Rare earths ceroxide, yttrium oxide and neodymium oxide. Photo: dpa

When US President Donald Trump’s administration ratcheted up trade tensions several weeks ago, hiking tariffs on Chinese goods and threatening to put tariffs on all imports from the country, attention quickly turned to potential responses from Beijing.

As China buys far fewer goods from the US than vice versa, it has limited options for retaliating in kind with import tariffs. Beijing could retaliate, analysts warned, by encouraging a boycott of US consumer products or creating regulatory hurdles for companies that rely on the Chinese market.

But focus shifted to another option on Monday, after a visit by Chinese President Xi Jinping to a rare-earth elements producer in the southern province of Jiangxi. Rare earths are an essential resource for manufacturing many high-tech products, and China accounts for the vast majority of US imports of the commodity.

Xi’s public appearance at the company came after the state-run Global Times speculated last week that China could leverage its position as a key producer of the elements. The editorial stopped short of suggesting that Beijing might cut off exports to the US entirely, pointing out that such a move would risk escalating tensions further.

But that was before the Trump administration announced on Friday that it would restrict exports of critical components to Chinese telecommunication firm Huawei.

Xi used the event to invoke the spirit of the “Long March” in the context of the US-China trade war, referencing the harrowing 1930s retreat of the Red Army that began in Jiangxi province and paved the way for Mao Zedong’s rise to power.

The tour was the Chinese president’s first since the trade talks with the US were derailed several weeks ago.

Notably, Vice-Premier Liu He appeared by Xi’s side, a strong public display of confidence in China’s top negotiator in trade talks with the US.

Foreign Ministry spokesman Lu Kang played down the significance of Xi’s visit.

“It’s only normal for the Chinese leader to pay a domestic visit and study relevant industrial policy. I hope you will not over-interpret that,” Lu said.

While Chinese rare-earths producers are looking to up their game, the US is looking to get back into the game, according to a report on Monday.

US chemicals company Blue Line is teaming up with Australian miner Lynas to build a rare-earth materials production plant in Texas, The Wall Street Journal reported.

The companies said the project would create the only large-scale producer of medium and heavy rare earths outside of China.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now. 

Join the Conversation

28 Comments

  1. Unquestionably imagine that which you said.
    Your favourite reason seemed to be at the internet the simplest thing to understand of.
    I say to you, I certainly get irked whilst people consider
    issues that they just don’t realize about. You controlled to hit the nail upon the top as smartly
    as outlined out the entire thing with no need side-effects , other people could take a
    signal. Will probably be again to get more. Thank
    you

  2. Its like you read my mind! You appear to know so much about this, like you wrote the book in it
    or something. I think that you can do with a few pics to drive the message home a little bit, but instead
    of that, this is magnificent blog. A fantastic read. I will certainly be back.

  3. Hey! I’m at work browsing your blog from my new iphone!
    Just wanted to say I love reading through your blog and look forward to all your posts!

    Keep up the great work!

  4. I’d like to thank you for the efforts you’ve put in penning this blog.
    I really hope to see the same high-grade blog posts by you later on as well.
    In truth, your creative writing abilities has encouraged me to get my very own website now 😉

  5. You actually make it appear so easy along with your presentation but I in finding this topic to be really something which I feel I’d never understand.
    It seems too complicated and extremely huge for me.
    I am looking ahead in your next publish, I’ll try to get the grasp of it!
    natalielise plenty of fish

  6. Oh my goodness! Amazing article dude! Thank you so much, However I am
    going through difficulties with your RSS. I don’t understand why
    I cannot subscribe to it. Is there anyone else having the same RSS issues?

    Anybody who knows the answer will you kindly respond?
    Thanks!!

  7. Hi! This post couldn’t be written any better! Reading through this post
    reminds me of my good old room mate! He always kept chatting about this.
    I will forward this article to him. Pretty sure he will have a good read.
    Many thanks for sharing!

  8. I don’t know whether it’s just me or if perhaps everybody
    else encountering problems with your blog. It appears
    as though some of the text within your posts are running off the screen. Can somebody else please comment
    and let me know if this is happening to them as well? This may be a issue with my internet browser because I’ve had this happen before.
    Thank you

  9. Hey I know this is off topic but I was wondering if you knew
    of any widgets I could add to my blog that automatically tweet my newest twitter updates.
    I’ve been looking for a plug-in like this for quite some time and was hoping maybe you would have some experience
    with something like this. Please let me know if you run into anything.
    I truly enjoy reading your blog and I look forward to
    your new updates.

  10. Hello there! This blog post couldn’t be written any better! Going through this post reminds me of my previous roommate! He continually kept preaching about this. I will forward this post to him. Fairly certain he’s going to have a good read. Thank you for sharing!

  11. Thanks for some other informative blog. Where else could I get that type of
    information written in such a perfect approach? I’ve a undertaking
    that I am simply now operating on, and I have been on the look out for such information.

Leave a comment

Your email address will not be published. Required fields are marked *