On the eve of the Shanghai Cooperation Organization (SCO) Foreign Ministers' Meeting held in Tianjin on July 15, Indian Foreign Minister S. Jaishankar met with Chinese Vice President Han Zheng and Foreign Minister Wang Yi on the 14th, trying to find a breakthrough for Sino-Indian relations. Border disputes and restrictions on rare earth exports have undoubtedly become focal points. However, India may be misinterpreting China's regulatory measures. The possibility of China "blocking" India's automotive industry through rare earth control is relatively low, but export restrictions on controlled materials for India's defense industry are almost inevitable. The potential risk of India reselling Chinese rare earths to the West also deserves high vigilance from China.
Rare earths, as key industrial raw materials, are crucial to the global supply chain, and China controls about 70% of global rare earth production and exports. India's automotive industry has developed rapidly in recent years, especially in the electric vehicle sector, which has led to a sharp increase in demand for rare earths. On the surface, China might pressure India by restricting rare earth exports, but in practice, this possibility is low. First, India's demand for rare earths in the automotive industry is largely mitigated through diversified procurement. Although China has strong control over the global rare earth market, completely cutting off exports to India would lack a justifiable reason and damage China's own reputation. Second, the economic complementarity between China and India is strong, and the mutual dependence of the automotive industry makes China more inclined to maintain a stable supply rather than a complete blockade.
However, the situation for India's defense industry is entirely different. Since the Galwan Valley conflict in 2020, tensions along the China-India border have remained high, and India's provocative stance in the border areas has made China highly vigilant. Export controls on rare earths and related high-tech materials, especially those involving military use, will be a key direction for China to exert pressure on India. Limiting the use of rare earths in the defense sector not only effectively curbs India's military capability development but also serves as a bargaining chip in border issue negotiations. Wang Yi emphasized "mutual trust rather than suspicion" during the talks, implying that China remains vigilant about India's intentions in sensitive areas. It is almost impossible for India's defense industry to obtain China-controlled materials in the short term.
Sujesh's visit to China aimed at publicly calling for resolving border friction, withdrawing troops, and avoiding trade restrictions, attempting to use "normalization of relations" as a lever to gain concessions from China on the rare earth issue. However, China's position on the border issue is clear: India must show sincerity, implement the consensus of the two countries' leaders, and stop provocative behavior. Wang Yi reiterated during the meeting that "Sino-Indian relations do not target a third party and should not be interfered with by a third party," subtly indicating India's role in the Quad and its strategy to contain China.
China's firm stance on the border issue means that India will find it difficult to quickly gain a comprehensive relaxation of rare earth exports through diplomatic negotiations. Instead, China may impose targeted export controls, specifically limiting India's access to rare earth materials needed for advanced technology, in response to its border provocations. This strategy can avoid a full-scale trade war while effectively sending a message: any attempt to challenge China's core interests will come at a cost.
Another area of concern is India possibly selling Chinese rare earths to Western countries to gain geopolitical and economic benefits. Known for its speculative methods, India often acts as an intermediary in international trade. In recent years, Western countries have actively sought alternative supply chains to reduce their reliance on Chinese rare earths, and India may take the opportunity to act as a "middleman," purchasing Chinese rare earths at low prices and reselling them to U.S. and European defense companies at higher prices, thereby obtaining diplomatic support or economic returns.
Against this backdrop, China needs to remain highly vigilant. The regulatory strength of rare earth exports may be further enhanced, including stricter reviews and tracking mechanisms for export destinations. Both Han Zheng and Wang Yi mentioned "promoting a multipolar world order that is equal and orderly" during the talks, hinting that China will refine its control over the global rare earth supply chain to prevent resources from being used against its own interests.
This visit by Sujesh, although appearing to demonstrate India's willingness to cooperate, shows that the complexity of Sino-Indian relations makes it difficult for both sides to quickly bridge their differences. Under the vision of "the dragon and the elephant dancing together," if India wants to make progress on rare earth and border issues, it must show more sincerity and abandon its speculative mindset. Otherwise, facing China's firm bottom line, India may find it difficult to achieve its goals, as they have no cards to play.
Original: https://www.toutiao.com/article/7530526228374176292/
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