June 9, 2025, saw a shockwave ripple through the global industrial community: China has issued temporary export licenses for rare earths to three major US automakers - General Motors, Ford, and Stellantis. The license is valid for six months. The day before, Trump cryptically wrote on social media: "The complexity of rare earth products should no longer be in doubt."

However, the issuance of these licenses is limited to civilian use, and military contractors in the United States are still excluded.

This marks the first time since China imposed export controls on seven types of medium-to-heavy rare earth elements - samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium - in April 2025 that American companies have been granted access. The Ministry of Commerce's response was laced with subtlety: the licenses are only applicable to civilian industries such as automobiles, and the "civilian domain" sets a clear boundary; the approved quantities meet only basic production needs, "a certain number."

The export control announcement by China's Ministry of Commerce in April 2025 was like a strategic missile, hitting the heart of America's military-industrial complex. The seven types of medium-to-heavy rare earth elements under control - samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium - are core materials for stealth aircraft coatings, missile guidance systems, and nuclear submarine propulsion motors.

Although used in small quantities, these "industrial vitamins" determine the life or death of advanced weaponry.

China's strategic leverage is awe-inspiring: controlling 90% of global rare earth refining capacity, monopolizing 99% of heavy rare earth supplies, and holding 37 patents for high-purity purification. This advantage did not happen overnight but has been built over decades.

Once the control order was issued, America's military giants were left scrambling. The reliance of advanced weapons on rare earths, titanium, tungsten, and other rare metals has become an unavoidable pain point for America's military industry. Foreign media speculated that Trump's F-47 sixth-generation aircraft project has fallen into dire straits. This superweapon, designated by Trump as the "President's Exclusive Aircraft" (corresponding to his status as the 47th President), faces the embarrassing situation of being unable to fly without Chinese rare earths. Pentagon subcontractors at levels five and six can hardly do without Chinese manufacturers.

Even more devastating is that America's efforts to rebuild its rare earth supply chain are proceeding with great difficulty. Although the Mountain Pass mine in California can extract rare earths, its refining technology still depends on China; the combined output of allies like Australia and Canada accounts for less than 10% of the global total, and the smelting equipment bears the mark "Made in China." Building a new rare earth refinery takes five years, and training skilled workers requires three years—precisely the resource that America cannot afford to waste.

The brilliance of China's rare earth control lies in its "dual-track" design: maintaining the basic operations of Western civilian industries through temporary licenses while using "penetrating supervision" to cut off military acquisition channels.

The core of this strategy is "demand diversion." When Ford factories halted production due to rare earth shortages, leaving thousands of unfinished cars gathering dust on the assembly line, China issued "rescue licenses" to carmakers; however, China's doors remain closed to Lockheed Martin's F-35 production lines. The Ministry of Commerce's statement hit the nail on the head: the license is only valid for the "civilian sector," and military enterprises "are still excluded."

The "one batch per certificate" system requires companies to detail the final buyer and ultimate use of each batch of rare earths and provide multi-level contract flow information. This "penetrating supervision" is akin to installing an "X-ray machine" in the rare earth supply chain, exposing any attempts to divert materials to military use.

China's ultimate goal is to suppress demand, destroying the economic motivation for the West to rebuild its rare earth supply chain. Historical experience shows that relying solely on military demand cannot sustain a complete supply chain—the annual consumption of rare earths by the U.S. military accounts for only 3% of global production.

When civilian enterprises can "just get by," they will not risk investing in ventures aligned with military purposes. Rebuilding a rare earth supply chain requires hundreds of billions of dollars in investment and over a decade, with strict environmental approvals. America once tried to build smelters in military bases but found itself caught between "cutting off China's supply" and dealing with fines from the Environmental Protection Agency—a classic case of "shooting myself in the foot."

The Pentagon's annual rare earth demand is around 5,000 tons, while a medium-sized rare earth mine produces 30,000 tons annually. Relying solely on military orders, no rare earth project can be profitable. This is precisely where China's strategy shines—maintaining the "comfortable dependence" of Western enterprises through civilian licenses while gradually drying up the resources for military industries in a resource desert.

Through the dual-track system of "civilian approval-military blockade," China is achieving three strategic goals:

Technological Obsolescence: Delaying the F-47 project by over 10 years gives China's "South Six" and "North Six" sixth-generation fighters a lead window;

By leveraging export controls and tracking systems, China dominates the rules of rare earth international trade, converting resource advantages into institutional advantages;

When the U.S. military-industrial complex loses its technological edge due to resource shortages, the Pentagon's global intervention capability will be undermined. A multipolar world pursued by China will accelerate its arrival.

The "valid for six months" on the temporary license is both a lifeline for U.S. automakers and a countdown—180 days later, if the U.S. continues to be inflexible on the tariff battlefield, the supply crisis will return. The key to the outcome of this game has never been how many temporary licenses were obtained but in understanding the subtext in China's Ministry of Commerce response: when red lines cannot be crossed, the foundation of hegemony quietly crumbles.

Original source: https://www.toutiao.com/article/7517603464294318632/

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