China’s rare-earth restrictions aim to beat US at its own game

Over the past three years, Washington has claimed broad power to impose global rules that bar companies anywhere in the world from sending cutting-edge computer chips or the tools needed to make them to China.

- ANA SWANSON & MEAGHAN TOBIN

American officials have argued that approach is necessary to make sure China does not gain the upper hand in the race for advanced artificial intelligence.

But a sweeping set of restrictions announced by Beijing last week showed that two can play that game.

The Chinese government flexed its own influence over worldwide supply chains when it announced new rules clamping down on the flow of critical minerals that are used in everything from computer chips to cars to missiles. The rules, which are set to take effect later this year, shocked foreign governments and businesses, which may now need to acquire licenses from Beijing to trade their products even outside China.

With its dominance over the production of these rare earth minerals and its control of other strategic industries, China may have an even greater ability than the US to weaponise supply chains, analysts say.