**Introduction** Reliance on China for critical minerals exposes other countries’ key industries to supply chain disruption, cost instability, and strategic vulnerability. China’s dominance in the processing and refining stages of many critical mineral value chains means that policy shifts, export restrictions, or operational disruptions can quickly affect downstream manufacturing. These risks increasingly influence industrial policy, investment decisions, and supply-chain design[1][2]. **Key industry risks from dependence on China** **1.** **Disruption risk from concentration in mineral processing and refining** Many critical minerals are mined across multiple countries, yet processing and refining capacity is concentrated in a small number of locations. China accounts for the largest share of global capacity for lithium chemicals, graphite, rare earth separation, and several battery materials. This concentration creates single-point failure risks for downstream industries when exports are restricted, approvals are delayed, or logistics are disrupted. Electric vehicles, wind turbines, electronics, and defense-related manufacturing are particularly exposed, as qualified substitutes for processed inputs are limited in the short term[1]. **2.** **Cost volatility transmitted to downstream manufacturing** Concentrated supply structures increase exposure to price volatility and availability shocks when export controls, licensing requirements, or domestic policy priorities affect supply. The use of export restrictions on industrial raw materials has expanded and intensified, amplifying price movements and raising input costs for manufacturers outside China[3]. These cost shocks weaken competitiveness in clean energy equipment, batteries, and advanced manufacturing, especially in sectors where margins are tight and contracts provide limited price protection[2][3]. **3.** **Investment risk for clean energy and advanced manufacturing** Battery production, power electronics, and semiconductor-related manufacturing require large investments and reliable access to key inputs. Dependence on a concentrated and policy-sensitive mineral supply increases investment risk, raising financing costs and slowing the pace of new capacity[2]. Firms and governments therefore take mineral supply into account when making location, sourcing, and industrial planning decisions, even when this leads to higher costs or less efficient outcomes[1][4]. **Conclusion** Reliance on China for critical minerals increases exposure to supply disruption, cost volatility, and investment risk in key industries. These risks are most visible in clean energy, electronics, and other advanced manufacturing sectors with limited short-term alternatives. Addressing these vulnerabilities has become a growing focus of industrial and economic security policy, with greater attention to diversification and supply stability.
