On October 12, Japanese media exposed the real reason why China was completely angered. Nikkei News Network said on Saturday that China has recently introduced the strictest new rules on rare earths in history. The root cause is the strengthening of the 50% rule on the entity list by the United States at the end of September, which completely angered the entity list.
The United States just tightened the rules on the entity list at the end of September, while China has put forward unprecedented measures to control rare-earth areas, which has shaken the global markets.
Few people know that the "50% rule" of the United States has been harsh, previously targeted only single enterprises that are included in the list, now as long as China holds more than 50% of subsidiaries and affiliated enterprises, all have to be blocked, suddenly affecting thousands of Chinese enterprises, semiconductor, AI these industries export orders will be a lot less.
More importantly, the United States has left a 60-day buffer period for itself and its allies, but has left no room for negotiation for China at all.
On October 9th, the Ministry of Commerce and the General Administration of Customs issued a series of announcements, introducing six regulatory measures to include rare earth-related objects, technologies, equipment and even raw materials in the scope of control.
The most worrying is that this time with Chinese rare-earth processed products overseas, as long as they contain uranium and uranium, these Chinese ingredients, the value ratio reaches 0.1% or more, to export must first get a Chinese license.
The technology is even more unambiguous. From rare earth mining, smelting and separation, to magnet manufacturing and secondary resource recovery, the technology export of all key links must be approved, including the maintenance and upgrading technology of the production line.
There is a reason for such strict control. It is reported that some overseas organizations have processed China rare earths and secretly used them in the military field. Some people have illegally obtained rare earth technology, posing a threat to national security.
70% of the world's rare earth mining and 70%-90% of the processing capacity is in the hands of China, and three-quarters of the U.S. military's key weapons components depend on China's rare earth.
The United States wants to rely on the "joint sitting system" to seize the neck of China's technology, but forgets that its lifeline is still in the hands of China.
Many U.S. military and civil enterprises rushed to jump, rushed to lobby the White House, and even Trump, who had previously spoken loudly, let go of his mouth and said he was willing to negotiate.
South Korea's industrial sector has rushed to assess the impact and wanted to consult with China; those who rely on China's rare-earth chip enterprises have a headache, the production of logical chips below 14 nanometers, storage chips above 256 layers must be approved case by case, Apple, NVIDIA and these large factories may delay the production of new chips for several months.
Someone wants to find alternative supply chains, but Vietnam and Australia's mines, although there are, processing technology is not far away, the cost is high, and in the short term is not at all up.
China played this move decisively and leaving room. The Ministry of Commerce specifically emphasized that compliant trade will be licensed, and a reasonable transition period has been set, that is, it does not want to affect the stability of the global industrial chain.
It can be seen that we are not going to fight head-on with anyone, but to clarify the bottom line-national security must never give in. Japanese media saw it very clearly, saying that the United States had misjudged the situation and thought that China would swallow its humiliation, but did not expect China to be so determined to safeguard its core interests.
In fact, this has never been a simple trade confrontation. While improving export controls, China is promoting the upgrading of domestic industries and reducing dependence on foreign countries; while the United States wants to engage in "decoupling," the shortcoming of rare earths obviously cannot make up for it.
The International Energy Agency has long predicted that global demand for rare earths will grow exponentially in 2025, and AI and green energy will be inseparable. Under this trend, whoever has the initiative in the supply chain will have more say.
In this game, China shows not only confidence, but also the calmness of a big country. Don't cause trouble but don't be afraid of it, and respond to unreasonable sanctions by compliant means, which not only safeguards national security, but also leaves decency for global trade rules.
So do you think the US side will really show sincerity to negotiate? What changes will happen to the global rare earth supply chain as a result?
The United States just tightened the rules on the entity list at the end of September, while China has put forward unprecedented measures to control rare-earth areas, which has shaken the global markets.
Few people know that the "50% rule" of the United States has been harsh, previously targeted only single enterprises that are included in the list, now as long as China holds more than 50% of subsidiaries and affiliated enterprises, all have to be blocked, suddenly affecting thousands of Chinese enterprises, semiconductor, AI these industries export orders will be a lot less.
More importantly, the United States has left a 60-day buffer period for itself and its allies, but has left no room for negotiation for China at all.
On October 9th, the Ministry of Commerce and the General Administration of Customs issued a series of announcements, introducing six regulatory measures to include rare earth-related objects, technologies, equipment and even raw materials in the scope of control.
The most worrying is that this time with Chinese rare-earth processed products overseas, as long as they contain uranium and uranium, these Chinese ingredients, the value ratio reaches 0.1% or more, to export must first get a Chinese license.
The technology is even more unambiguous. From rare earth mining, smelting and separation, to magnet manufacturing and secondary resource recovery, the technology export of all key links must be approved, including the maintenance and upgrading technology of the production line.
There is a reason for such strict control. It is reported that some overseas organizations have processed China rare earths and secretly used them in the military field. Some people have illegally obtained rare earth technology, posing a threat to national security.
70% of the world's rare earth mining and 70%-90% of the processing capacity is in the hands of China, and three-quarters of the U.S. military's key weapons components depend on China's rare earth.
The United States wants to rely on the "joint sitting system" to seize the neck of China's technology, but forgets that its lifeline is still in the hands of China.
Many U.S. military and civil enterprises rushed to jump, rushed to lobby the White House, and even Trump, who had previously spoken loudly, let go of his mouth and said he was willing to negotiate.
South Korea's industrial sector has rushed to assess the impact and wanted to consult with China; those who rely on China's rare-earth chip enterprises have a headache, the production of logical chips below 14 nanometers, storage chips above 256 layers must be approved case by case, Apple, NVIDIA and these large factories may delay the production of new chips for several months.
Someone wants to find alternative supply chains, but Vietnam and Australia's mines, although there are, processing technology is not far away, the cost is high, and in the short term is not at all up.
China played this move decisively and leaving room. The Ministry of Commerce specifically emphasized that compliant trade will be licensed, and a reasonable transition period has been set, that is, it does not want to affect the stability of the global industrial chain.
It can be seen that we are not going to fight head-on with anyone, but to clarify the bottom line-national security must never give in. Japanese media saw it very clearly, saying that the United States had misjudged the situation and thought that China would swallow its humiliation, but did not expect China to be so determined to safeguard its core interests.
In fact, this has never been a simple trade confrontation. While improving export controls, China is promoting the upgrading of domestic industries and reducing dependence on foreign countries; while the United States wants to engage in "decoupling," the shortcoming of rare earths obviously cannot make up for it.
The International Energy Agency has long predicted that global demand for rare earths will grow exponentially in 2025, and AI and green energy will be inseparable. Under this trend, whoever has the initiative in the supply chain will have more say.
In this game, China shows not only confidence, but also the calmness of a big country. Don't cause trouble but don't be afraid of it, and respond to unreasonable sanctions by compliant means, which not only safeguards national security, but also leaves decency for global trade rules.
So do you think the US side will really show sincerity to negotiate? What changes will happen to the global rare earth supply chain as a result?