Two-Pager: China and Trade in Critical Raw Materials (CRMs): Understanding the means of exchange, control, and power amid heightened geopolitical tension

Disclaimer: This two-pager has been prepared by the CKN Secretariat and should not be considered the work of the individuals listed as authors of the report.

Key Takeaways

• Critical Raw Materials (CRMs) are now a lever of geopolitical power — and a matter of sovereignty for Europe.
• China's dominance of production and processing, once about resource security, is now just as much about industrial strategy and geopolitical leverage. Beijing is increasingly looking to capitalize on and entrench its advantage.
• Diversification for Europe is key, but CRM markets are fundamentally different from classical commodity markets, vastly complicating the effort. 
• Strong public-sector engagement is fundamental, but while the state must lead, it cannot succeed alone. Engagement and close coordination with the private sector is essential, as demonstrated in the case of Japan.
• Ultimately, the price of inaction far outweighs the cost of ensuring resilient CRM supply chains. 
• The Netherlands, as a logistics, warehousing and trading hub, has an outsized role to play in bolstering European resilience, even without significant domestic mineral deposits or processing capacity of its own.