Vital Western alliance countries’ heavy dependence on China major problem: ‘dangerously exposed’

A new report says that Five Eyes intelligence partnership member countries – the United States, the United Kingdom, Canada, Australia and New Zealand – are heavily reliant on China for rare earth elements (REEs), a group of metallic elements that play a key role in the minerals supply chain market.

The Five Eyes Alliance is an integral part of global intelligence and security operations: the group cooperates on intelligence activities and shares intelligence to ensure collective security and thwart global threats.

Rare earth elements are needed to manufacture military equipment, and Western military supply chains are also highly vulnerable to a decision by China to restrict rare earth exports, the report noted.

The report The paper, “Reducing Dependence on Rare Earth Elements: How the Five Eyes Alliance Can Minimize the Risks of Rare Earth Trade with China,” argues that the Five Eyes countries need to diversify their sources of rare earth element supplies away from China.

More than 40% of Americans view China as an enemy, the highest level in five years, according to a Pew Research Center report.

The United States was once a major player in the rare earth elements market, but now it is heavily dependent on China, importing 80 percent of its rare earth elements from there, according to the report.

“The Five Eyes countries are dangerously exposed to China when it comes to rare earth minerals because they are overly dependent on China for this critical resource,” Helena Ivanov, an associate research fellow at the Henry Jackson Institute and author of the report, told Fox News Digital.

Chinese President Xi Jinping inspects the honor guard during a welcoming ceremony at the Great Hall of the People in Beijing, China on November 22, 2023. (Florence Law – Pool/Getty Images)

The report stresses that rare earth elements are used in defence technology such as fighter jets and that China could use its dominance in the industry for political purposes, using this advantage to exert influence on the world stage.

A spokesman for the House Select Committee on China Communist Party told Fox News Digital, without providing background, “The Chinese Communist Party is increasingly leveraging its control over markets, technologies, and critical minerals to pressure the United States and its allies and partners. To counter this predatory behavior, the United States must strengthen trade and technology cooperation with our allies and partners and reduce reliance on China in critical supply chains.”

China dominates the industry’s supply chain, accounting for 60% of global production and nearly 90% of market processing.

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Not only are rare earth elements a valuable resource for military technology, they are also essential in the manufacture of smartphones, digital cameras, computer hard drives, fluorescent and LED lights, flat-screen TVs, computer monitors and electronic displays.

“If no alternatives are found, North American critical minerals producers estimate that in the event of conflict, China could short-circuit supplies of critical minerals to the United States in the event of war, depleting stocks of minerals needed for the U.S. defense apparatus within 90 days,” the report warns.

Indo-Pacific Command commander Adm. John Aquilino testified before the House Armed Services Committee in 2023 that China will achieve President Xi Jinping’s goal of being ready to invade Taiwan by 2027. Given recent tensions over Taiwan, the group’s over-reliance on a Chinese adversary is a concern.

President Joe Biden (R) and Chinese President Xi Jinping walk together after meeting during the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week, Nov. 15, 2023, in Woodside, California. (Brendan Smiarowski/AFP via Getty Images)

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China has not hesitated to abuse its market power by restricting exports when it serves its interests and has used industry monopolies for political purposes in the past. The report noted that China has considered restricting exports of rare earth minerals, which are critical to the production of F-35 fighter jets and other weapons, in 2023.

Acutely aware of its vulnerability to Chinese market domination, the United States is taking steps to reduce its reliance on Beijing. The Defense Department and other agencies are building programs to bolster the domestic supply chain for REEs. In April, the Department of Energy announced $17.5 million in funding for four projects to help lower the cost and mitigate the environmental impact of REE extraction as part of President Biden’s bipartisan infrastructure legislation.

Baiyun Ebo or Bayan Obo rare earth mine. Baiyun Ebo or Bayan Obo is a mining town in Inner Mongolia, China. The mine is one of the largest deposits of rare earth metals in the world. (Bert Van Dyke/Getty Images)

In a statement at the time, Energy Secretary Jennifer Granholm said the announced investments “will help rebuild American manufacturing and revitalize energy and mining communities across the country, while strengthening our national security.”

The vulnerabilities highlighted in the report demonstrate the importance for Western allies to reduce their overall reliance on China. Without such risk mitigation, the report argues, democracies could face a situation similar to Europe’s reliance on Russian natural gas before Moscow’s invasion of Ukraine.

The only way out of this situation, according to the report, is cooperation within the Five Eyes alliance, where countries such as Canada, Australia and the United States can increase domestic production and reduce China’s influence in the market.

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“China has emerged as a malign actor in recent years, and reliance on China for rare earth elements carries significant challenges and risks,” the report said.