Chinese state media this week sought to play down Beijing's actions in the global rare earths market amid concerns the government is attempting to dominate the supply chain.
Rear earth elements refer to a group of 17 metals, along with critical minerals like lithium and copper, which are relatively abundant but difficult to find and extract in large quantities. The ores are critical to the technologies driving the world's transition to clean energy—and also are used in defense industrial bases around the world.
Last week, China's Commerce Ministry announced new restrictions on the list of technologies that cannot be transferred overseas. Among them were equipment used in the processing of rare earth elements and magnets.
Industry experts have interpreted the move as another tit-for-tat measure in a U.S-China war over emerging technologies, in which Washington and Beijing have sought to consolidate their respective advantages in high-tech supply chains while limiting the other's access to remain a step ahead.
In October, the U.S. Commerce Department curbed Chinese market access to the most advanced semiconductors, which U.S. officials have said were inadvertently fueling China's military modernization and buildup. In response last month, Beijing hinted at restricting exports to the West of the critical elements required to make the chips.
The Chinese Commerce Ministry's new controls on processing equipment take the fight further up the supply chain in areas where China's state-backed firms retain an advantage.
Last Friday, the state-owned China Daily newspaper highlighted that China processes 30 percent of the world's rare earth minerals and effectively controls 70 percent of global demand. But its latest policy was not aimed at the West, it said.
"It would be much better for the West to spend precious time developing its industry rather than blaming China," read one article in the paper's opinion pages.
The nationalistic Global Times, in an editorial on Sunday, said that, contrary to the West's focus on hardware explicitly related to rare earths, China had in fact reduced the overall number of technologies covered by the new restrictions.
The move would not have actual implications for the global supply chain, the tabloid said.
China's other moves, however, were contributing to raised eyebrows and speculation that it was seeking to solidify its dominant position in the rare earths market.
According to Hong Kong's South China Morning Post, China's import of critical chip-making lithography systems from the Netherlands increased in November.
Customs data showed the import of 42 lithography systems—used in making high-end chips—totaling $816.8 million, with significant contributions from the Netherlands and Japan, the newspaper said.
The quiet stockpiling suggested Chinese companies could still obtain specific advanced hardware despite U.S. export rules, which they appeared to anticipate would be tightened further in the near future.
The surge also underscored China's intent to bolster its domestic semiconductor industry with Western technologies while it still could.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Aadil Brar is a reporter for Newsweek based in Taipei, Taiwan. He covers international security, U.S.-China relations, and East Asian ... Read more
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