China Power | Economy | East Asia

Not Just Rare Earths – Is This China’s Next Economic Weapon?

China’s dominance in the entire fluorine value chain is an overlooked source of geopolitical leverage.

The global debate surrounding critical minerals – and the geopolitical race to secure access to these materials – has thus far largely centered on a familiar group of resources. In recent years, rare earths, graphite, and lithium have arguably become synonymous with strategic competition as governments seek to diversify supply chains and reduce dependence on Chinese production. 

However, this predominant focus on upstream mining risks overlooking a quieter but potentially more consequential source of geopolitical leverage. Today, strategic advantage puts a heavy emphasis on a state’s ability to control the industrial ecosystems that transform those minerals into indispensable technologies. A lesser-known example is the fluorine economy.

Although fluorite is often regarded as a relatively obscure industrial mineral, its strategic importance lies in the fluorine chemicals and compounds it derives. Fluorite is the primary precursor for many industrial compounds and chemicals, including fluorine and fluorine chemicals. As an indispensable raw material, fluorite is the bedrock of an extensive range of advanced applications, from metallurgical processing and electric vehicle batteries to aerospace engineering, nuclear energy production, and semiconductor manufacturing. Almost every high-tech industry crucial to economic and national security is underpinned by fluorine-derived materials. 

With the world’s largest reserves, China is currently the top producer, accounting for around 69 percent of global fluorite production, with an estimated output amounting to 6 million metric tons in 2025. However, these figures capture only the upstream dimension of China’s competitive position.

Unlike many mineral-producing economies that primarily export raw ore, China has systematically expanded its downstream processing and manufacturing capacity. Chinese producers dominate multiple stages of the fluorine value chain, accounting for over 50 percent of global production of high-purity hydrofluoric acid, nitrogen trifluoride, fluoropolymers and numerous specialty fluorochemicals. This dominance in purification is where China gains its most strategic advantage – these downstream products require extremely high purity standards before they can be deployed in semiconductors, batteries or advanced manufacturing. As deposits are not limited to Chinese land, mastering the industrial capabilities to transform fluorite into technologically indispensable materials becomes what matters most. 

The Potential for Economic Statecraft 

Over the past decades, Beijing has quietly developed a vertically integrated fluorine economy while simultaneously constructing an increasingly comprehensive export control regime to govern its strategic assets, including fluorite. This architecture reflects a deeper ambition of China’s industrial policy: rather than simply relying on its natural advantages as an upstream miner with large critical mineral deposits, Beijing has consistently pursued the development of a highly interconnected and complete supply chain that would be extremely difficult for other countries to replicate. Once we consider fluorine’s downstream applications, the strategic significance of this ecosystem becomes more apparent. 

The manufacturing of all advanced semiconductors requires hydrofluoric acid. During wafer fabrication, electronic-grade hydrofluoric acid is repeatedly used to remove silicon dioxide layers and etch microscopic circuit patterns onto silicon wafers. Companies such as TSMC, whose advanced chips underpin artificial intelligence, cloud computing and consumer electronics, depend on a continuous supply of ultra-high-purity process-fluorine chemicals alongside the more famous cutting-edge lithography equipment. In this sense, the semiconductor race is determined as much by access to advanced machinery as by access to the specialized chemical ecosystem that enables precision manufacturing.

Beyond semiconductors, fluorine chemicals are foundational to multiple sectors pivotal to national security. Uranium enrichment depends upon uranium hexafluoride, a fluorine compound. Fluoropolymers such as PTFE and PVDF are indispensable in aerospace engineering, chemical processing equipment, and advanced electronics because of their exceptional resistance to heat, corrosion and chemically........

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