14-05-2025
- Business
- South China Morning Post
How China is adeptly playing the ace up its sleeve, rare earth minerals, in US trade deal
Beijing's moderate relaxation of export controls on some rare earths – raw materials essential in hi-tech and aerospace hardware – as part of a trade truce with the US reflects China's goodwill in striving to de-escalate tensions even as it remains firmly in control of those critical metals, according to analysts.
Advertisement
On Monday, Beijing agreed to pause or remove all non-tariff countermeasures imposed
since April 2 , alongside the lowering of most tariffs imposed by the two countries, for 90 days, from today.
The deal implicitly indicates a scrapping of
China's April 4 curbs on exports of seven rare earth metals classified as 'medium and heavy', with earlier restrictions on other critical minerals remaining in place.
The current tariff truce and pausing of non-tariff countermeasures serves as a strategy to give the US some breathing room, said Wang Xiaosong, an economics professor at Renmin University.
'By loosening restrictions moderately now, [China is] adopting a kite-flying strategy: neither letting the string snap nor allowing the kite to soar out of control,' Wang said. 'This avoids provoking the opponent into desperate measures that could actually help the US break free from China.'
Advertisement
Following China's curbs on April 4, prices of some 'medium and heavy' rare earth elements surged by more than 200 per cent in the overseas market, according to a research note by Zhongtai Securities on May 11.
