Vekasi testifies before U.S.-China Economic and Security Commission

Kristin Vekasi, associate professor at the Department of Political Science and School of Policy and International Affairs at the University of Maine, testified in front of the U.S.-China Economic and Security Commission on her research about rare earth policies on June 9, 2022.

A copy of her testimony can be found online. 

Vekasi testified that in general, the risk in the rare earth sector comes from environmental impacts in the process of mining and refining the 17 elements, the high level of technological expertise required and the information failures, like the lack of reliable and transparent price information that makes it challenging for new players to enter the market. Despite these risks, China has dominated the rare earth industry over the past few decades using market intervention, industrial policy and investment in the necessary expertise. 

However, concentrating the market for these essential elements in China makes the supply chain vulnerable. Vekasi said that China will not be able to meet domestic or global demand for rare earths — particularly the rare earths used as permanent magnets, the demand for which has sharply increased in part due to the growth of the electric vehicle and green technology market. 

“Relying on a single geographic source for any key material inherently introduces vulnerability in a supply chain, even without concerns about rivalrous politics,” Vekasi said. “We have seen increased weaponization of trade and supply chains around the world over the past decade, including from China with rare earth elements. However, more than the intentionality suggested by potential economic coercion, geographically concentrated raw mineral supply chains increase vulnerability because there is simply an inability to nimbly respond to any crisis or a demand shock.”

To address the supply chain vulnerabilities of the global rare earth industry, Vekasi recommended that the United States government diversify along the midstream of the supply chain by investing in basic research, increasing funding and opportunities for national labs and facilitating public-private knowledge transfer. She also said that the United States should direct the Department of Commerce to increase information transparency in rare earths — for example, by developing an international price index in cooperation with China.

“This task could also potentially be accomplished through cooperation with international organizations such as the International Monetary Fund,” Vekasi said. “Price transparency would facilitate success for new market entrants.”

Finally, Vekasi recommended that the United States emulate Japan’s model of public-private funding for new mining and separation facilities that help overcome initial political and environmental risks in the rare earth sector. 

“Even with public funding, it is likely that private companies will need to lean on Chinese expertise to develop a resilient business model,” Vekasi said. “The United States should recognize China’s technical leadership in this sector and not prohibit private-sector cooperation with Chinese commercial entities in order to be eligible for opportunities.”

Previously, Vekasi has written articles about rare earth policies in China for outlets like East Asia Forum. Vekasi spent her 2021–22 sabbatical year at Harvard University, where she used her position as academic associate with the Weatherhead Institute’s U.S.-Japan Program to advance research for her second book about how China, Japan, and the United States cooperate and compete to manage complex supply chains. Vekasi published early research for the book on the geoeconomics of critical rare earth minerals in fall 2020 with the Georgetown Journal of International Affairs.

A recording of the full hearing, U.S.-China Competition in Global Supply Chains, can be found on the U.S.-China Economic and Security Commission website.

Contact: Sam Schipani,