The dependency of European elites on Asian countries, particularly China, for rare earth minerals (REEs) and other strategic raw materials is extremely high, representing a major geopolitical and economic vulnerability.¹

This reliance, which spans from the extraction of raw materials to the critical stages of processing and manufacturing, is a central concern for the European Union's (EU) drive toward the green and digital transitions, which require massive quantities of these materials.²

This dependence is not merely a matter of material sourcing but one of entire supply chain control, granting Asian nations, chiefly China, significant leverage.³

Magnitude of European Dependency on Asian Supply

The EU's dependency on Asia for critical raw materials (CRMs) is most acute in the supply chain for Rare Earth Elements (REEs) and other materials essential for modern, high-technology applications.⁴

Rare Earth Elements (REEs)

The reliance on China for REEs is starkest:⁵

• Near-Total Reliance for Processing: Historically, the EU has relied on China for up to 98% of its rare earth imports.⁶ While recent statistics suggest a diversification in the point of import (with Russia and Malaysia showing up in later-stage processing imports), the fundamental problem lies in China's near-monopoly on processing and refining capacity globally.⁷ Most REEs mined outside of China still must be sent there for the complex separation and purification processes, making China an unavoidable intermediary.

• Essential for Strategic Industries: REEs are indispensable components in permanent magnets, which are vital for electric vehicle motors, wind turbines, advanced defense systems, and many digital technologies.⁸ The EU's ambitious Green Deal goals and its shift toward electric mobility and renewable energy are thus fundamentally underpinned by this Asian supply chain. For example, some reports indicate that China supplies as much as 41% of its global rare earth permanent magnet exports to Europe.⁹

Other Critical Raw Materials

Beyond REEs, a heavy reliance on Asian sources, and China's processing dominance, exists for several other CRMs identified by the European Commission:

The Geopolitical and Economic Consequence

This high degree of dependency translates directly into significant geopolitical and economic risks for Europe:¹⁰

Supply Chain Vulnerability and Strategic Blackmail

Concentration in supply chains is Europe's single greatest risk. When a high percentage of a critical material comes from a single political jurisdiction—particularly one with which the EU has a complex relationship, identifying it as a "systemic rival" in some domains—the risk of supply disruption is extreme.

• Weaponization of Trade: China has demonstrated its willingness to use its dominant position for political ends, as seen in the 2010 rare earth export restriction to Japan and more recently with export restrictions on gallium and germanium.¹¹ This leverage can be used to influence European foreign policy decisions, industrial strategy, or to slow the progress of European rivals in green technology sectors.¹²

• Geopolitical Events: Any major geopolitical crisis, such as a conflict in the Taiwan Strait, could instantly sever or severely disrupt supply lines for a huge range of CRMs and manufactured components, paralyzing key European industries from automotive to defense.¹³

Industrial Competitiveness and Technological Autonomy

The reliance on Asian nations, particularly China, extends beyond raw materials to mid- and downstream products like battery cells, solar panels, and permanent magnets.¹⁴ This means Europe risks becoming dependent on competitors not only for the materials but for the manufactured components that drive the green and digital transitions.

• Loss of Value-Chain Control: Europe’s lack of significant processing, refining, and manufacturing capacity for these materials means it captures less of the economic value, exports wealth, and forfeits control over industrial standards and intellectual property.

• Slowing the Green Transition: The pace and cost of Europe's transition to a low-carbon economy are directly linked to the secure and affordable supply of these Asian-dominated materials. Supply shocks or price hikes can delay the deployment of electric vehicles and renewable energy infrastructure.

European Response: The Critical Raw Materials Act (CRMA) and Diversification

Recognizing the existential nature of this dependency, the EU has launched aggressive policy initiatives to enhance its strategic autonomy and resilience.¹⁵

The Critical Raw Materials Act (CRMA)

The CRMA, proposed in 2023 and entering force in 2024, is the cornerstone of the EU's strategy. It sets concrete benchmarks across the entire strategic raw materials value chain to reduce the single-country dependency by 2030:

The Strategy for De-Risking and Diversification

The EU's strategy for achieving these goals involves a multi-pronged approach focused on de-risking rather than outright decoupling from Asian supply chains:¹⁶

1. Domestic Capacity Building: The EU is streamlining permitting procedures and investing heavily in domestic mining, processing, and refining projects, such as new rare earth separation plants in Norway and Estonia, and lithium projects across Europe.¹⁷

2. Circular Economy: A major focus is on recycling and promoting "circular by design" manufacturing. Boosting the recycling rate for materials in complex products like permanent magnets and batteries is crucial to lowering primary material import dependence.¹⁸

3. Strategic Partnerships (Global Gateway): The EU is actively pursuing new, mutually beneficial partnerships with resource-rich countries outside of China, particularly in Africa (e.g., the Democratic Republic of Congo for Cobalt) and Latin America (e.g., Chile and Argentina for Lithium).¹⁹ The EU is also seeking to strengthen ties with ASEAN countries like Vietnam and the Philippines, which possess significant deposits of REEs, nickel, and other CRMs.²⁰

4. Learning from Allies: Europe is looking to the successful strategy of Japan, which, following the 2010 rare earth crisis, invested strategically in alternative supply chains, for instance, by financing rare earth processing in Malaysia.²¹ This effort successfully reduced Japan's reliance on China for rare earth elements from approximately 90% to around 59%.

Conclusion: A Difficult Road Ahead

The dependency of European elites on Asian nations for rare earth minerals and strategic raw materials is a structural and systemic challenge. The reliance on Asia, overwhelmingly China, for the processing and refining of materials is far more critical than raw ore extraction, as this downstream control gives Beijing unparalleled industrial and geopolitical leverage.

While the CRMA sets ambitious and necessary targets, achieving them by 2030 remains an enormous undertaking. Diversifying away from a country that has spent decades building market dominance and a massive cost advantage in resource processing will require sustained political will, billions in public and private investment, significant technological innovation (including in material substitution), and a willingness to overcome domestic opposition to new mining projects. The short-term dependence on Asian (primarily Chinese) supply chains for the foundational components of the green and digital economy will persist for the foreseeable future, making supply chain resilience a core tenet of European strategic policy.