China raises tensions by restricting exports of rare metals to US

China’s Ministry of Commerce announced on Tuesday that it will strengthen reporting controls on strategically important rare earth metals and oxide materials, which must now be reported to authorities for export.

The move could affect the US supply of critical minerals used to make electric cars and missiles, the paper reported. Newsweek.

Under the new rules, traders must submit real-time reports that include country of origin, date of contract signing, quantity, loading dates and ship and arrival information, as well as port of arrival for customs clearance. The government has not publicly detailed what minerals are subject to this new reporting requirement.

The decision is seen as a message to Washington about Beijing’s ability to influence specific sectors in response to US restrictions on high-quality semiconductors. It comes as Chinese President Xi Jinping heads to San Francisco next week for the Asia-Pacific Economic Cooperation summit, where he will meet President Joe Biden and attend a reception with corporate leaders from North America.

Rare earths (from the English abbreviation REE, Rare–earth element) There are 17 metals that are essential for the production of high-tech products that are used to make magnets used for commercial and military purposes – including the production of fighter jets like the F-35. And China has the largest reserves of REE in the world.

Because of their use in products, these strategic mineral deposits are not surprising High technologyThey are responsible for coining nicknames such as “industrial vitamins”, “future fuel” and “21st century gold”, reflecting their importance in the field.

By 2022, China will account for nearly 70% of world rare earth mineral production and nearly 85% of global processing capacity. This suggests that an immediate reduction in China’s external dependence is unlikely South China Morning Post.

Earlier, the notification mechanism covered 14 imported products such as soybeans, rapeseed oil, milk powder, pork, beef and sugar.

Importers of crude oil, iron ore, copper ore concentrate and potash fertilizers have been advised to report orders and exports.

Common practice, Beijing says

Ministry spokesperson He Yatong said it is common international practice to establish a statistical inspection and reporting mechanism for the import and export of certain bulk goods.

These import and export reports, he said, “help in timely analysis of inflow and outflow trends of gross products”.

The new inventory reporting requirement is an update to regulations issued by China’s Bureau of Statistics in 2022 and will be in effect for two years from October 31.

In July, China banned exports of gallium and germanium, two key minerals for semiconductors, in response to US restrictions on Chinese access to high-end chips.

Experts question the effectiveness of the move, arguing that restricting rare earths would harm the Chinese economy, given the country’s production of global consumer goods. John LaForge, Head of Real Asset Strategy Wells Fargo Investment Companyexpressed this view in a 2019 research report.

“It’s hard for us to see how China can impose restrictions on rare earths and not shoot itself in the foot economically,” he said.

The United States, along with allies, is seeking to reduce China’s dependence on rare earths, bolstering domestic production in places like Fort Worth, Texas. Meanwhile, China continues to discover new reserves, such as the discovery of new ore in Batu, Inner Mongolia.