China Reviewing Regulations on Export of Manufacturing Technology for Two Types of Rare Earth Elements
Part of retaliation for US semiconductor regulation… Korea’s dependence on Chinese imports of rare earths 87%
Government aims to reduce dependence on China by 50% by 2030
Maeil Daily = Reporter Lee Sang-rae | China is weaponizing rare earth elements to retaliate once morest US semiconductor regulations. The ‘rare earth risk’ from China, which the industry has been concerned regarding, has risen to the surface. As ‘resource nationalism’ expands globally, diversification of key mineral supply chains in the direction of reducing dependence on China is emerging as an urgent task for the industry.
According to the industry on the 9th, the Chinese government is taking out a card called ‘rare earth weaponization’ to retaliate once morest the US semiconductor export regulations.
The Chinese government is reviewing a ban on exports of ‘rare earth magnets’, a key material for high-performance motors used in electric vehicles (EVs) and aircraft. China’s export ban on rare earth magnets is interpreted as retaliation for the United States, Japan, and the Netherlands’ restrictions on semiconductor exports to China.
In fact, the Chinese government recently requested the World Trade Organization (WTO) to conduct investigations and strengthen monitoring of semiconductor export regulations in the three countries. At the WTO Commodity Trade Council meeting held on the 3rd and 4th, the Chinese representative said, “It goes once morest the WTO’s principles of fairness and transparency, and undermines its authority and effectiveness,” regarding the three countries’ semiconductor-related export restrictions, and “clearly recognized the possibility of violating WTO rules.” are doing,” he said.
This is not the first time China has taken out the card of ‘weaponizing rare earths’. China restricted rare earth exports to Japan in 2010. It is a retaliatory measure following the dispute between Japan and the Senkaku Islands. After that, China strongly pulled out the rare earth card when the trade war with the United States reached its peak in 2019 under President Donald Trump.
China is strengthening central government control over rare earth resources. In 2021, it launched the ‘China Rare Earth Group’, which integrated three state-owned rare earth companies and two national research institutes. It gave 70% of rare earth production to the China Rare Earth Group, which is controlled by the central government.
Recently, as the United States’ semiconductor export regulations have been in full swing, China has threatened once more with rare earths. “China is the only country that can extract samarium cobalt,” said a high-ranking official of the China Rare Earth Group in the Global Times, a Chinese state-run newspaper, in October of last year.
Samarium cobalt and neodymium are the permanent magnets that China is pushing for export restrictions on manufacturing technology this time. All are core parts of motors and are essential for electric vehicles and power generation.
If China starts restricting manufacturing technology exports, Korean industries will inevitably suffer damage. According to the Korea International Trade Association, China accounted for 87.9% of Korea’s imports of permanent magnets, such as samarium cobalt and neodymium, last year.
In the industry, it is pointed out that it is necessary to speed up diversification of key mineral supplies by reducing dependence on China. In fact, in February, the government announced a “strategy to secure core minerals” to reduce its dependence on Chinese imports of key minerals such as lithium, cobalt, graphite, and rare earth elements to the 50% level by 2030. As part of the ‘Strategy for Securing Key Fruits,’ Cheon Young-gil, head of the Energy Policy Department at the Ministry of Trade, Industry and Energy, visited the Onsan Refinery of Korea Zinc, the world’s No. 1 lead and zinc producer, on the 5th. Korea Zinc proposed to the Ministry of Trade, Industry and Energy for measures to revitalize core mineral smelting and processing facilities and resource recycling projects in Korea.
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