China restricting rare earth resources to get access to advanced semiconductors of US: Jefferies

Time of India

3 days ago

New Delhi: China's recent restrictions on rare earth resources are being seen as a response to US export controls on advanced semiconductor technology, according to a report by
Jefferies
.
The report highlighted that China is taking a strong stance because it wants access to advanced US semiconductors, which are crucial for upgrading its economy.
It said, "US needs China's rare earth resources just as much, if not more so, as China wants access to US
advanced semiconductors
".
Jefferies noted that the United States needs China's rare earth materials just as much, if not more, than China needs American semiconductors. These
rare earth elements
are essential for the production of many high-tech devices and defence equipment.
As per the report, Beijing views US restrictions on the export of technology products as an economic attack, as it blocks China from advancing its tech sector. The Jefferies agrees with this view.
It added that the semiconductor export restrictions also harm America's own national interests. This is because the ban has cut off American tech companies from one of their largest customers, China.
Additionally, the restrictions have pushed China to speed up efforts to develop its own semiconductor technologies, reducing its future reliance on US firms.
The rare earth issue is also seen as a reminder to the US national security establishment that America may not have as much leverage over China as previously thought.
At the same time, China has denied making any specific promises about rare earth exports during recent discussions in Geneva.
Jefferies also pointed out that China's Ministry of Commerce defended the export controls by stating that "implementing export controls on items with clear dual-use military and civilian attributes is a common international practice."
The report concludes that it is unrealistic for Washington to expect China to ease restrictions on rare earths unless the US also lifts some of its tech export curbs. China views mutual respect and reciprocity as essential in global trade, and the current actions by the US do not reflect that spirit.