Reducing dependence on China in the world’s critical mineral supply chain doesn’t require building a separate market. The trading system must find a balance between defence interests and the push for decarbonisation.

The G7’s latest critical minerals declaration sets an ambitious target: to reduce dependence on any single supplier outside the G7 and partner countries for rare earths and permanent magnets to below 60 per cent by 2030, and to 50 per cent thereafter.

On paper, this is a supply-chain resilience measure. In practice, it recognises that critical minerals are no longer ordinary commodities but instruments of national security, industrial policy, alliance management and geopolitical leverage. The target matters because it translates strategy into collective procurement, co-financing, standards and investment decisions.

Only a few years ago, price floors, stockpiling, demand aggregation and price-gap subsidies would have been dismissed as market interventions. China’s export controls have done what years of western policy papers could not: they have made interventionist industrial policy politically legitimate across the world’s most advanced economies.

That is the paradox Beijing now faces. Export controls strengthen China’s short-term bargaining power but also give the G7 the crisis narrative it needs to coordinate more seriously. The more China tightens the controls, the easier it becomes for western governments to justify the collective action Beijing hopes to deter.

The G7 target is a dependency-management strategy, not a realistic near-term pathway to a China-free supply chain. China’s advantage lies not simply in mining, but in the industrial ecosystem around critical minerals: separation,........

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