China is exploring limiting the export of rare earth minerals that are crucial for the manufacture of American F-35 fighter jets and other sophisticated weaponry, according to people involved in a government consultation. The Ministry of Industry and Information Technology last month proposed draft controls on the production and export of 17 rare earth minerals in China, which controls about 80 per cent of global supply.
Industry executives said government officials had asked them how badly companies in the US and Europe, including defence contractors, would be affected if China restricted rare earth exports during a bilateral dispute. “The government wants to know if the US may have trouble making F-35 fighter jets if China imposes an export ban,” said a Chinese government adviser who asked not to be identified. Industry executives added that Beijing wanted to better understand how quickly the US could secure alternative sources of rare earths and increase its own production capacity.
Sino-US relations and an emerging technology war between the two countries. The Trump administration tried to make it harder for Chinese companies to import sensitive US technology, such as high-end semiconductors. The Biden administration has signalled that it would also restrict certain exports but would work more closely with allies.
Beijing’s control of rare earths threatens to become a new source of friction with Washington but some warn any aggressive moves by China could backfire by prompting rivals to develop their own production capacity. In a November report, Zhang Rui, an analyst at Antaike, a government-backed consultancy in Beijing, said that US weapons makers could be among the first companies targeted by any export restriction.
China’s foreign ministry said last year it would sanction Lockheed Martin, Boeing and Raytheon for selling arms to Taiwan, the self-ruled island that Beijing claims as its sovereign territory.