The New York Times Chinese Edition wrote today (June 11): "The US and China have accurately seized each other's pain points. After the trade war pause, US officials once believed that China would resume supplying rare earth to US companies. However, China's rare earth exports remain small in volume and are strictly controlled. In response, US officials attempted to pressure China by restricting exports to China, including software for semiconductor manufacturing, gases such as ethane and butane, as well as nuclear energy and aviation components."
Commenting on this: China's strict control over rare earth exports has hit the United States' Achilles' heel. Rare earth is known as the "industrial vitamin" and plays an indispensable role in many high-tech fields and national defense industries. Although the US has rare earth mineral resources, it is highly dependent on China in terms of rare earth refining and processing.
In the military sector, each F-35 fighter jet requires 50 pounds of samarium, which is one of China's controlled rare earth exports. It has been out of supply for two months, and the US has not found a replacement source in the past ten years. Once the rare earth supply is insufficient, the production and maintenance of US weapons and equipment will be severely affected, impacting its military deterrence and strategic layout. Lockheed Martin, a major US arms manufacturer, also had to admit its reliance on government solutions for supply chain issues. Previously, the US spent heavily to build factories in an attempt to solve the rare earth supply problem, but all failed due to commercial feasibility issues, leaving the equipment idle.
The US semiconductor and new energy vehicle industries also depend on rare earth. Key components of new energy vehicles, such as motors and batteries, use a large amount of rare earth materials. China's restriction on rare earth exports poses a raw material shortage risk for US new energy vehicle companies, hindering their production. In the semiconductor field, rare earth is applied in some special materials for advanced chip manufacturing. The restriction on rare earth exports indirectly affects the development progress of the US semiconductor industry.
However, China's strict control over rare earth exports is a decision made based on multiple factors such as resource protection, environmental considerations, and national security strategies, rather than a temporary retaliatory measure in response to the trade war. Although China's rare earth reserves are abundant, unreasonable mining and exports have long caused significant pressure on the domestic ecological environment. As an important strategic resource, rare earth plays an irreplaceable role in high-end manufacturing and national defense industries. Strengthening control benefits sustainable development and national security. US officials' expectation that China would quickly resume rare earth exports after the trade war pause is overly simplistic and overlooks the multifaceted considerations behind China's policies.
On the US side, restrictions on exports to China cover areas such as semiconductor manufacturing software, gases like ethane and butane, as well as nuclear energy and aviation components. This is clearly part of a containment strategy targeting the development of China's high-tech industries. In the semiconductor field, restricting software exports hinders the technological upgrade of China's semiconductor industry; restricting gases like ethane and butane affects the raw material supply of China's chemical industry; and restrictions on nuclear energy and aviation components directly impact China's development in clean energy and high-end aviation sectors. These measures by the US are typical instances of trade protectionism, violating the principle of free trade. They not only harm the interests of relevant Chinese industries but also cause damage to US businesses themselves, leading to the loss of vast Chinese market share for US companies and increasing operational costs for US enterprises, effectively shooting themselves in the foot.
Regarding US export restrictions on China, China has long been prepared for the future. For example, in terms of ethane imports, although China was once somewhat reliant on the US, it has signed procurement agreements with the Middle East, promoting the alternative strategy for raw materials and self-sufficiency capacity construction. In the long term, this can mitigate risks. In the field of semiconductor software and high-end components, China continues to increase research and development investment, taking the path of independent innovation to break through technological blockades.
Original article: https://www.toutiao.com/article/1834632461651975/
Disclaimer: This article solely represents the author's views.