China's Rare Earth Dominance Faces Technology Gap as US, Japan Lead in Key Patents

China's dominance in the global rare earth industry conceals a key structural weakness, with the United States and Japan holding many of the core patents for advanced rare earth functional materials , according to a study cited by the South China Morning Post.

The study found that while China accounts for around 70% of global rare earth mining and nearly 90% of processing capacity , it continues to lag in several high-value downstream technologies. Rare earth elements are critical for defence systems, electric vehicles, smartphones, satellites and other advanced technologies , making them central to global supply chains and strategic competition.

Researchers said Japan leads in permanent magnet technologies , while the US dominates core technologies for catalytic, luminescent and polishing materials. These downstream products represent more than 80% of rare earth-related patents worldwide and are the industry's most commercially valuable applications.

The report noted that China's strength in raw material production has not translated into comparable leadership in advanced technologies. Although the country files a large number of patents, relatively few are high-value international patents with broad commercial influence. It also cited weak coordination between academia, industry and intellectual property management as limiting the commercialisation of scientific research.

The findings come as China has tightened export controls on several rare earth products in recent years, disrupting supply chains in India, Japan and Europe. The researchers called for targeted research, stronger industry-academia collaboration and greater innovation to help China close technological gaps and strengthen its position in high-value rare earth technologies.