[Source/Observer Network Qi Qian] The measures taken by China to control the export of rare earths are in line with international practices and are not targeted at any specific country. However, as the impact of the controls becomes apparent, Western companies such as the US have encountered production disruptions, and some Western media have begun hyping up the so-called "weaponization of rare earths."
On June 6, Reuters cited analysis suggesting that rare earths have become a "better and more targeted weapon" for China in its trade war, with this strategy mimicking the US's long-standing export control policies targeting China. Meanwhile, companies in the US and other Western countries are concerned that China's export licensing system will make the global rare earth supply chain transparent to China.
In April this year, after former US President Donald Trump imposed high tariffs on China, China quickly retaliated, including imposing export controls on a series of critical minerals and rare earth magnets. Industry insiders revealed that China is establishing an export licensing system.
Reuters reported recently that with the introduction of export control policies, China has introduced a tracking system for the rare earth magnet industry. Sources familiar with the matter said that China's tracking system came into effect last week—requiring producers to submit additional information online, including transaction volume and customer names.
"This shows that China has designed a better and more targeted weapon for the trade war," the report stated, with industry executives and analysts indicating that there are signs that China will approve more exports but will not abandon this system. China's export license system imitates that of the US, allowing it unprecedented insight into supplier bottlenecks in areas ranging from electric vehicle motors to missile guidance systems.
Zhu Junwei, a scholar at the Beijing-based international relations think tank Guan Guan Think Tank, stated: "China initially drew inspiration from the US's comprehensive sanctions regime. Since then, China has been striving to establish its own export control system as a last resort."
Rare Earth Mines in China Visual China
In the past 30 years, China has maintained dominance in the mining and refining of rare earths.
According to data from the International Energy Agency, in 2023, China accounted for over 60% of global rare earth ore production, but its control over the processing stage accounts for 92% of global production, nearly monopolizing the global rare earth processing sector. The US Geological Survey also stated that between 2020 and 2023, 70% of the US imports of rare earth compounds and metals came from China.
China accounts for over 60% of global rare earth production and 92% of refined supply. US Media Graphic
Reuters noted that during Trump's first term, China began building its own sanctions capabilities while investing billions of dollars to develop countermeasures against US policies. In 2022, the Biden administration imposed export controls on Chinese chips, but analysts said this move failed to prevent China from developing advanced chips and artificial intelligence.
The implementation of China's rare earth magnet export controls has raised concerns among global automakers about potential production delays and disruptions. The report stated that this week, several European automotive suppliers shut down their production lines due to depleted inventories. Some enterprises complained that the speed of approving export licenses was too slow.
Noah Barkey, a senior advisor at the US think tank Rhodium Group, speculated: "The speed of approval is a very clear signal that China is sending messages and exerting pressure to prevent further negotiations with the US from leading to new technology control measures."
Meanwhile, executives from European and American companies warned that even if China accelerates the approval process in the future, this new export control system will allow China unprecedented insight into the global rare earth supply chain, including how companies deploy their processed rare earths. Due to the complexity of the supply chain, other governments cannot gain such insights.
The report gave an example: A lobbyist representing Japanese suppliers said it was believed that hundreds of Japanese suppliers need China to approve rare earth magnet export licenses in the coming weeks to avoid production disruptions.
In addition, analysts face the daunting task of tracking China's approval speed. Corey Combs, a key mineral analyst at Strategy&Consulting, said: "It is almost impossible to know how many applications have been approved because the data is not publicly available, and companies do not want to confirm this publicly."
"China is sharpening the scalpel," said an anonymous executive from an American company. "This is not just a way to monitor the export of magnets; it is a way for China to exert influence and gain an advantage over the US."
After the phone call between the leaders of China and the US, Trump posted: "There should no longer be any doubt about the complexity of rare earth products." However, the message released by China did not mention rare earths. For this, Foreign Ministry spokesperson Lin Jian said on June 6 that China has repeatedly expressed its position on relevant issues. Specific situations can be inquired from the competent authorities of China.
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Original source: https://www.toutiao.com/article/7513039593621471784/
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