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At the third annual Chinese Summit on Rare Earths earlier this month in Lanzhou, not one speaker mentioned Honda’s breakthrough: a heavy rare-earth-free magnet. They apparently missed the big news, which according to the , would allow Japan to cut its reliance on China’s rare earths.

The reason is Beijing doesn’t care about losing potential sales of kilograms of rare earths. Chinese scientists are too busy identifying new uses for the materials.

While Japanese, European and American scientists focus research on replacing rare earths in products like magnets, China’s researchers are trying to use their abundant resources everywhere they can (even identifying how to replace imported rubber with them.)

Beijing policymakers see rare earths, and indeed a slew of rare metals, as critical to their new industrial strategy, Made in China 2025. Policymakers no longer want the nation’s factories to just assemble phones, computers and airplanes. They want companies to make every internal component for those products as well. This is where rare earths come in.

They are at the heart of these components because these materials perform critical functions — like brilliant illumination and magnetism.

Beijing is pouring research dollars, subsidies and people, and I mean thousands and thousands of scientists, into the resource industry.  It wants to use the best materials to make the critical components for our wind turbines and jet engines. 

Elsewhere, as in the US, limited research dollars are going into finding replacements for rare earths, which are still mined and produced almost exclusively in China. While it’s possible to find substitutes for many rare metals it’s a tall task indeed. 

Just ask Bill McCallum, a scientist at Iowa’s Ames Lab. He’s been working to replace a less common rare earth for a more common one in magnets. But at best, he told me, even if every member of his team received “one miracle” they would succeed in making a less effective magnet than the original.  This decision of companies to use a second-best technology option for fears over geopolitical disruptions in supplies is what Michael Silver, CEO of American Elements, calls “innovation distortion.” 

So while some in the media congratulate Honda’s cracking the code to produce a type of magnet without heavy rare earths—mind you, it still uses light rare earths—we must realize that such “innovation distortion” may be sacrificing bigger potential breakthroughs. With relatively few people experimenting with rare earths in labs in the West, and those who do, are focused on replacement, future critical material science breakthroughs, and the spoils from them, are increasingly more likely to come from Baotou than Boston.