China Must Shift from "Resource Advantage" to "Technology Advantage" in Rare Earths, Says Top Scientist Li Wei

China’s rare earth industry is at a critical "transformational crossroads." According to Li Wei, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), an academician of the Chinese Academy of Engineering, and Deputy Chief Engineer at China Iron & Steel Research Institute Group, the sector must pivot from relying on resource advantages to cultivating technology advantages.

In a recent interview with China Metallurgical News, Li Wei broke down the current landscape of the industry and what the 2026 Government Work Report means for its future.

The State of Play: Strengths and Weaknesses

Li Wei noted that while China holds a global lead in rare earth resources and separation capacity, the industry faces a mixed bag of opportunities and challenges.

• Strengths: The implementation of regulations like the Rare Earth Management Regulations has tightened supply controls. Meanwhile, downstream demand is surging, driven by new energy vehicles (NEVs) , wind power, industrial motors, humanoid robots, and the low-altitude economy.

• Weaknesses: Despite these gains, China still relies on imports for high-performance permanent magnets and advanced devices. Li Wei also pointed to an underdeveloped recycling system for secondary rare earths and disruptive price volatility that pressures the entire supply chain.

4 Key Policy Signals for the Rare Earth Industry from 2026

Li Wei highlighted four directives from the 2026 Government Work Report that will shape the future of the sector:

1. New Quality Productive Forces
The state is prioritizing high-level technological self-reliance. For rare earths, this means cracking core technologies in high-end permanent magnets and special materials to serve the new industrialization strategy and support pillar industries like low-altitude economies.

2. Supply Chain Security 
Rare earths have been elevated as a strategic national mineral resource. Ensuring a stable supply chain is now directly tied to national security in defense and high-tech fields. The focus is on stabilizing supply, maintaining order, and enhancing resource security capabilities.

3. Green Transformation
With a national push for green, low-carbon development, the rare earth industry—historically impactful on the environment—must accelerate green mining and smelting. The report emphasizes total volume control, energy efficiency, and strengthening the circular economy through better rare earth recycling.

4. Curing "Involutionary" Competition
The government aims to curb "involutionary" price wars. The industry must transition from price competition to value competition. Maintaining a reasonable price range is crucial not just for miners, but for the health of downstream manufacturing sectors that rely on these critical materials.

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