China has toughened its rules on the export of rare earths, crucial materials for many modern technologies from smartphones to fighter jets.
The move strengthens Beijing’s hand ahead of talks expected later this month between China’s President Xi Jinping and his US counterpart Donald Trump.
China’s Ministry of Commerce on Thursday announced tighter restrictions on exports of processing technology and hinted at limits on exports to foreign arms manufacturers and some semiconductor firms.
It follows calls in the US for stricter bans on exports of chip-making equipment to China, and mimics a measure Washington has used to restrict exports of semiconductor-related products to China.
“From a geostrategic perspective, this helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in (South) Korea later this month,” said Tim Zhang, founder of Singapore-based Edge Research.
The rules give China more control over the global rare-earth supply chain – a major sticking point in recent lengthy trade negotiations with Washington.
China’s rare earth dominance
China accounts for nearly 70% of the world’s rare earths mining and controls roughly 90% of global rare earths processing.
The 17 rare earth elements are used in products across society, including electric vehicles and military radars.
China’s dominance has given it a cutting edge over the clean technologies of the future, including electric vehicles and wind turbines.
In April, it announced sweeping controls in retaliation for tariffs imposed by the Trump administration, which caused worldwide shortages until a…
