GEOECONOMIC SHOCKS AND GLOBAL SUPPLY CHAINS: MARKET LEVEL EFFECTS OF CHINA'S CRITICAL MINERAL POLICIES

China's growing use of export controls on critical minerals raises questions about how concentrated international supply chains respond to geoeconomic shocks. This paper asks whether countries more dependent on China experience larger changes in import sourcing following China's export control measures on gallium and germanium (2023), graphite (2023), antimony (2024) and medium/heavy rare earths (2025), against the backdrop of the 2010–2012 rare earth episode and WTO dispute DS431. Using a constructed country mineral month panel of 18,944 observations across 74 reporting countries, four mineral groups and 96 months (January 2018 to July 2026), drawn from the UN Comtrade database, the analysis combines pre-treatment (2018–2022) China import dependence with event specific difference in differences and event study specifications.
Countries with greater pre-shock dependence on China experienced significantly larger reductions in China origin imports following the relevant export control events (pooled β = −2.61, SE = 0.54, p < 0.001), the paper's clearest result. Responses in alternative supplier networks were heterogeneous rather than universal. Non-China supplier counts rose significantly for antimony and graphite but not for gallium/germanium or rare earths, and non-China supplier concentration (HHI) showed no statistically significant systematic decline for any mineral group, so a reduction in China origin sourcing should not be equated with genuine diversification or resilience. Evidence from import unit values, a noisy proxy for market prices, does not consistently support a general price effect.
The findings support a narrower claim than universal price weaponisation or chokepoint amplification. Concentrated physical supply chains transmit policy shocks through pre-existing trade network exposure, with the strength and shape of that transmission varying by mineral. The paper situates this market level design within a broader multi-level framework linking policy shocks to firm and state responses, a direction left for future research.