After U.S. Commerce Secretary Raimondo asked Japan, South Korea and the European Union to continue to expand chip restrictions on China, China chose an area that the West could not resist and hit back hard.
According to the Global Times, on June 30, China announced the "Regulations on the Management of Rare Earths", which make it clear that rare earths are owned by the state and the state implements protective mining of rare earth resources, which will come into force on October 1. At present, there are still illegal mining, illegal smelting and separation, and unindexed production and export in China's rare earth field, which leads to vicious internal competition, thus making China's rare earths "priceless" and cheap to the West. After the promulgation of the Regulations, it will effectively protect the development of rare earths, because it is a matter of China's national security. In this regard, we will talk about three topics.
The first one, before the neck of the United States and Europe, first taste what it is like to be stuck in the neck.
In the context of the United States and Europe trying to control China in the field of semiconductors, China's sudden legislation on the development and export of rare earths has obviously hit the key point of Western countries. Because for the United States and European countries, although you can produce advanced chips, rare earths are the most critical raw materials for the production of chips, and American and European companies still rely on imports from China. Therefore, before you get stuck in China's neck, you must first feel what it is like to be "stuck in the neck" by China.
According to the data, China is the country with the largest rare earth reserves in the world, known as the "rare earth kingdom", accounting for about 40%, and 44 million tons have been proven. China is not only the largest country in terms of reserves, but also the largest producer. Moreover, sufficient reserves and high production are only one aspect, because rare earths are not usable and need to be refined and purified, and China's "purification" level is also the world's first, and other countries want to reach China's current level, I am afraid it will take at least 20 years.
That is to say, if China controls the export of rare earths, and then locks the "purification" technology, Western countries can only stare dryly, even if they have advanced chip production technology, advanced equipment, but it is difficult for a clever woman to cook without rice, and the key raw materials are gone, so what can be used to make chips?
Of course, China's introduction of rare earth management regulations is not to restrict the export of rare earths, but to make the mining, production and export of rare earths more in line with China's national interests. It is said that in addition to clarifying that rare earth resources are owned by the state, the "Regulations" also require the determination of rare earth mining enterprises and rare earth smelting and separation enterprises, and other organizations and individuals shall not engage in it; the total amount of rare earth mining and smelting separation; Establish a product traceability system and strict circulation management.
Second, rare earths are known as "industrial monosodium glutamate", and the demand in the United States and Europe is particularly large.
The German media believes that China needs to better protect rare earths, because this is a national security issue. According to Bloomberg, Reuters and other media outlets, China is a major supplier of refined materials such as rare earths, lithium and graphite, which are essential for high-tech manufacturing and the green energy transition. According to Reuters, the demand for rare earths in the EU is expected to grow exponentially by 2030. Moreover, there are currently no operating rare earth mines in Europe, and the largest rare earth deposit in Europe discovered in Norway to date will not be officially mined until 2030.
Although the United States has strengthened the "de-risking" of the introduction of critical minerals in recent years, it has not mined rare earths locally, but has introduced 100% of them to foreign countries. At the time, up to 80% of US rare earths were imported from China, and now there are improvements, and alternative deposits are being found in China and Australia, but the dependence on Chinese rare earths is still as high as 70%. Moreover, it has to rely on China's "purification" technology.
After seeing these data, we don't understand a little bit, where did the United States and Europe get the confidence to dare to block China in the semiconductor field? Dare to engage in an export blockade of China on chip products? If China wants to retaliate, it can completely take a salary from the bottom of the kettle and "get stuck" in the export and purification of rare earths, so that the United States and Europe know what it means to be countered. So, how important are rare earths?
In addition to anything else, in the military field alone, rare earths can greatly improve the tactical performance of steel, aluminum alloys, magnesium alloys, and titanium alloys used in the manufacture of tanks, aircraft, and missiles. For example, for every F-35 fighter produced by the United States, it needs 400 kilograms of rare earths; The production of one Arleigh Burke-class destroyer requires 2,300 kilograms of rare earths; The production of a Virginia-class nuclear submarine requires 4100 kg of rare earths. If there are no Chinese rare earths for American military companies such as Loma, Boeing, Raytheon, and Grumman, how can they create advanced weapons?
Moreover, rare earths are also lubricants for electronics, lasers, nuclear industry, superconductivity and many other high-tech lubricants. Don't look at the small chip, but to successfully manufacture a chip, it takes hundreds of processes, and it is inseparable from the "seasoning" of rare earths.
Third, China holds the trump card of rare earths, why not cut off supplies to the West?
I have to say that this is a problem in terms of the overall strategic layout. First, China's rare earth reserves are the largest, the largest production, purification technology is also unique, if the domestic industrial chain is standardized, jointly deal with the external market, the export of rare earth is conducive to national interests, to which countries to export, at what price to export, what technology to provide, etc., are determined by China, can be so, and why choose "cut off supply"?
Second, and more importantly, if the United States mines and refines rare earths by itself, the cost will reach several times that of importing from China. In this way, after 10 years, 20 years, or even 30 years, the United States has not established a complete rare earth industry chain, and can only rely more on China.
Now, realizing that the United States cannot rely too much on China for critical raw materials, it has begun to look for alternatives from its allies, but in the field of rare earths, it is not easy. First, China, Russia, Brazil, etc., which have large reserves, are not allies of the United States; Second, purification technology is not something you want to have, and you can solve it immediately.