WIREDGOV

EXPERT COMMENT

China’s new rare earth export controls should galvanize the West to build resilience against China’s growing dominance in global manufacturing and its control over crucial supply chains.

Beijing’s new rules announced on Thursday stipulate that licenses will be required for the export of technologies used in rare earth mining and processing, as well as for the manufacturing of magnets, which can be used in military technologies. Crucially, any foreign firm that wants to supply rare earths produced in China or processed with Chinese technologies outside China will also need to get a license, according to China’s Ministry of Commerce. 

These restrictions send a particularly powerful signal because Chinese companies control more than 90 per cent of the world’s processing capacity for rare earths.

The new rules could also give President Xi Jinping greater leverage as he prepares to meet US President Donald Trump in South Korea later this month to discuss bilateral trade frictions. The rare earths that Beijing is increasing its control over are critical to a range of technologies from electric vehicles to wind turbines and defence systems. The new restrictions on rare earths come amid a freeze by China on buying US soybeans from the autumn harvest – another instance of Beijing building leverage with Washington.

The move by Beijing refocuses attention on how China uses its influence as the world’s biggest trading nation and its dominance of manufacturing supply chains to project its power in international affairs. 

China’s willingness to use its trade heft to advance geopolitical goals should make policymakers in the West wake up to the burgeoning power of China’s manufacturing supply chain and its control over certain so-called ‘chokepoint’ technologies – which it can limit access to at will. 

Click here to continue reading the full version of this Expert Comment on the Chatham House website.