planners. Thirty years later, the objective has been achieved beyond all initial expectations: not only does China have its rare earths, it holds them with an iron fist.

Investments in Africa and Asia: securing the upstream

China does not merely control rare earth processing — it also secures the extraction of raw ores in supplier countries. In the Democratic Republic of Congo — which supplies 70% of global cobalt — Chinese companies control the majority of mines. In Zambia, Namibia, Australia, Myanmar — massive Chinese mining investments secure access to raw materials. The strategy is vertically integrated: control the mines upstream, processing in the middle, magnet and component production downstream. An integrated value chain that the West still struggles to duplicate.

These African and Asian investments are often paired with investments in local infrastructure — roads, ports, power lines — which create economic dependencies with host countries. This is the "Belt and Road" policy applied to mineral resources: not just buying the resources, but integrating local economies into the Chinese value chain deeply enough that they become difficult to dismantle through Western alternatives.

Deng Xiaoping was right about rare earths — and his successors spent thirty years fully proving him right. This is the type of multigenerational strategic vision that Western democracies, with their four-year electoral cycles, find very difficult to replicate. This is not a critique of democracy — it is an observation of its structural limits when facing an autocracy capable of planning over thirty years.

Weapons systems directly dependent on Chinese minerals

The Western defense industry's dependence on Chinese minerals is not abstract — it is documented system by system. The F-35 fighter contains neodymium-iron-boron magnets in its control surface actuators, sensors, and energy management systems. American and British attack submarines use neodymium magnets in their quiet propulsion motors. Precision-guided missiles — Javelin, HIMARS, Storm Shadow — contain rare earth components in their electronic guidance systems. Military drones, including those used in Ukraine, integrate rare earth magnets and components in their motors and control systems.

This dependence was not deliberately designed — it developed over decades of industrial optimization, where manufacturers chose the cheapest components available on the global market. China offered cheap rare earths and magnets. The Western defense industry took advantage of this. And now this supply chain is a major strategic vulnerability that Beijing can activate at any time.

The Ukrainian programme and rare earth needs

The war in Ukraine has made this dependence urgent in a way that defense planners had not anticipated. The production of FPV drones, anti-aircraft defense systems, and guided munitions at the scale required by a high-intensity conflict mobilizes massive quantities of rare earths and permanent magnets. Allies seeking to increase their weapons production for Ukraine — and to replenish their own stocks — are running into the reality: supply chains for critical materials still largely pass through China.

This is where Announcement No. 26 takes on its full strategic significance. By tightening control over critical mineral exports and establishing a dissuasive surveillance mechanism, China creates additional friction in the West's ability to accelerate its weapons production. This may not be the primary intention of this announcement — but it is a direct and foreseeable consequence.

The drones defending Kyiv contain neodymium magnets almost certainly made from Chinese rare earths. This is an uncomfortable reality that no one wants to name too loudly. But it is a reality that Announcement No. 26 makes even more dangerous. Every additional restriction on these materials is a constraint on Ukraine's ability to defend itself. This link is direct. It deserves to be stated.

Mining projects outside China: a colossal construction site

Facing this dependence, Western governments have launched diversification programmes. The United States is investing in the Mountain Pass mine in California — one of the rare rare-earth mines outside China — and in the development of domestic processing capacities. Australia is developing rare earth mining projects with massive government support. The European Union has launched the Critical Raw Materials Act which aims to extract 10% of its needs on its own territory and diversify its import sources by 2030.

These projects are real and represent a necessary strategic investment. But they have a fundamental problem: time. Opening a new rare earth mine, building the necessary processing capacities, training the qualified workforce — it is a process that takes 10 to 15 years minimum. Projects launched today will not be operational at full capacity until at best the mid-2030s. Until then, dependence on Chinese minerals remains structural for the bulk of Western industrial and military needs.

Japan under restrictions since January 2026

China imposed strict export controls on Japan in January 2026, covering more than 1,000 product categories. Japan is particularly vulnerable to these controls — its automotive and advanced electronics industry is massively dependent on Chinese rare earths and critical metals. This bilateral restriction targeting Japan — a first-tier ally of the United States — is the practical demonstration of what Beijing can do when it uses its minerals as a geopolitical weapon. And it is a direct warning for all other allies.

Japan's response has been to launch emergency programmes for strategic stockpiling, supplier diversification, and research into substitutes. These measures are necessary but insufficient in the short term. Japan has become in a sense the real-scale laboratory of what it means to face Chinese restrictions on strategic minerals — an experience from which Europe and the United States should urgently draw lessons.

Japan is testing in real time what it means to depend on China for critical materials — and to live with the restrictions. That is the next step for Europe and the United States if nothing changes structurally in the coming years. Mountain Pass will not be enough. The European Critical Raw Materials Act is a good idea but not at the scale of the problem. What is needed is an industrial mobilization comparable to a war effort — and fast.

Biden then Trump policy on critical minerals

Both the Biden and Trump administrations recognized the strategic vulnerability created by dependence on Chinese minerals — but their approaches differed. The Biden administration had favoured industrial subsidies (via the Inflation Reduction Act), partnerships with allies to diversify supply chains, and diplomatic negotiations with African and Latin American producing countries. The Trump administration maintained and amplified these approaches, while adding tariff pressure elements on manufactured products including Chinese minerals.

The 2026 law requiring the absence of Chinese-origin materials in weapons systems by 2027 is the most ambitious and urgent measure. It creates massive demand for alternatives to Chinese minerals — which should in theory stimulate investments in mines and processing capacities outside China. But demand can exist without alternative supply being available within the required timeframe. The risk is that the law creates component shortages in critical armament programmes.

Strategic partnerships with Africa and Latin America

The United States, the EU and other allies are seeking to develop mining partnerships with countries that have the resources but lack capital and processing technology. The Democratic Republic of Congo for cobalt, Bolivia for lithium, Chile for copper, Australia for rare earths — all targets for strategic partnerships. But in each of these countries, China often has a considerable head start: prior investments, established relationships, built infrastructure. Closing this gap takes considerable time and resources.

The competition for mining resources in developing countries is therefore directly linked to the broader geopolitical competition between the West and China. Africa and Latin America are theatres of this silent competition — spaces where economic choices made by local governments have direct consequences on the military capacities of the great powers. This reality is rarely discussed publicly but it is at the heart of great power foreign policy.

The race for strategic minerals in Africa and Latin America may be the true great war of this century — not a war with weapons, but an economic and diplomatic war for control of the resources that will power the economy of 2040. The West is behind. China has been there for thirty years. Massive acceleration is needed — or a dependence that will last must be accepted.

China between economic support for Russia and control of Western minerals

China plays an ambiguous role in the Ukrainian conflict. Officially neutral, it has maintained economic relations with Russia that have provided crucial economic support under Western sanctions. At the same time, by controlling the critical minerals that the Western defense industry needs to support Ukraine, China exerts influence over the West's capacity to support Kyiv. This is not a contradiction in Chinese policy — it is a maximum-leverage strategy: help Russia enough that it continues to drain Western resources, while limiting Western military production capacity.

This balance is deliberately calibrated. Beijing does not want Russia to lose — that would demonstrate that autocratic powers can be defeated, a dangerous signal for Taiwan. But Beijing also does not want Russia to win too easily — that would grant Putin a prestige and strategic autonomy that Xi prefers to keep under control. Control of strategic minerals is a perfect tool for this policy: it subtly weakens the West's capabilities without directly engaging it in the conflict.

What Announcement No. 26 means for arms deliveries to Ukraine

Announcement No. 26 adds a layer of complexity to the supply chain for armaments destined for Ukraine. American and European defense companies increasing their production to meet Ukrainian needs will have to manage their critical material supply sources with even more care. Costs increase. Timelines lengthen. The capacity for rapid production scale-up — essential in a rapidly evolving conflict — is constrained.

This is not catastrophic in the short term — existing stocks and partial alternative suppliers allow maintaining a flow of deliveries to Ukraine. But in the medium term, if the war continues — and everything suggests it will — the question of critical materials will become an increasingly determining factor in the West's capacity to maintain the pace of support for Kyiv. This is a risk that Western defense planners must integrate now.

China does not need to send soldiers to Ukraine to influence the course of the war. It only needs to control rare earths, tighten export rules, and establish a reporting mechanism to ensure no one circumvents its rules. This is unprecedented geopolitical power in modern economic history. And the West has not yet found a response equal to the challenge.

What the European act on critical materials intends to do

The European Union adopted the Critical Raw Materials Act (CRMA) as part of its strategy to reduce strategic dependencies. The act sets ambitious objectives: to extract at least 10% of annual critical material needs on European soil, to process at least 40% of these needs in Europe, and not to depend on a single third-party country for more than 65% of its imports of a given material by 2030. This last objective is directly aimed at China, which exceeds this threshold for most rare earths.

The CRMA is accompanied by a financing framework, an accelerated approval mechanism for strategic mining projects, and bilateral partnerships with producing countries. On paper, it is a complete and coherent political response. In industrial reality, the challenges are considerable: mining permits still take years in Europe, local communities often oppose extraction projects, and processing capacities require massive investments.

European strategic partnerships: a race against dependence

The EU has signed strategic critical materials partnerships with Namibia, Angola, Kazakhstan, Canada and other countries. These partnerships aim to secure access to raw materials while offering European financing for local industrial development. But several of these countries also have partnerships with China — and Beijing sometimes uses its influence to discourage too exclusive an alignment with the West.

The fundamental question is one of time. Announcement No. 26 is effective now. Alternatives to Chinese minerals will not be available at large scale until at best 2030-2035. During this ten-year interval, the Western defense industry remains structurally vulnerable. The European response is correct in its direction but insufficient in its pace. And in the geopolitics of resources, pace is everything.

The European objective of 10% domestic extraction and 40% domestic processing — it is ambitious and necessary. But it is also the demonstration that even by aiming very high, Europe accepts remaining dependent on China for 60% of its rare earth processing in the best scenarios. That is not a strategic victory. It is damage limitation. We need to aim higher and move faster.

What the West can do in the short term

Facing Announcement No. 26, Western governments and industries have several short-term levers. First, the constitution of strategic stockpiles of critical minerals — an approach the United States has begun deploying via the Defense Logistics Agency. These stockpiles allow operations to continue for several months or years without new Chinese imports, buying time for alternatives to develop. Second, accelerating purchases from existing non-Chinese suppliers — Australia, Canada, the United States itself — even at higher costs.

Third, the urgent development of rare earth recycling capacities from end-of-life equipment. The secondary rare earth defense — recovering these materials from used magnets, batteries, electronic equipment — is a source that could cover a significant portion of needs if developed at scale. Companies like Cyclic Materials in the United Kingdom and similar initiatives in Germany and the United States are working on these technologies. They need massive government support to scale up rapidly.

What the West must do in the medium term

In the medium term, the response to China's mineral strategy must include structured international mining cooperation among democracies — an equivalent for strategic minerals of what the IEA is for oil. A mechanism to coordinate stockpiles, common rules for preferential purchasing from allied suppliers, and coordinated investments in processing capacities outside China would significantly reduce collective vulnerability. Initiatives like the Minerals Security Partnership launched in 2022 point in this direction — but they remain too slow and too undercapitalized relative to the stakes.

Public recognition that critical minerals are a national security issue — comparable to oil in the 1970s — would allow mobilizing the political, financial and industrial resources equal to the challenge. The 1973 oil shock led to the creation of the IEA and massive investments in alternative energies. Announcement No. 26 should be that shock for strategic minerals. Democracies have the potential to respond. They need the political will.

Strategic stockpiles, recycling, mining partnerships — all of this is necessary and all of it takes time. What I would have liked to see ten years ago is exactly what is being started today. That is frustrating. But it is better to start today than tomorrow. Announcement No. 26 is the alarm signal that no one had been willing to hear loudly enough. It is now impossible to ignore.

A model that could be replicated by other countries

Announcement No. 26 establishes a precedent: a country can use control of its natural resources as a geopolitical coercion tool with a remarkable level of institutional sophistication. This model could be replicated by other countries that control critical resources. The Democratic Republic of Congo for cobalt, Bolivia for lithium, Indonesia for nickel — all countries that observe the success of the Chinese strategy and might be tempted to imitate it to maximize their negotiating power in the global economy.

If several major critical resource-producing countries simultaneously adopt mechanisms similar to Chinese export controls, Western access to materials necessary for the energy transition and military modernization would become even more complex and costly. This is a scenario of fragmentation of global supply chains that economists call "friendshoring" or "reshoring" — representing a structural transformation of the global economy with considerable but perhaps unavoidable costs.

The stakes for Taiwan and Indo-Pacific security

China's strategic minerals strategy is also a direct stake for Taiwan's security. In the event of armed conflict in the Taiwan Strait, China would immediately cut its strategic mineral exports to powers supporting Taiwan. This economic weapon represents a deterrence factor against Western military intervention in any conflict involving China. American and allied defense planners must integrate this risk into their Taiwan crisis scenarios.

Diversification of strategic mineral sources is therefore not merely an economic or environmental question — it is a precondition for any credible security policy in the Indo-Pacific. A West that still massively depends on Chinese minerals cannot credibly defend Taiwan if doing so implies cutting off access to those minerals. Strategic coherence requires resolving the mineral dependence before the Taiwan crisis erupts.

The Taiwan scenario may be the ultimate reason why the West must resolve the strategic minerals emergency. If a crisis in the Taiwan Strait erupts and China cuts its rare earth exports, the F-35s will keep flying — but for how long? Strategic stockpiles, diversification, recycling — none of this is economic abstraction. It is concrete military preparation.

What Announcement No. 26 says about the evolution of international economic law

Announcement No. 26 also represents an innovation in international economic law. It extends the application of Chinese export controls far beyond Chinese borders by creating financial incentives for non-Chinese nationals to report violations abroad. This is an extraterritorial extension of Chinese law that recalls American sanctions mechanisms — notably secondary sanctions that punish companies from third-party countries trading with entities sanctioned by the United States. But applied to natural resources rather than financial entities, this innovation is particularly powerful.

This legal evolution raises fundamental questions about the governance of international trade in natural resources. The World Trade Organization (WTO) has rules on export controls, but their application is slow and their effectiveness limited against a strategy deployed by the world's largest economy. Legal challenges that countries like the United States, the EU or Japan might bring to the WTO against Chinese controls take years — during which dependence continues.

China's position in the global trade order

China has clearly indicated through Announcement No. 26 that it is prepared to use its dominant economic position in strategic minerals as a tool of foreign policy and national security, at the price of increased tension with international trade rules. This choice reflects growing confidence in Beijing in its capacity to absorb economic retaliation — and a conviction that divided and dependent Western democracies will struggle to coordinate a response strong and rapid enough.

This confidence from Beijing is not without foundation in recent history — Western responses to previous Chinese restrictions on minerals have been slow and fragmented. But it could be put to the test if democracies finally decided to treat strategic minerals as a top-tier national security priority — with the resources, speed and coordination that implies. Announcement No. 26 may be the spur that finally triggers this mobilization.

Beijing is betting that the West will be too slow, too divided, too dependent to respond effectively to its mineral strategy. That bet has been largely winning until now. The question is whether Announcement No. 26 is one step too far — the tipping point after which democracies finally mobilize the necessary resources. I hope so. But I do not assume it.

The concrete impact on industrial supply chains

For Western companies sourcing strategic minerals, Announcement No. 26 creates a new and anxiety-inducing legal environment. The legal departments of major American defense groups — Lockheed Martin, Raytheon, Northrop Grumman — as well as European industrialists like Airbus, MBDA, or Leonardo, have had to review their supply contracts and compliance procedures. The risk is no longer only commercial — it is legal and diplomatic. A report of a violation by a competitor or a malicious intermediary could trigger Chinese procedures with consequences on existing export permits.

Company adaptation strategies are multiple. Some are accelerating dual sourcing — maintaining two suppliers for each critical material, including at least one non-Chinese, even at higher cost. Others are investing in technological substitutes: ferrite magnets or samarium-cobalt magnets can partially replace neodymium magnets in some applications, with reduced performance but without Chinese dependence. Others are accelerating recycling programmes to recover rare earths from end-of-life equipment. Each of these strategies has a cost — but this cost is now perceived as a necessary strategic insurance.

The role of industry associations and governments

Facing this new reality, defense industry associations in the United States and Europe are intensifying their lobbying for additional government resources: loan guarantees for mining investments, long-term purchasing contracts that secure demand for alternative suppliers, and research programmes on rare earth substitutes. These measures exist but remain insufficient relative to the scale of dependence. Announcement No. 26 should accelerate their deployment by making the urgency even more obvious for political decision-makers.

Transatlantic coordination is essential in this approach. If the United States and the EU coordinate their preferential purchases from alternative suppliers, they create a sufficient mass of demand to make mining and processing investments outside China economically viable. Without this coordination, each country acts alone — insufficient to create the economies of scale needed. The Minerals Security Partnership is an existing framework that could serve as a vehicle for this coordination, if endowed with resources equal to the stakes.

The defense companies adjusting their supply chains in the face of Announcement No. 26 are doing the necessary work — but in urgency and without a safety net. What they needed was a coherent industrial policy ten years ago to avoid finding themselves in this situation. What they are doing today is repairing broken pots. Better that than nothing. But the cost of improvisation could have been avoided.

Military AI and its rare earth needs for semiconductors

The military artificial intelligence revolution adds an additional layer to critical mineral dependence. The GPU chips that power military AI systems — autonomous drones, satellite image analysis, assisted decision-making systems — require gallium, germanium, and other special materials in their manufacturing. China controls the vast majority of global supply of gallium and germanium — and it has already imposed export restrictions on both materials since 2023.

This double dependence — rare earths for conventional weapons, gallium and germanium for military AI — creates a scenario where China can simultaneously constrain the conventional military and the AI capabilities of Western adversaries. In a future war where AI plays a decisive role in informational and operational superiority, this dependence is a first-order strategic vulnerability. It must be treated with the same urgency as dependence on traditional rare earths.

Taiwan and semiconductors: a third layer of dependence

Taiwan manufactures approximately 90% of the world's most advanced semiconductors — primarily via TSMC. These chips are necessary for the most advanced weapons systems, missile defense systems, and military AI capabilities. Dependence on Taiwan for semiconductors and on China for the minerals that go into their manufacturing creates a triple vulnerability for the Western defense industry. In the event of a crisis in the Taiwan Strait, both sources — Chinese minerals and Taiwanese semiconductors — could be simultaneously disrupted.

This reality further reinforces the urgency of diversifying critical mineral supply sources and developing advanced semiconductor manufacturing capacities outside Taiwan. The American CHIPS Act and the European Chips Act aim to develop these domestic capacities. But as with rare earths, the timeline is long — and the vulnerability is present now. Announcement No. 26 worsens this equation by tightening control over the minerals that go into manufacturing the most advanced chips.

Rare earths for magnets. Gallium for AI chips. Taiwanese semiconductors for weapons systems. Each additional layer of dependence is one more lever for Beijing. The question is no longer whether China would use these levers in a crisis — Announcement No. 26 demonstrates it is prepared to use them now, in peacetime, for economic policy objectives. In time of war or serious crisis, these levers would be activated without hesitation.

What this mechanism reveals about China's global strategy

MOFCOM Announcement No. 26, which entered into force on July 1, 2026, is not a simple regulatory adjustment in the international trade of minerals. It is the expression of a coherent and long-term geopolitical strategy: using the strategic minerals monopoly to constrain the political and military choices of powers dependent on those resources. By establishing a paid reporting mechanism for violations of these controls, Beijing reinforces the enforcement of this strategy in a way that will be difficult to circumvent in the short term.

This announcement fits within a continuum dating back to the 1990s and Deng Xiaoping's vision on rare earths. It demonstrates China's capacity to think and execute strategies over decades — a capacity that democracies with short electoral cycles struggle to match. But democracies have other strengths: technological innovation, the ability to mobilize massive private resources, and alliances that can multiply individual capacities. These strengths must now be mobilized urgently.

What the West must do to avoid losing this economic war

The response to Announcement No. 26 cannot be sectoral or national. It must be transatlantic and systemic. Democracies must coordinate their strategic stockpiles, their foreign mining investments, their domestic processing capacities, and their partnerships with producing countries. They must treat critical minerals with the same urgency and institutional attention as oil in 1973. And they must accept paying a short-term economic price — more expensive materials, less optimized supply chains — to reduce a strategic dependence that threatens their long-term security.

Ukraine, in this context, is both a beneficiary and a hostage of this dynamic. The weapons defending it depend on minerals that China controls. The allies supporting it are constrained in their production capacity by this dependence. Resolving the strategic minerals question means also strengthening the West's capacity to support Kyiv over the long term. These two stakes — minerals and Ukraine — are linked in the same strategic equation of the 21st century.

By Maxime Marquette, columnist

Editorial stance

I am not a journalist but a columnist and analyst. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. I claim analytical clarity, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

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