Chinese and American flags fly outside a technology company in Beijing, China.
Pedro Pardo/AFP via Getty Images
hide caption
toggle caption
Pedro Pardo/AFP via Getty Images
BEIJING — China introduced new restrictions on exports of rare earths and related technologies on Thursday, in what analysts see as an attempt to strengthen Beijing’s influence in trade negotiations with the United States ahead of an upcoming leaders’ meeting.
The main target of the so-called campaign of the Ministry of Commerce “unreliable entity list” They appear to be American defense technology companies, which rely on rare earths from China. Also on the list is the Halifax International Security Forum, an annual security summit held in Halifax, Canada.
The moves come less than a month before President Trump and Chinese leader Xi Jinping meet in South Korea on the sidelines of an Asia-Pacific summit — the first face-to-face meeting between Xi and a U.S. president in nearly a year.
China processes about 90% of the world’s rare earths, which are essential inputs in everything from smartphones to advanced fighter jets. Beijing has used its dominance over rare earths to pressure the United States as trade frictions have escalated this year following Trump’s “Liberation Day” tariffs.
According to a series of ministry announcements Thursday, the new rules expand the list of controlled rare earths that require licenses for export, restrict the types of rare earth recycling and processing equipment that can be sent overseas, and crack down on the use of Chinese rare earths in the overseas chip sector and in military applications.
Dan Wang, director of China at the Eurasia Group, said the move signals “a deliberate effort to strengthen China’s negotiating position” ahead of the meeting between Trump and Xi.
“Access to rare earth technologies will likely feature in negotiations on tariffs, semiconductors and broader technology trade. By demonstrating that China can calibrate controls, Beijing is showing a new level of confidence and sophistication,” she said.
“This policy could become an example of China’s broader approach to strategic products – like cobalt, graphite, etc. – turning export controls into diplomatic leverage. China’s dominance in resources and associated technologies will become a new choke point for global trade.”
Samples of rare earth minerals from Bayan Obo mining district are on display at the Institute of Geology and Geophysics of the Chinese Academy of Sciences, May 17, in Beijing, China.
China Visual Group/Getty Images
hide caption
toggle caption
China Visual Group/Getty Images
China says export controls serve national security
A ministry spokesperson said the tightened controls on the export of rare earths were aimed at strengthening China’s national security.
“Recently, some foreign organizations and individuals have directly or indirectly transferred or provided rare earth-controlled objects of Chinese origin, either in their original form or after processing, to entities and individuals in sensitive sectors such as the military,” the spokesperson said in a statement.
“These activities have caused significant damage or posed potential threats to China’s security and national interests, undermined international peace and stability, and undermined global non-proliferation efforts.”
This is not the first time that China has restricted its exports of rare earths
In April, after Trump announced higher tariffs on China and other countries, Beijing has tightened rare earth exports, leading to supply shortages – and a rush to negotiate. Asset I received a call with Xi in June who, according to him, would have enabled progress on rare earths.
The two leaders spoke again in September to set the stage for their meeting in South Korea. Trump said he had accepted an invitation to visit China early next year and that Xi had agreed to visit the United States at an “appropriate time.”
In a separate statement, the Commerce Department added 14 foreign companies to its list of “unreliable entities,” many of which are U.S. aerospace defense companies. A ministry spokesperson reportedly said the move was a response to business cooperation with Taiwan, the self-governing island that Beijing considers part of China.
“These actions seriously undermined China’s national sovereignty, security and development interests,” the spokesperson said in a statement.
