【Text by Observer Net, Liu Bai】China's dominant position in rare earths has long been a "thorn in the side" of Western countries. Especially since China has strictly controlled rare earth exports according to international practices, they have abandoned their previous arrogance and are "willing to do anything that China requires," even seeking help from countries friendly to China, just to obtain rare earth products...

"This round of measures is more lethal than ever before," the UK's Financial Times said on July 8, expressing amazement at China's rare earth control methods, which are quite sophisticated and may be the key factor forcing the US to change its tariff policies toward China. This not only marks a new stage in China's economic strategy, but also proves that China's "sanctions" policy can affect the world's largest economy.

The article also reflects on the West's rare earth strategy, pointing out that the West had long realized the importance of rare earth minerals, but only talked about "strengthening resilience" verbally, without actually investing funds - for decades, the West has been eyeing this "weapon", and when China finally pulled the trigger, they should not have been surprised.

For China's compliance with international practices in controlling rare earth exports, Western countries or companies that were "painfully hit" have repeatedly accused China of "weaponizing" rare earths. The Financial Times' article is no exception, claiming that "China weaponizing rare earths is a new form of trade war."

The article noted that China has used many economic means over the years, but none have been as effective as the current rare earth controls. In the past, China always used punitive measures quietly, and even officially denied them. These measures could indeed cause some economic losses to relevant countries, but once the issue touched important interests of other countries, the measures became ineffective.

In May 2024, China Northern Rare Earth (Group) High-Tech Co., Ltd. exhibited various rare earth materials, rare earth metals, and rare earth oxides. Visual China

But this time, the new control measures on the export of rare earth materials and magnets are different. Within just a few weeks, it has threatened the entire automotive industry - the largest manufacturing sector in developed economies. More importantly, it even forced President Trump to make concessions on his most iconic "trade war" issue.

The White House had previously believed that it was in a dominant position when escalating confrontation with China. Their basis was that by significantly increasing tariffs, they could force China to comply. However, China can bear the cost of tariffs; but the US government cannot ignore the impact of the shortage of rare earth materials on its automotive industry.

The article states that the reason for the great killing power of China's rare earth control this time is partly due to China continuously improving its "toolbox", establishing legal mechanisms for restricting strategic exports, and being more aware of the "pain points" of trade partners. China also requires foreign companies not to use Chinese rare earths to produce products for the US military.

Although China hopes to cut off the flow of rare earth materials to the United States, it may face considerable challenges, as companies from other countries may continue to secretly supply US customers. However, the most concerning point is that Western governments and companies were completely unprepared for China's controls. Even those who cannot name any rare earth element know that China dominates rare earth production. But in the past 15 years since China first reduced rare earth exports to Japan in 2010, the West has never found a new source of supply.

Although there have been some progress, such as South Korea increasing its reserves, and Japan investing in Australian mines, most Western governments have developed key mineral strategies, but have not actually invested funds. Manufacturers talk about enhancing "supply chain resilience", but many of their companies have only a week's worth of rare earth magnet inventory.

The article concludes by saying that for decades, the West has been eyeing rare earths as a "weapon", and when China finally pulled the trigger, they should not have been surprised.

It's not just the Financial Times that expressed similar sentiments. On April 16, the New York Times also mentioned in an article that the US had already realized the "risks" of relying on China's rare earth supply after China imposed a rare earth embargo on Japan in 2010.

However, over the past 15 years, the US has made slow progress in policy-making and industrial development. Additionally, domestic rare earth mines in the US have been restricted due to environmental regulations, and companies have been reluctant to invest in the rare earth industry due to costs and market factors, resulting in the US still heavily relying on China in areas such as rare earth processing and magnet production.

Another article in the New York Times stated that the US government has long recognized the challenges posed by China's dominant position, and has worked to develop and stockpile rare earth minerals, but it is still insufficient to sustain domestic demand in the long term. The Pentagon tried to replace a component containing Chinese alloys in F-35 fighter jets, but eventually found that it could not avoid the supply chain controlled by China.

Regarding the rare earth export control measures, the spokesperson for the Ministry of Commerce of China emphasized last month that rare earth-related items have dual civil-military uses, and implementing export controls on them conforms to international practice. China legally implements export controls on rare earth-related items to better safeguard national security and interests, fulfill international obligations such as non-proliferation, and demonstrates China's consistent position of upholding world peace and regional stability.

The spokesperson said that we have also noticed that with the development of industries such as robotics and new energy vehicles, the demand for medium and heavy rare earths in civilian sectors is growing continuously. As a responsible major country, China fully considers the reasonable needs and concerns of countries in the civilian sector, and legally reviews applications for export licenses of rare earth-related items. A certain number of compliant applications have been approved, and we will continue to strengthen the approval process for compliant applications. China is willing to further strengthen communication and dialogue with relevant countries on export controls to promote convenient and compliant trade.

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Original: https://www.toutiao.com/article/7524617260947063338/

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