Amid intensifying great-power competition over critical minerals, rare earth elements have become increasingly significant as strategic resources. In recent years, drawing on its structural advantages in the rare earth industry while responding to growing external constraints, China has gradually strengthened its rare earth export controls, attracting widespread international attention regarding the motivations and implications of these policies. Taking rare earth export controls as the analytical entry point, this study develops a Structure–Mechanism– Outcome framework to examine the policy logic underlying these measures from the dual perspective of structural advantages and constraints. The study finds that China’s tightening of rare earth export controls since 2023 should not be understood as a short-term retaliatory measure, but rather as an economic statecraft practice characterized by institutionalization and a defensive orientation, rooted in China’s structural advantages in the rare earth supply chain. Institutionalization is reflected in cross-ministerial coordination and the expansion of control targets from raw materials to technologies and key segments of the supply chain. The defensive orientation is manifested in the use of rule-based policy instruments—such as export licensing and control lists—to manage the cross-border flow of rare earth resources rather than imposing comprehensive trade restrictions. This analysis contributes to a deeper understanding of the policy logic and broader implications of critical mineral governance in the context of great-power competition.