How to Build More Resilient Procurement Solutions for Foreign Trade Under Rare Earth Controls?

If you source automotive, machinery, or energy projects, recent developments regarding China's rare earth export management likely feature prominently on your risk list. As your trusted foreign trade supply chain partner, our role is precisely to help you shift from reactive responses to proactive management during such times.

For years, global manufacturing has relied on a stable, efficient, and highly cost-competitive rare earth supply system. However, the new policy landscape means that the traditional procurement model focused solely on “lower prices” may now need to incorporate considerations for “supply continuity” and “technology route risks.”

For both our organizations, this presents not only challenges but also opportunities to optimize collaboration models and deepen our partnership. Our shared goal is to build a more resilient supply system capable of withstanding fluctuations in any single market.

In response to this new landscape, we have swiftly adjusted our strategy, shifting our focus from order fulfillment to delivering forward-looking supply chain solutions.

1. For Automotive and Parts Procurement: Implementing “Technical Pathway Plan B” Drive motors, steering systems, and sensors for electric vehicles represent critical application areas. We are actively taking the following actions:

Solution: We have contacted and vetted a group of motor suppliers utilizing high-performance ferrite permanent magnet materials. While these motors may require slight adjustments in peak power output, they offer significant cost advantages and completely circumvent rare earth supply chain risks.

2. For Small Machinery Procurement: Initiating a “Core Component Supply Chain Review.” Servo motors and precision bearings used in CNC machine tools, air compressors, and automation equipment may contain rare earth materials. We recommend:

Conducting Supply Chain Transparency Investigations: We can assist you in tracing the core components within your procured machinery to identify their material risk levels.

Provide certified “green” alternatives: We are introducing rigorously tested brands and products explicitly labeled as using non-rare-earth technologies or sourced from diversified supply chains for your selection.

3. For energy project procurement: Evaluate “advantages and disadvantages of different technology pathways.” Wind power generation (especially direct-drive permanent magnet turbines) and high-efficiency energy-saving motors are major consumers of rare earths. We offer pathway options:

Path (Non-Rare Earth Technology): Recommend wind turbines utilizing electromagnetically excited technology. This is a mature, reliable, and traditional technology that completely avoids rare earth risks.

We suggest incorporating the following approaches into your procurement decisions:

Establish a “Supplier Risk Tiering” system: Conduct risk assessments and implement tiered management based on suppliers' reliance on critical raw materials for their products.

Implement “Core Component Alternatives” (Multi-sourcing): For critical materials or components potentially involving rare earths, always maintain at least one alternative supplier with different technical or geographic origins.

Conduct “Value Engineering” Analysis: Collaborate with us to re-evaluate product designs and explore new balances between performance, cost, and supply security.

The global trade landscape remains volatile, yet true partnerships are strengthened and deepened through navigating such shifts. We commit to serving as an extension of your vision, continuously monitoring policy and market trends to identify and deliver secure, reliable procurement solutions.