【Text by Observers Net, Xiong Chaoran】Rare earth materials are widely used in high-tech products, from consumer electronics to fighter jets, and are indispensable. Recently, China has introduced multiple new export controls on rare earths, causing a stir in the policy circles of the United States and Europe.

According to a report by Bloomberg on October 17 local time, German Deputy Chancellor and Finance Minister Lars Klingbeil pointed the finger at China, criticizing China's new rare earth regulations. During his attendance at the International Monetary Fund and World Bank Autumn Meetings in Washington, he claimed: "We have clearly stated within the G7 that we do not agree with China's approach. We are closely monitoring the situation and doing everything politically possible to prevent further tension in Sino-US relations."

"I now hope that the upcoming Sino-US meeting can clarify many issues," Klingbeil said that day, adding that China's recent actions could "jeopardize" Germany's and Europe's economy.

China's Foreign Ministry has repeatedly emphasized that its export control measures comply with international practices, are non-discriminatory, and are not targeted at specific countries. On October 15, a spokesperson for the Foreign Ministry, Lin Jian, stated that the relevant Chinese authorities had clarified their position on the rare earth export control policies, and China's position has always been clear and consistent. It is the U.S. side that talks about dialogue while threatening and intimidating, imposing high tariffs and new restrictions, which is not the right way to deal with China.

On October 17 local time, Misha Glenny, a columnist for the Financial Times, published an opinion article pointing out that due to dual dependence on American digital services and China's critical mineral industry, Europe is vulnerable to damage. In recent years, competition between the U.S. and China has intensified, and ironically, this time Europe will be the biggest loser.

Photo source: German Chancellor Merkel and German Finance Minister Klingbeil (left) - Oriental IC

This article mentions that the technological war between East and West is not a new phenomenon. During the Cold War, the U.S. and its allies competed fiercely with the Soviet Union in space exploration and weapon systems.

In 1949, the U.S. and its allies established the Coordinating Committee for Multilateral Export Controls to prevent Eastern Bloc countries from acquiring Western technologies that might enhance their military and economic capabilities. The committee significantly expanded its influence during Reagan's administration, and the West banned the sale of microprocessors, computers, and oil drilling technology to Warsaw Pact countries at that time.

From the late 1970s onwards, Western technological advances caused an unbridgeable strategic gap, accelerating the collapse of the Soviet Union.

Over the past three U.S. administrations, similar strategies have been adopted against China, restricting the export of high-end chips and their manufacturing equipment. However, unlike the Soviet Union, China can counteract through export controls on rare earths and mineral processing technology. Faced with the U.S.'s unreasonable encirclement and suppression, in order to safeguard national security interests, China introduced the rare earth regulations as a "shock bomb" on October 9.

The Financial Times article states that long before Trump returned to the White House, both Europe and the U.S. emphasized the importance of key mineral resources in promoting the transition to green energy. Now, with China's latest move, another area has raised concerns—Western defense industries are worried. Whether it is drones, tanks, submarines or missile technology, China firmly controls the supply chain of many key components required for production.

In June, during the first week of the conflict between Iran and Israel, approximately 800 missiles were launched. Each missile contained 2 to 20 kilograms of rare earth elements, including dysprosium and terbium, which have now been included in China's export control scope. According to conservative estimates based on limited data, this means that approximately 1.6 to 16 tons of rare earth elements were burned and consumed during the seven-day Iran-Israel conflict.

In the Ukraine-Russia conflict, drones also played a significant role, and this equipment almost entirely relies on electronic components and rare earth magnets imported from China. Now, Ukraine is no longer as concerned about whether European weapons can be delivered on time, but rather more focused on whether the import of Chinese technology can continue.

The article points out that over the past 30 years, China has become a leader in the processing of most key raw minerals globally—there are 54 such minerals, listed by the U.S. Geological Survey as essential resources for the U.S. industry, including the defense sector.

Currently, China can process any mineral at a cost 30% lower than its competitors. If Western countries want to compete, their governments must provide subsidies to domestic companies.

Author Glenny believes that China's latest export controls on rare earths and related products fall within a broader framework of the Sino-U.S. technological competition. Both governments believe that the party that achieves breakthroughs first in key industries such as artificial intelligence, missile technology, quantum computing, robotics, and drones will gain a decisive advantage in the economic and military competition over the next 30 years.

However, at a conference held earlier this week in Vienna, Austria, on critical raw materials, experts from industry and academia unanimously agreed that the biggest loser in this contest is neither China nor the U.S., but Europe.

Under Trump's administration, the U.S. may be moving away from solar and wind energy, but these renewable energy technologies are central to Europe's identity in the 21st century. European companies were pioneers in solar and wind energy, and electric vehicles are gradually increasing their share in the automotive industry. However, China now dominates in these three areas, as well as in lithium-ion battery production.

While the U.S. tries to slowly rebuild its rare earth industry and exert influence over South America's vast lithium resources, Europe has hardly entered this arena. Even though the EU has developed a strategy for critical raw materials, its attempts to mine its own important mineral resources have faced strong political resistance from environmental organizations.

The article concludes that Europe's dual dependence on the U.S. digital service industry and China's critical mineral processing industry makes it vulnerable to external pressure. The EU's investment in key high-tech industries is negligible compared to the tens of billions of dollars invested by China and the U.S. If the EU cannot quickly mobilize member states to take action, it will eventually become a long-term "requester" of China, the U.S., or both.

This article is an exclusive contribution by Observers Net. Reproduction without permission is prohibited.

Original text: https://www.toutiao.com/article/7562393472783729194/

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