Reconstructing the industrial value chain is a strategic decision for China to overcome the challenges posed by the western rare earth supply chain restruction and the capture of low-end value from the perspective of “dual circulation” strategy.By examining the structural changes in both internal and external value chains，this paper analyzed the logical differences in the development of rare earth industry under the “external circulation” and “dual circulation” patterns. Furthermore， the study utilized the export technical complexity and DEA-Malmquist index to assess the global value chain position and domestic development level of China’s rare earth industry. Ultimately， the research delves into the potential strategies for the reconstruction of the internal value chain within this industry.The findings indicate that China’s rare earth industry is vulnerable to risks such as external “decoupling”，constraints associated with “low-end locking”，and challenges stemming from internal competition among homogeneous enterprises under the prevailing influence of “external circulation”.In accordance with the “double cycle” model， China’s rare earth industry is anticipated to transition from a strategy of consolidation to one of integration，thereby bolstering the resilience and risk mitigation capabilities of the rare earth supply chain. Additionally，China’s prominent position within the global rare earth value chain has consistently remained strong，with overall improvements in the efficiency of domestic industry operations.However，further optimization of the scale structure within downstream segments is deemed necessary. In order to address the significant shifts in the global rare earth supply chain，it is imperative for China to develop its domestic rare earth industry value chain through advancements across the entire industry value chain and facilitate regional and industrial advancements.This can be achieved by implementing a dual strategy that involves leveraging expertise from the upper echelons of the value chain and market insights from the lower end to establish dominance in the regional rare earth industry value chain.Ultimately，the integration of these two chains will contribute to the reconfiguration of the global rare earth industry landscape.

http://www.goldsci.ac.cn/article/2024/1005-2518/1005-2518-2024-32-4-704.shtml