[Source/Observation Network by Shao Yun]
Recently, according to sources cited by South Korean media, some South Korean companies have received a "warning" from the Chinese side, requesting them not to export products containing Chinese rare earth materials to American military companies. In response, the Ministry of Industry, Trade and Resources of South Korea stated on the 23rd that it has not yet confirmed this matter. The Chinese Foreign Ministry also responded on the 23rd, saying it was unaware of the specific situation and suggested that the reporter ask the relevant Chinese authorities for inquiries.
However, this news has caused concerns in South Korea: caught between the U.S. and China, South Korea might suffer losses like a shrimp in the struggle of two whales.
On the 22nd, the "Korean Economy" quoted government and industry insiders as saying that the Chinese side recently issued a "warning document" to South Korean companies, requiring them to "ensure they will not export power equipment containing Chinese heavy rare earth elements to American military enterprises and military forces," and stating that "violations will result in sanctions."
It is reported that the "targeted warning" includes "most companies" in South Korean industries such as power equipment, secondary batteries, displays, electric vehicles, aerospace, and medical devices, which all rely heavily on importing strategic minerals from China.
The report emphasized that although the warning document did not explicitly state the details of the "sanctions," the South Korean industry widely interpreted it as the Chinese side halting the supply of heavy rare earth elements to non-compliant companies. The report also cited a responsible government official who claimed that China seemed to have begun comprehensive implementation of third-country export control over its strategic minerals, suggesting that similar warnings may have been sent to Japan, Europe, and other regions dependent on Chinese raw materials.
According to the "Korean Economy," domestic South Korean companies producing transformers and other power equipment have already entered an "emergency state." A power equipment production company reportedly receiving the "warning document" from the Chinese government, while emphasizing that their finished products are not military-related, still conducted a thorough investigation of its subsidiaries and related enterprises.
On the 23rd, the Ministry of Industry, Trade and Resources of South Korea released a statement in response, saying: "The South Korean government is verifying the facts of the above reports through communication with the Chinese government and the South Korean industry. So far, no South Korean company has confirmed receiving the aforementioned Chinese government document."
The statement also mentioned that the South Korean side would continue to closely monitor the export control trends of major trading partners and make every effort to communicate and coordinate with the export control departments of relevant countries to support South Korean companies facing potential supply chain disruptions.
Local time on April 21, 2025, parked export cars at Pohang Port in Gyeonggi-do, South Korea. Visual China.
Even if the so-called "warning document" is true, the "Korean Economy" believes that the requirements proposed by China are not high. However, the report emphasized that due to South Korea's high dependence on rare earth supplies from China, the sense of crisis felt by South Korean companies is different. According to the "Korean Herald," approximately 50% of South Korea's rare earth imports come from China.
The "Korean Economy" provided examples, mentioning that South Korean companies are contracted to supply parts such as fuselages, engines, and avionics to American military enterprises, with more than 70% of scandium imports for aircraft fuselages coming from China. Additionally, key rare earth elements such as samarium, gadolinium, and dysprosium, essential for manufacturing high-performance permanent magnets for electric vehicle motors in South Korea, are highly reliant on Chinese imports, and these elements are all on the restricted list.
Domestic voices in South Korea have recently expressed concerns, fearing that South Korea might suffer losses like a shrimp in the struggle between the U.S. and China. In 2024, China and the U.S. were South Korea's first and second largest export markets, respectively. South Korean media believe that if future trade frictions between China and the U.S. intensify and extend third-party export controls, exports by South Korean companies could significantly decline, forcing them to choose between "Chinese raw materials" and the "American market."
China is the main global supplier of rare earth materials, accounting for about 70% of global production. From 2020 to 2023, 70% of the U.S. rare earth compounds and metals imports came from China. According to Reuters, the U.S. government also has rare earth reserves, but they are insufficient to continuously supply its military industries. The South Korean government stated on April 4th that its public reserves of materials such as dysprosium and yttrium can last for six months.
In fact, with the rise of unilateralism and protectionism in recent years, seriously disrupting normal Sino-U.S. economic and trade cooperation, reports about South Korea being caught in a dilemma and worried about its own survival have frequently appeared in South Korean media.
Looking back at President Trump's first term, since he sparked the Sino-U.S. economic and trade friction in 2018, the U.S. imposed high tariffs on over $500 billion worth of Chinese goods exported to the U.S., continuously implementing policies to contain and suppress China. In response, China had to take strong countermeasures to resolutely defend national interests. Meanwhile, China has always adhered to the basic position of resolving disputes through dialogue and consultation, engaging in multiple rounds of economic and trade consultations with the U.S. to strive for stabilizing bilateral economic and trade relations.
However, after Trump returned to the White House in January this year, he further increased tariffs on all Chinese goods exported to the U.S. to extremely high levels. In response, on April 4th, the Ministry of Commerce of China, together with the General Administration of Customs, issued an announcement imposing export control measures on seven categories of medium and heavy rare earth-related items including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, which took effect upon publication.
At the regular press conference on April 23rd, a journalist asked about the aforementioned South Korean media report. In response, Foreign Ministry spokesperson Guo Jiaqun said: "I am unaware of the specific situation you mentioned. I suggest you inquire with the relevant Chinese authorities."
Notably, at the request of the U.S., South Korea and the U.S. will hold a "2+2" trade consultation in Washington on the morning of the 24th local time. Previously, foreign media reported that sources revealed that the Trump administration was preparing to pressure other countries to limit trade with China in exchange for tariff exemptions during tariff negotiations.
In response, a spokesperson for the Ministry of Commerce replied on the official website in the form of answering journalists' questions on the 21st. Recently, the U.S. has been imposing tariffs under the pretext of "reciprocity," coercing various parties to engage in so-called "reciprocal tariff" negotiations. This is essentially using the guise of "reciprocity" to promote hegemonism and implement unilateral bullying in the economic and trade field. Appeasement does not bring peace, and compromise does not earn respect.
The spokesperson also said that China believed that all parties should stand on the side of fairness and justice and on the right side of history regarding the issue of "reciprocal tariffs," defending international trade rules and the multilateral trading system. It is particularly important to note that China firmly opposes any transaction that sacrifices its interests. If such a situation arises, China will not accept it and will resolutely retaliate proportionally. China has the determination and capability to safeguard its own interests.
This article is an exclusive contribution from the Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7496815654273417767/
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