[Text/Observer Network Liu Chenghui] Rare earth control is widely regarded as China's "countermeasure ace" in its game with the US. According to a May 20 article by Hong Kong's English-language South China Morning Post, China holds an absolute dominant position in the supply chain of critical minerals such as rare earths, while the US lags behind China by 20 years in heavy rare earth separation and purification technology. Despite attempts by the US to摆脱 dependence on China through "mineral diplomacy" and other means, it will be difficult to shake China's position in the short term.
However, some industry analysts remind that China needs to remain vigilant while maintaining its advantages, strengthening basic research and talent cultivation to guard against long-term risks.
"China's control measures will not be relaxed."
The article states that although the US and China have reached an agreement to temporarily suspend the tariff war, China continues to strengthen control over the supply of key minerals such as rare earths, which can cut off the US's access at any time.
In mid-March, Hong Kong Customs broke up a major smuggling case involving strategic resources, intercepting 25 tons of antimony ingots disguised as ordinary medical equipment at a northern border cargo yard. The smugglers attempted to shield detection using aluminum foil and ship them to the US. Antimony is a rare metal used in advanced military equipment, and its exports have been strictly controlled by China since last year.
A few weeks later, Guangxi media also reported a similar incident. According to a "situation statement" released by Nanning Customs in Guangxi, on March 18, a company declared one shipment of solder paste bound for Thailand as per procedures. The outer packaging was labeled "low-temperature solder paste," and the inner packaging label showed "tin-bismuth alloy," with the purpose of electronic welding. After inspection and testing, it was found that the bismuth content in this batch of solder paste was 55.3%.
Although bismuth belongs to the nitrogen group elements and is not a rare earth element, according to relevant regulations, export licenses must be applied for from the management department to export this batch of bismuth-containing goods. Since the company could not provide the license, customs did not release it.
Chinese rare earth mine Visual China
The South China Morning Post believes that these cases indicate that global high-tech manufacturers, especially American manufacturers, are under immense pressure. In the trade war, China has restricted the export of key minerals, making strategic resources such as rare earths the most powerful leverage to counterbalance the US. Analysis shows that the US relies on about 70% of its rare earth imports from China. In recent months, China has included more than ten strategic minerals into export controls as a countermeasure to US tariffs.
Professor Wang Xiaosong of the School of Economics at Renmin University of China estimates that a single F-35 fighter jet consumes 417 kilograms of rare earth materials, and the Pentagon's strategic reserves of rare earth magnets for missile guidance systems are only enough to last 18 months. "In the dynamic trade tensions, rare earths have become a key variable. Strategic minerals are indeed crucial."
China's control measures have had a significant impact on the global market, with prices of some rare earth elements surging over 200%, reaching $3000 per kilogram.
American technology companies have also felt the impact. During the recent earnings conference call, Tesla CEO Elon Musk admitted that a shortage of rare earth magnets is affecting the company's humanoid robot development work.
Some companies have taken extreme measures to cope with the supply shortage. In internal documents seen by the South China Morning Post, an American manufacturer stated that its suppliers once attempted to transport rare earths out of China without the required export license, but at least one batch of goods was intercepted by Chinese authorities.
According to the agreement reached between China and the US in Geneva, China agreed to suspend "non-tariff countermeasures" after April 2, but actual control is still being strengthened.
It is worth noting that China's recent special operation to crack down on the smuggling and export of strategic minerals seems to suggest that future export controls will not easily ease.
On May 12, a spokesperson for China's Ministry of Commerce answered questions from reporters regarding related actions. Since China implemented export controls on some strategic minerals, some overseas entities have colluded with illegal personnel within the country to attempt to evade export control measures through smuggling and other means. To curb such trends, the National Office of the State Export Control Coordination Mechanism focused on cracking down on the smuggling of strategic minerals and held a field meeting in Shenzhen, Guangdong Province on May 9, making specific arrangements. There will be a series of actions organized recently.
"The US Abandons Critical Mineral Reserves, and China Accelerates Industrial Restructuring"
Analysts say that in the short term, the US can hardly counter China's sustained dominance in this key area.
Although China is far from being the only region with large rare earth reserves. Countries like Australia, Brazil, Chile, Indonesia, the Philippines, and even the US itself, have abundant rare earth mineral deposits.
However, China's ability to extract and process these minerals on a large scale is unique. According to a report released by the International Energy Agency last June, China accounts for 92% of global rare earth refining capacity.
In the US, the only major operating rare earth mine is the Mountain Pass Mine in California, which mainly produces light rare earth elements. Light rare earths are considered less valuable than the rarer and harder-to-extract heavy rare earths.
A report released last month by the Center for Strategic and International Studies in Washington stated that the US currently lacks domestic capability to separate heavy rare earths, which are particularly important for the aerospace and defense sectors.
"Only about 5% of the rare earth reserves at the Mountain Pass Mine are heavy rare earths," said Professor Wang Xiaosong. "The US is 20 years behind China in separation and purification technology."
Mountain Pass Rare Earth Mine in the US Visual China
China's dominant position in the rare earth supply chain has been established through decades of continuous policy-making.
Professor Song Feng, head of the Department of Energy Economics at the School of Applied Economics of Renmin University of China, said that after the end of the Cold War, the US abandoned the strategy of reserving critical minerals, whereas since 2011, China has carried out large-scale restructuring of the mining industry, imposing stricter control over mining and introducing tariffs and export quotas for key materials.
Researcher Chen Weiqiang from the Urban Environment Research Institute of the Chinese Academy of Sciences said that although the US has abundant mineral resources and channels to acquire resources from African, Oceanian, and Latin American countries, it has failed to establish processing capabilities. Part of the reason is environmental issues.
"Excessive development of financial capital, along with a series of so-called environmental protection regulations proposed by the US, squeezes the real manufacturing sector," he said. "This naturally leads to the loss of production capabilities for critical minerals and raw materials."
"Many mineral resource extraction operations, as well as metal separation and smelting in the US, cannot be carried out due to their enormous environmental and health costs."
"China Should Also Be Vigilant in Times of Peace"
Experts said that although the Trump administration elevated mineral security to the level of national strategy and introduced several executive orders to promote domestic production, even attempting to obtain Greenland's rare earth resources and reaching a rare earth agreement with Ukraine, Ukraine does not have processing capabilities. Establishing refining capabilities takes over a decade, and it also requires a stable external environment.
"If the US hopes to solve supply chain security issues through mineral diplomacy and build partnerships to replace procurement from China, it must provide a certain degree of financial or diplomatic support," said Hou Lei, a deputy researcher at the Institute of World Economy and Politics of the Chinese Academy of Social Sciences. "This is why China's irreplaceability will continue to exist in the short term."
At present, Trump has expanded the search for critical minerals to Africa and explored the potential "mineral-for-security" agreement with the Democratic Republic of Congo. Under the proposed arrangement, the US would use diplomatic and economic means to help achieve peace in exchange for the opportunity to obtain the country's mineral resources.
Chinese experts warned that such US initiatives may damage China's cooperation projects in mineral-rich regions such as Africa, increasing costs and risks for Chinese enterprises, although they do not pose a threat to China's position in the global critical mineral supply chain.
Experts said that China should ensure its leading position in this field by increasing investment in basic research, nurturing new talent, and fostering domestic mining giants.
"Of course, our position is not easy to shake in the short term," said Professor Wang Xiaosong. "But our rare earth industry must also be vigilant in times of peace."
This article is an exclusive contribution by Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7506326307081404955/
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