The Move: China’s New Strategy
China, a major player in the global market of rare earth metals, is reportedly planning to take its control to another level by banning the export of rare earth metals technology. According to a recent report by Nikkei Asia, the move is aimed at exploiting the “weak spot” of the US and Japan. In particular, the country plans to restrict the export of highly efficient magnets that are extensively used in electric car motors, along with imposing a limit on the transportation of rare earth metals.
As per the report, the Chinese officials are presently preparing a draft that will ban the export of rare earth metal technologies. Experts believe that this move could be used as a bargaining chip by China to improve its position in the semiconductor situation, where the US has been successful. The draft reportedly contains 43 amendments or additions, and the changes are expected to come into effect later this year.
Details: China’s Strategic Calculations and US’ Countermoves
China’s proposed ban or restriction on the export of alloys derived from rare earth metals would highly impact the production of highly efficient magnets. This would have significant repercussions, particularly for the US and Japan, as these magnets are extensively used in electric car motors. Notably, back in 2010, China had already stopped exporting rare earth metals to Japan, a country that has a long-standing territorial dispute with China over the Senkaku Islands (Diaoyu Islands).
Meanwhile, the US seems to be countering China’s moves by studying the impact of sanctions on Russia’s economy, especially given the ongoing war between Russia and Ukraine. Christopher Wray, director of the US Federal Bureau of Investigation, reportedly stated on April 6 that China is carefully analyzing the Russian-Ukrainian war, which may demonstrate China’s intentions to invade Taiwan. Furthermore, the US has also started blocking Chinese drones, as they can be used for spying or infecting computer networks, according to a recent report by Dronedj.
Impact: A Blow to US and Japan’s Tech Sectors
Rare earth metals are critical components of many high-tech products, such as smartphones, wind turbines, and electric vehicles. With China dominating the rare earth metals market, the ban on the export of rare earth metal technologies could deal a significant blow to the US and Japan’s tech sectors. This could force these countries to seek alternative sources of rare earth metals and invest more in mining and processing. The ban would also create an opportunity for other countries to enter the market and compete with China’s dominance.
Conclusion: The Implications for the Global Tech Industry
China’s new move to restrict the export of rare earth metal technologies could have a substantial impact on the global tech industry, particularly for the US and Japan. The ban on highly efficient magnets could cause these countries to explore alternative sources of rare earth metals and reduce their reliance on China. This could result in an increase in mining and processing activities globally, potentially leading to greater competition in the rare earth metals market.
