On October 16, the G7 finance ministers and central bank governors met in Washington, D.C.
U.S. Treasury Secretary Bescent said: "We will talk to European allies, Australian, Canadian, Indian and other Asian * countries, and there will be a comprehensive collective response to this. China cannot manage supply chains or manufacturing processes for the rest of the world."
Cold sweat and private sweat.
A huge sense of insecurity is wrapping up in the head of the G7. Recently, the conference rooms in Washington and Brussels have been lighted and the atmosphere is unusually tense.
Earlier on October 14, the EU held an emergency consultation meeting with the G7 and then on October 16, the G7 and EU finance ministers and central bank governors met again in Washington.
Senior officials from a total of 31 countries have repeatedly discussed the same thing: China's decision to tighten export controls on rare earth-related products.
The new rule is set to come into effect in October, despite the Chinese Ministry of Commerce’s explanation that it’s not a “prohibition” but an institutionalized resource management, and the Ministry of Foreign Affairs’ stress that the measures are in line with the WTO rules and are not targeted at specific countries.
But this series of actions undoubtedly deeply stung the nerves of the West.
In the face of this sudden supply chain variable, the first reaction of Europe and Japan was surprisingly consistent—not to seek independent autonomy, but to rely more closely on the United States, which is why?
Behind this lies a profound "reaction dilemma": when the identity of maintaining hegemonic order encounters the reality of the supply chain where key resources are being manipulated, their choices are in fact already doomed.
At first glance, the reaction of the western world is a huge political show with the same enemy.
U.S. official Bescent raised his arms at the Washington meeting, declaring that China "cannot manage the supply chain for the world." He planned to connect Europe, Australia, India and other "* countries" in series to form a powerful "collective response."
It was like lighting up the line, and the parties immediately followed.
Far away in Europe, British Finance Minister Reeves outraged China’s move as a “very bad decision” and “extremely dangerous” for the global economy.
Japan's Chief Cabinet Secretary Katsumu Kato expressed "strong concerns" and called on the G7 to unite.
The Canadian Minister of Commerce, Peng Fei, also revealed that the G7 has specifically discussed the problem of rare earth and "has the response."
However, this rehearsed tough stance can't hide their deep anxiety at all. The camera turns to the closed-door consultation meeting of the European Union in Brussels, and the atmosphere completely changes.
EU Commissioner Shevchenko said: “Europe feels the threat of being stabbed to its throat.”
He said Europe must immediately assess its “strategic vulnerabilities” and “do not rule out any options” on the table, even suggesting possible countermeasures.
This panic is not an empty wind.
Germany's media has bluntly commented on the fact that Europe's energy transition has been progressing rapidly over the years, but has completely ignored the resource layout behind it, which is now a bitter fruit.
An internal assessment by the European Commission has also given cold figures: if the supply of rare earth from China continues to be limited, the capacity of key industries in Europe could fall by more than 30 percent in just six months.
Rare-earth futures prices on the London metal exchange are rising, and the markets have given the most honest response.
In this seemingly unified gesture of politics, the role of the United States is also playful.
They advocate renewed pressure from the "collective West", reminiscent of the Biden-era strategy aimed at repairing alliances damaged by tariffs.
But they would rather like the EU to move ahead and coordinate behind the scenes, which makes the so-called “consensual action” filled with subtle interest calculations, far from a piece of iron.
When the “hegemony mind” hits the “capacity shortage”
To understand why Europe and Japan rely so much on the United States, we must understand their deep self-positioning.
In the eyes of the political elite of these countries, they are never a neutral third party in the game of China and the United States, but the “skeleton” and “core members” of the existing international order with the United States at its core.
Subconsciously, maintaining this system is maintaining their own interests, so any behavior that challenges the existing order will be regarded as a direct provocation to themselves.
China's rare earth control is precisely interpreted as such a challenge.
This inspired their instinctive reaction as “hegemonist defenders” and must show uncompromising hardness.
However, this arrogance in identity perception has formed a dazzling conflict with their serious shortcomings in reality capabilities.
Let’s look at the brutal reality: China controls more than 80% of the world’s rare earth output, and is a real “strategic resource dominant” while the Western so-called “diversification of supply” is more like a distant dream.
Although Australia has rich mineral resources, it is stuck in the process of refining and purifying, and there are minerals that cannot become the "vitamins" needed by the high-tech industry.
The situation on the U.S. side is more embarrassing, although they hand-held technology, but the domestic rare earth industry has long been suppressed, the supply chain has been seriously empty, want to rebuild, not only expensive, but also far from insufficient own reserves.
As for Europe, most of the relevant schemes are still at the theoretical stage of armchair strategist.
A French scholar's comment was the finishing touch: "You can say all you can say, but you can't go and mine China's minerals by yourself."
What can best reflect this trouble is an ironic scene: when Western politicians meet and condemn the so-called “armedization of resources,” large enterprises from Japan, South Korea and the United States are in real-world line-up, waiting for relevant Chinese authorities to approve their export permits.
The arrogance of identity and the dependence of reality formed the most direct collision at this moment.
Better old hegemony than new troubled times
On the surface, this game about rare earths is an economic and industrial security issue, but it is actually a world outlook conflict about the future world order.
Western countries' fierce reaction to China's move stems from a deep fear: they regard this as China's move to promote the construction of a "multipolar" world order, and a "multipolar" world is precisely the future they don't want to see.
In the vast majority of developing countries, “multipolarity” represents equality of power and opportunity, and the hope of breaking the old pattern of injustice.
But in the eyes of the developed countries represented by the G7, “multipolarity” is about the same as “chaos” and “disorder.”
They believe that today's world in the comprehensive national force, only the United States and China are far ahead, forming factual two poles, other countries can not become a truly independent "one pole".
Therefore, the "multipolarization" promoted by China, in their view, is only a political propaganda that disrupts the existing order.
There is a clear order of their inner preferences for the future world order: maintaining U.S. unipolar hegemony is the best policy, the next best choice is to accept the bipolar pattern, and "multipolarity" is the worst outcome that must be avoided.
China’s rise is seen as a catalyst for this “chaotic future.”
The clear contrast with this is China's own position on this issue.
China declared that export control is in order to institutionalize management, optimize resource allocation, and also to "release space" for the autonomy of the domestic high-end manufacturing industry chain.
This is a defensive measure that serves internal circulation and industrial upgrading, rather than a geoeconomic weapon interpreted by the West.
The fundamental differences in strategic intentions and world views between the two sides determined that this dialogue was consistent from the beginning.
conclusion
So, the answer is clear. Faced with a "multi-polar" future that cannot become one of the "poles" themselves, the bottom line thinking of developed countries such as Europe and Japan is to choose to "unite closely under the command of the United States and carry out a new cold war" without hesitation.
The measures they have announced, such as the establishment of a “strategic reserve mechanism” and the promotion of investment projects in Africa and Australia, are more of a long-term layout to serve this ultimate geopolitical goal than a solution to the imminent supply crisis.
Between short-term economic interests and long-term security hegemony, they eventually chose the latter, even if it meant to tie their supply chains more firmly to the uncertainty of the United States.
This is a helpless choice and a path dependence rooted in history and identity.