China's dominance in rare earths has chink as US, Japan hold most high-value patents
New Delhi, July 6
China's dominance in the rare earth industry suffers from a key structural weakness as most of the core patents for advanced rare earth functional material technologies are held by the US and Japan, according to a study.
According to a report in the South China Morning Post, the researchers found that downstream products derived from processed rare earths -- including permanent magnets, catalysts, luminescent and polishing materials -- account for more than 80 per cent of rare earth-related patents across the world. These constitute the most commercially important applications in industry.
Japan retained an overall technological lead in permanent magnets, while the US led in most core technologies related to catalytic materials, luminescent materials and polishing materials, the study states.
China was found to have an edge in only a limited number of technologies in these sectors while continuing to trail Japan and the US in several critical manufacturing processes and material systems, the report said.
China accounts for about 70 per cent of global rare earth mining and nearly 90 per cent of processing capacity, making it the dominant player in the global supply chain. However, this has not translated in similar control of higher-value technologies built on them, the study observes.
This dominance has long been viewed as a strategic advantage, which Beijing has sought to leverage in its trade and strategic competition with the US.
According to the report, the study attributed the gap partly to China's innovation system, noting that while the country files a large number of rare earth patents, only a relatively small proportion are international patents that have high commercial value.
The research also reveals that many scientific advances have yet to develop into commercially significant patent portfolios as coordination among universities, industry and intellectual property management remains weak.
However, China has been using its dominance over rare earth as a weapon of modern economic statecraft as it exploits Western dependencies on materials essential for defence systems such as fighter jets and missiles, renewable energy technologies, and electric cars and electronic devices such as smartphones.
— IANS
Reader Comments
Interesting how China has the mining monopoly but still can't dominate the high-value patents. Shows that real strategic advantage comes from innovation, not just controlling supply. India should take note - we have rare earth reserves too but lack the tech ecosystem.
The article says China has weakness in downstream patents but they're still using rare earths as a geopolitical weapon. 😕 India must accelerate exploration of our rare earth deposits in Odisha, Andhra and Rajasthan. Also need strong IP regime to encourage Indian companies to file patents in this space.
The US and Japan should use this patent leverage wisely. China's 70% mining share is concerning but if they can't commercialize the high-value tech, their leverage is limited. Still, the West needs to diversify suppliers - India and Australia could be alternatives.
What struck me is that China files many patents but few are international quality. This is a common Indian problem too - we need better industry-academia coordination. Our IITs and IISc should collaborate more with companies to create commercially viable rare earth technologies. 🌟
This is the kind of strategic analysis India needs. While we focus on chip manufacturing and semiconductors, rare earths are equally critical for defense and green energy. We must create a national rare earth mission like Japan did decades ago. Otherwise we'll remain dependent on imports for permanent magnets and catalysts.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.