Direct news Mr. Chen, the Chinese Ministry of Commerce responded to the upgrading of rare-earth controls by saying that export control is not a ban on exports, does that mean China is more willing to negotiate?
Special commentator Chen Bing：China’s upgrading of rare earth and ultra-hard materials export control measures, many including U.S. President Trump, are viewed as a negotiation strategy, and ultimately want to resolve trade disputes through negotiation. So when the Chinese Ministry of Commerce says “export control is not prohibited exports” and control measures “affect very limited”, many people also interpret as China’s tendency to negotiate. This judgment can be a serious misjudgment. This time China’s upgrading of rare earth control measures, and bringing rare earth refining technology and ultra-hard materials to control, is an active strike, all remind Trump to the U.S. government that after the initial release of new rules on rare earth and ultra-hard materials export control, people may have a sense of “uncertainty”, but when you understandThe economic nuclear bombIf China does, the U.S. economy will face a recession.
Judging from the response of China's Ministry of Commerce, I think there are three points worthy of attention:
First, the Sino-U.S. trade war entered the decisive war phase, and China brought out the "killers" not one, but several.Let the United States choose whether it is war or peace. China has prepared a two-pronged response strategy of war and peace, and it is "Both hands are hard.The Chinese Ministry of Commerce once again stressed the consistent position that “we are not willing to fight, but we are not afraid to fight.”This means that China is not inclined to negotiate, but is fully prepared for war and peace.
Second, if the United States chooses the road of negotiation and peace, then this negotiation must be conducted in the principled position of fairness, reasonableness and non-discrimination. It is necessary to conduct a big negotiation and liquidation, which is equivalent to starting a new stove.As a result of several rounds of negotiations conducted by the US and China this year, China's export restrictions during the Biden period may have to be reviewed, renegotiated and resolved.The Ministry of Commerce noted in particular that the U.S. control list items exceed 3,000 items, while China's export control list items only over 900 items, are very unbalanced, and need to be solved.
Third, even if the Sino-US trade agreement can be negotiated, China's export control measures on rare earths and other related items will still be maintained. This is a legitimate practice for China to improve its own export control system in accordance with laws and regulations.However, you need to apply for an export license from China. As long as it is for civilian use and compliant export applications, it can be approved. The Ministry of Commerce emphasized that "export control is not a ban on exports". On the one hand, it pointed out that exports must be licensed, and on the other hand, it pointed out the scope of licensing, that is,"for civilian purposes."
In short, China must have made careful plans to upgrade the export measures of rare earths and superhard materials this time and be fully prepared for various results, which may shake the United States 'hegemony in international affairs.
Direct news：How will China's new export restrictions on rare earths and superhard materials affect the US economy? Is it as powerful as plunging the US economy into recession?
Special commentator Chen Bing：Has the power to plunge the American economy into recession. This time, China's new export restrictions not only increase the scope of restrictions on rare earth objects, but also include rare earth refining technology, and stipulate that if the value ratio reaches 0.1% or more, it must obtain an export license for dual-use items issued by the Ministry of Commerce of China. For example, if the Dutch ASML lithography machine is to be exported to the United States, if the value of rare earths reaches 0.1% and the rare earth materials used are imported from China or refined with Chinese technology, it must be approved by the Chinese Ministry of Commerce. The power of this control measure is that China can control the global trend and specific use process of rare earths, and can prevent "third-country transshipment". This kind of control measure actually comes from the United States. This is the method adopted by the United States to restrict the export of chips and chip technology to China. China is just "borrowing" or fighting fire with fire. Some overseas critics say that the first time China did this, it beat the United States to scream.
Let's look at the importance of rare earths. From the perspective of military industry, rare earths are known as "the life and death line of modern military industry". Rare earths are indispensable materials for manufacturing high-end equipment such as missile guidance systems, fighter engines, and key radar components; The purity and performance of rare earths directly determine the accuracy, mobility and actual combat effectiveness of weapons and equipment. From a civilian point of view, rare earths are the key materials for the production of 14-nanometer and chips, as well as semiconductor production equipment, testing equipment and materials. Computers, mobile phones, electric vehicles, wind turbines, glass, ceramics, laser equipment, optical instruments, etc., are inseparable from rare earths. Superhard materials are also good, such as diamond powder, which is widely used in the grinding and polishing of various hard materials such as optical crystals, ceramics, and superhard alloys. It is used in thermal conductors and heat dissipation materials of semiconductors, circuit boards and electronic components. High-performance flat panel displays and so on. It can be seen that the export restrictions on rare earths and superhard materials will immediately knock down the U.S. chip industry, and chips are the key to artificial intelligence. Without advanced chips, American artificial intelligence would immediately fall to the ground. What is supporting the U.S. economy this year? By artificial intelligence.80% of this year's shocking U.S. stock market rise came from AI-related companies.AI companies were damaged, the U.S. stock market could collapse, affecting the bond market, and the U.S. economy fell into recession.Therefore, the Wall Street Journal said that China's new rare earth control regulations are equivalent to a "The economic nuclear bomb", can destroy the U.S. AI industry and then push the U.S. economy into recession. China owns 95% of the world's diamond materials, that is, superhard materials, 70% rare earth materials and 92% refined rare earths. It is really amazing and can choke many industries in the United States.
Direct news：The United States still seems to be very hard-mouthed. Trump said that he would impose 100% tariffs on Chinese goods from November 1st, and impose export controls on all key software. The two sides are playing fiercely. Do you think the United States really wants to "decouple and break the chain" from China?
Special commentator Chen Bing：The United States is posing to escalate its trade war with China, as if it means "decoupling" with China. But judging from Trump's words and deeds, he knows that if he dares to fight a trade war with China, the United States will lose miserably. As we just said, it will push the U.S. economy into recession, and the United States may slip from its hegemony, and Trump will have to lie flat after next year's mid-term elections. So after learning about China's new rare earth regulations, he first became angry and threatened that there was no need for a meeting between the heads of state of China and the United States. He then threatened to impose a 100% tariff on China goods, implement export controls on all key software, and possibly implement export controls on Boeing aircraft parts. The US countermeasures seem scary enough, as if China and the United States are "decoupling and breaking the chain". However, he changed again and changed his tune, saying that the meeting between the heads of state of China and the United States had not been cancelled, and the Sino-US economic and trade negotiations had not entered the final stage. Why did he change his words? He knows how powerful China's new rare earth regulations are, and China has no intention of withdrawing. So he took a step back one after another to leave room for negotiations. The 100% tariff he said, restricting all critical software and Boeing parts, is the way to put extreme pressure on it and the negotiating strategy. He seems to want to talk. China is prepared to be belligerent and peaceful, while the United States is not prepared and does not even expect that China will take the initiative, so the United States seems to have no choice but to talk.
It can be said that China and the United States are now making big moves. These measures taken by the United States will have a great impact on China's economy. For example, key software includes Apple, Android, Windows and other systems that many of us use. So whether the decisive trade battle between China and the United States will head to the battlefield or return to the negotiating table will require close attention in the next 10 days or so. As long as there is news of the meeting between senior Chinese and US foreign ministers, it shows that the Sino-US trade war has hope of returning to the negotiating table. I hope that both sides can sit at the negotiating table. If the trade war continues, it will be "decoupling and breaking the chain", which will cause great harm to both countries.
Author Chen Bing