China ready to hit back at US with rare earths: Reports , Latest World News - The New Paper

China ready to hit back at US with rare earths: Reports

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Media reports strongly imply Beijing will restrict export of materials vital in many US industries

BEIJING: China is ready to use rare earths to strike back in a trade war with the US, Chinese newspapers warned yesterday in commentaries on a move that would escalate tensions between the world's two largest economies.

Chinese President Xi Jinping's visit to a rare earths plant last week had sparked speculation that China would use its dominant position as an exporter of rare earths to the US as leverage in the trade war.

Rare earths are a group of 17 chemical elements used in everything from high-tech consumer electronics to military equipment. The prospect that their value could soar as a result of the trade war caused sharp rises in the share prices of producers.

While China has not explicitly said it would restrict rare earths sales to the US, Chinese media has strongly implied this will happen.

In a commentary headlined "United States, don't underestimate China's ability to strike back", the official People's Daily noted the US' "uncomfortable" dependence on rare earths from China.

"Will rare earths become a counter weapon for China to hit back against the pressure the US has put on for no reason at all? The answer is no mystery.

"Undoubtedly, the US side wants to use the products made by China's exported rare earths to counter and suppress China's development. The Chinese people will never accept this," the ruling Communist Party newspaper added.

"We advise the US side not to underestimate the Chinese side's ability to safeguard its development rights and interests. Don't say we didn't warn you."

The expression "don't say we didn't warn you" is generally used only by official Chinese media to warn rivals over major areas of disagreement.

In its own editorial yesterday, sister paper the Global Times said an export ban on rare earths "is a powerful weapon if used in the China-US trade war".

"Nevertheless, China will mainly use it for defence," it added, noting while China might incur losses from a ban on exports, the US would suffer more.

The paper's editor had said on Twitter late on Tuesday that Beijing was "seriously considering" restricting rare earth exports to the US.

Chinese trade experts say if Beijing moves forward with new restrictions on rare earth exports to the US, it will likely follow Washington's example and use national security as a justification.

China has repeatedly criticised the US for what it says are abuses of national security exceptions at the World Trade Organisation, including this week when, according to media reports, it accused the US of breaking rules by blacklisting Huawei Technologies.

But China for years has used national security considerations to block major US technology companies, including Google and Facebook, from operating in its market.

Such restrictions have fuelled calls from within some parts of the US business community for Washington to pursue more reciprocal policies with Beijing.

China accounted for 80 per cent of rare earth imports between 2014 and 2017 by the US, which has excluded them from recent tariffs along with other critical Chinese minerals. - REUTERS