China Moves to Shut Spigot on Rare Earths for First Time in 5 Years
- China Moves to Shut Spigot on Rare Earths for First Time in 5 Years
by SHUNSUKE TABETA and MARRIAN ZHOU, Nikkei staff writers, https://asia.nikkei.com/
US vows ‘unprecedented action’ to boost domestic output
BEIJING/NEW YORK — The Chinese government signaled Tuesday that it will take steps toward restricting rare-earth metal exports in its deepening trade war with the U.S., a step that could disrupt key supplies for high-tech industries even at the risk of isolation from the international community.
Meanwhile, the U.S. Department of Commerce promised “unprecedented action” to reduce dependence on foreign sources of “critical minerals” and recommended urgent steps, including boosting domestic production.
The moves by both sides reflect the vital importance of rare earths to the tech sector today and in the future. China knows it wields a strategic advantage as the dominant supplier, while the U.S. understands that its technological advantage hinges on continued access to the minerals.
At a meeting of China’s National Development and Reform Commission on Tuesday, rare-earth experts recommended greater controls on exports of the metals, according to the state-run Xinhua News Agency. The recommendation calls for a centralized system to manage their mining and processing, and the commission said it will soon launch a policy reflecting the proposal.
China produces 70% of the world’s rare earths, which are a critical component in a range of products including electric cars, smartphones and even military equipment. The U.S. relies on the country for 80% of its imports of the metals and compounds.
In May, President Xi Jinping visited a magnet maker in Ganzhou, Jiangxi Province — the heart of China’s rare-earth production — where he called the metals an “important strategic resource.”