Chinese manufacturer Golden Dragon Rare Earth Co. Ltd. has initiated trial production at a new digital smart factory in Fujian province capable of producing 5,000 metric tons of high-performance magnetic materials per year, underscoring Beijing's strategic push to dominate advanced downstream tech applications as it tightens control over global rare earth processing.
Located in the Fujian (Longyan) Rare Earth Industrial Park in Changting County, the facility announced that it has completed core equipment installation and digital workshop calibration to begin trial runs. Designated as a 2026 Fujian provincial key project, the plant specializes in third-generation rare earth permanent magnets engineered for high-efficiency electric motors, new energy equipment, and automated manufacturing systems. Local development officials noted in local media that the facility is designed to close a key refining gap, establishing an end-to-end regional supply chain connecting raw rare earth oxides directly to finished magnetic components and motor manufacturing.
The factory's launch comes amid a broader structural realignment of China's rare earth trade. According to General Administration of Customs data released in September, Chinese rare earth exports dropped 18.2 percent year-over-year in August to 4,735 metric tons, while imports surged 36.8 percent to 6,862 metric tons. Despite falling export volumes, total Chinese export revenue for rare earths jumped 53.5 percent over the first eight months of 2026 as export restrictions on 12 medium and heavy rare earths drove global prices sharply higher.
The diverging trade figures could be seen as evidence of China's transition from an exporter of unrefined minerals to a dominant manufacturer of high-value finished hardware. China currently controls over 90 percent of global rare earth smelting and separation capacity. By importing raw ores from overseas mines while expanding domestic production of advanced components, such as neodymium iron boron magnets, which saw export volumes rise 30.3 percent through August, Beijing is conserving its domestic reserves while cementing its monopoly over global processing margins.
The expansion of domestic magnet manufacturing directly impacts Western efforts to decouple critical mineral supply chains. Under a July 2026 White House executive order, U.S. defense contractors are required to cease importing Chinese rare earth magnets by Jan. 1, 2027. However, with alternative separation and magnet fabrication capacity in the U.S. and allied nations facing multi-year development timelines, highly automated facilities like Golden Dragon's smart factory reinforce China's structural leverage over the global high-tech and defense supply chain.
