The various electronic products available on the market, before reaching consumers, undergo assembly into parts that use a series of raw materials. In this regard, China recently announced new and stricter restrictions on the export of rare earths, a group of 17 chemical elements essential for the manufacture of these electronics, ranging from smartphones and electric cars to military jets. It’s worth mentioning that this measure comes amid trade conflicts between the United States and China.
How rare earths became the silent heart of global technology
Many people may not be familiar with rare earths, but they are present in almost everything we encounter in our daily lives. Their applications are numerous; without them, there would be no touchscreens, electric vehicle motors, sound systems, wind turbines, and many other technologies.
For many years, China has invested heavily in specific areas of the technology market production cycle, aiming to dominate and become a benchmark in the production cycle of these parts. With expertise and internal capacity ranging from mining to processing and the manufacturing of permanent magnets — key components for electronic and defense equipment — this capacity allows the country to have significant influence in dictating the pace of the global market, which can also be used as a political tool.
The new rules, released by the Ministry of Commerce, require foreign companies to obtain authorization from the Chinese government before exporting products containing any trace of Chinese-origin rare earths. In other words, even components manufactured outside China but using Chinese technologies or raw materials will now be subjected to Beijing’s control.
Restrictions put pressure on industries and raise alarms in the US and Europe
The measure has a direct impact on several sectors, notably defense and semiconductors. In the United States, fighter jets like the F-35, submarines, and missiles rely on materials sourced from Chinese mines, while in Europe, the green transition, based on clean energy and electric vehicles, also relies on these inputs.
The announcement comes shortly before a scheduled meeting between President Xi Jinping and Donald Trump, which further reinforces the idea that it was done strategically and definitely not randomly.
“From a geostrategic perspective, this helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in (South) Korea later this month,” said Tim Zhang, a Singapore-based analyst.
Beijing seeks to safeguard its rare earth expertise while rivals race to recover ground
In addition to these measures, China will restrict the shipment of processing technologies and also limit the number of skilled Chinese Laborers in overseas extraction projects. These decisions aim to prevent the country from losing its know-how to other competing nations.
Meanwhile, the United States is racing to reduce the disparity in production capacity with China. The U.S. government has invested hundreds of millions of dollars in companies like MP Materials and Lynas, aiming to create a domestic production chain. But the process is expensive, slow, and still far from reaching the scale of China
The future of technology chains and the power dispute that goes beyond the economy
The dispute over rare earths is also a dispute over power and the ability to dictate, to a certain extent, technological production power. With the new restrictions, China reinforces its image as a power willing to use its natural resources as an instrument of political influence. At the same time, other countries must decide whether to accelerate their independence plan or accept Beijing’s terms.
In today’s increasingly connected and technology-dependent world, not to mention the race to advance artificial intelligence solutions, the Chinese decree comes as news capable of shaking up technological production chains on a global scale, and China is willing to use this to its advantage.