China has 90% market share in rare earth minerals, which is used in a sundry of things pertaining to electronics, especially smart phones. Since China has weaponized their supply against us before (2010), it’s now widely believed that Xi’s visit to a rare earth facility yesterday was a signal that Beijing was willing to do it again.
Via South China Morning Post
Chinese President Xi Jinping has sought to tap into the “Long March” spirit of endurance to rally the public as trade and technology tensions rise with the United States, observers said.
In his first domestic trip since the escalation of the US-China trade war early this month, Xi visited one of the country’s major rare earths mining and processing facilities in Ganzhou, Jiangxi province, state news agency Xinhua reported on Monday.
He also paid respects at a monument in Yudu, a county in the city, marking the start of the Communist Party’s Long March 85 years ago, the report said.
Xi was accompanied by Vice-Premier Liu He, Xi’s most trusted adviser and China’s top trade negotiator in the year-long talks with the US.
State media gave few details of the trip and made no mention of the trade war, but analysts said the president’s visit sent a strong message of China’s determination in the stand-off.
China has toughened its rhetoric in recent weeks as Washington raised tariffs on thousands of Chinese exports and put China’s telecom champion Huawei on an export-control list. There is also growing speculation in China that Beijing could consider banning the export of rare earths to hit back at the US.
Beijing has weaponised the trade of rare earths before, slashing the export quota by 40 per cent in 2010. The US, Japan and the European Union filed a complaint against the Chinese quota at the World Trade Organisation in 2012, with the WTO ruling against China. Beijing dropped its export restrictions in 2015.
But other observers were sceptical of the effectiveness of a rare earths ban.
Renmin University international relations professor Shi Yinhong said rare earths were not significant given the wide impact of the trade war.
“It would be a small matter even if China weaponised rare earths to retaliate against the US,” Shi said.
“We should prepare for an intensification of Washington’s ongoing efforts to stem the flow of technology from the US to China by investment restrictions, export controls, and limits on visas for tech-oriented students and workers,” Kroeber said.
Shares of the rare earth ETF, REMX, is soaring on high volume.
China to U.S.: You wanna cut us off from your electronics components? We’ll cut off the materials that go into the components. How does that sound? https://t.co/py9B77fA7i
— Eunice Yoon (@onlyyoontv) May 20, 2019
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