At a time of heightened tension in US-China relations, the Chinese Communist Party has expanded the list of mineral resources that related companies must declare, specifically requiring information on critical strategic resources such as rare earths, titanium ores, and graphite. Experts believe that in response to the tariffs and trade sanctions that Trump will likely impose, the CCP is also taking stock and consolidating resources and bargaining chips to counteract. However, the West has long been diversifying mineral resource substitution plans, and China’s confrontation will only accelerate its detachment from the West, resulting in a net loss.
The Chinese Ministry of Commerce website announced on the 6th that the Ministry of Commerce, the National Bureau of Statistics, and the State Administration of Foreign Exchange issued a notice to revise the “Statistical System for Outward Foreign Direct Investment” in January 2022. The document was issued on December 25, 2024, and will become effective on January 1, 2025.
The new revision includes adding indicators such as “Name of affiliated mining project” and “Remaining service life of mines” to the annual report table on “Major foreign mineral resources situation” (FDIN7 table). Newly required metallic mineral resources include rare earths, titanium ores, zirconium ores, and tantalum ores; non-metallic mineral resources include crystalline graphite, amorphous graphite, boron, and fluorite.
The notice states that in the monthly report table on “Basic information on foreign investment and mergers” (FDIY3 table), if the industry category of the merged company is in the “mining industry”, indicators such as “Type of mineral resources” and “Remaining economically recoverable reserves” are added.
The addition of these metallic mineral resources is crucial for the production of smartphones, electric vehicles, and defense systems, with rare earths being a key raw material in today’s manufacturing industry.
In recent years, China’s control over the mining and processing of rare earths has raised concerns among Western countries. Researchers from the US government are working on analyzing mineral deposits worldwide to assess the progress of increasing rare earth supplies outside of China.
A 2022 report from the US Geological Survey on rare earths indicated that China is the world’s largest producer of rare earths and has the top reserves globally. The US rare earth reserves saw a significant increase from 1.8 million tons in 2021 to 2.3 million tons, while the rare earth production in 2022 was 43,000 tons, ranking second globally.
With Trump set to take office as US President on January 20th, it is expected that competition between Beijing and Washington will intensify.
In September last year, the Chinese Ministry of Commerce began implementing export controls on “certain antimony and super hard materials”, and in December, it announced a ban on exporting key minerals and materials including gallium, germanium, and antimony to the US, extending its domestic law beyond its borders for the first time and prohibiting other countries from selling certain goods to the US.
At the beginning of the new year in 2025, the Chinese Ministry of Commerce issued another notice suggesting restrictions on the export of some technologies used for manufacturing battery components and processing key minerals lithium and gallium. Lithium and gallium are metals commonly used in rechargeable batteries and semiconductors.
Chinese Foreign Minister Wang Yi recently visited four countries, including the Democratic Republic of the Congo in Africa. According to Reuters, Beijing’s move aims to consolidate and expand China’s influence in this resource-rich continent of Africa.
Shen Mingshi, Associate Professor at the Institute of Strategy at Tamkang University in Taiwan, told Epoch Times that due to Trump’s potential implementation of tariffs and trade sanctions against China, the CCP is also taking stock and consolidating resources and bargaining chips to use as decision-making basis in its confrontation with the US, especially in the field of rare earths where the US reliance is very high.
“The CCP must have a clear understanding of its own bargaining chips to have the confidence to confront or negotiate with the US. However, the issue lies in whether China can fully control the mining resources of these countries overseas. If these countries are unable to counterbalance US tariffs or diplomatic pressures, even if mined by Chinese mining companies, if they turn to the US to sell mineral resources, China’s retaliation and boycott will be weak and ineffective,” Shen Mingshi said.
He also mentioned that China has long imposed control over rare earths from the US, Japan, and other countries that have expanded alternative supply channels. In the near future, the US has emphasized making Greenland part of US territory – apart from military or strategic warning considerations, Greenland’s abundant mineral resources are also a major factor.
Trump recently announced his intention to acquire Greenland in the coming weeks. Greenland’s land area is three times the size of the US state of Texas, with rich rare earth deposits and occupying a strategic position.
Su Ziyun, Director of the Institute of National Defense Strategy and Resources in Taiwan, told Epoch Times that what China must deal with is the US and the West’s technological warfare against it, from Beijing’s perspective, it is about cutting off the fuel, meaning the rare earths necessary for technological equipment cannot be given to the West.
However, Su Ziyun stated that as early as the 2012 Diaoyu Islands sovereignty dispute between China and Japan, the deliberate increase in rare earth export prices by China had a significant impact on the global technology industry, leading Western countries to start shifting away from the red supply chain. After nearly three years of effort, there are now several alternative solutions:
“First, some Western countries have begun to restart rare earth reserves, such as Vietnam, where new rare earth deposits have been found in Europe; second, finding new (alternative) sources, including Japan refining some rare earth materials from seawater; third is recycling, recovering rare metals and rare earths from scrapped electronic equipment; fourth is redesigning to reduce the demand for rare earths in future technological equipment.”
He believes that Beijing’s proactive tightening measures will only stimulate the West to further detach from China in terms of resources, which is actually a losing proposition. It may bring short-term tactical effects, but in the long run, it is disadvantageous for Beijing. At the same time, with Trump back in office, technology policies will tighten further, bringing structural impacts to China’s development of the so-called new qualitative fighting power or new qualitative economy.
Ye Yaoyuan, a professor at the University of St. Thomas in the United States, told Epoch Times that China has weaknesses in the development of critical resources: the Chinese regime is a non-democratic country, the government lacks legitimacy, and it is not a free market economy, which would undermine business creativity.