China is tightening controls on the export of rare earths. The Chinese Ministry of Commerce announced this on Thursday. In part, restrictions on the export of technology for processing will be expanded.
At the same time, China is making it clear that the country wants to limit exports to semiconductor and defense companies. The Chinese ministry says that the measures are to protect China's "national security and interests," writes the Financial Times. It is to prevent "misuse of materials in the military sector and other sensitive sectors."
Thursday's tightening follows an announcement from April, which led to shortages in several places around the world. However, agreements were later reached with the United States and Europe, which reduced the shortage situation.
Control of rare earths could become an important piece of the puzzle for China in trade negotiations with the United States. The latest tightening has been announced a few weeks before US President Donald Trump and Chinese President Xi Jinping are due to meet in South Korea. This will happen later this month.
- From a geostrategic perspective, it gives the Chinese government increased leverage ahead of the expected Trump-Xi summit, says Tim Zhang, founder of the consulting firm Edge Research.
China is sitting on the resources
China produces over 90 percent of the world's processed rare earths and rare earth magnets. The rare earths are a group of 17 metals that are used in, for example, electric cars, mobile phones, missile systems and other electronics.
There are no known alternatives to the metals that are not necessarily rare. But they are rarely found in concentrations that are economically profitable to extract.
China is also expanding export controls to foreign companies that use Chinese equipment or materials based on rare earths. This is reported by the Ministry of Commerce.
This is reminiscent of measures from the United States, which has limited exports of semiconductor-related products. At the same time, restrictions on the export of technology for magnets based on rare earth elements are being expanded. The restrictions will thus apply to more types of magnets.
/ritzau/Reuters
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