Fears rise China could weaponise rare earths in US tech war

The US has hit China where it hurts by going after its telecom champion Huawei, but Beijing's control of the global supply of rare earths used in smartphones and electric cars gives it a powerful weapon in their escalating tech war.

A seemingly routine visit by President Xi Jinping to a Chinese rare earths company this week is being widely read as an obvious threat that Beijing is standing ready for action.

"We should firmly grasp the strategic basis of technological innovation, master more key core technologies and seize the commanding heights of industry development," Xi said during the visit, the official Xinhua news agency reported Wednesday.

"Rare earth is not only an important strategic resource, but also a non-renewable resource," he added, in comments likely to further fuel speculation.

However, analysts say China appears apprehensive to target the minerals just yet, possibly fearful of shooting itself in the foot by hastening a global search for alternative supplies of the commodities.

Xi's inspection tour "is no accident, this didn't happen by chance," said Li Mingjiang, China programme coordinator at the S. Rajaratnam School of International Studies (RSIS) in Singapore.

"At this moment, clearly the policy circles in China are considering the possibility of using a rare earth exports ban as a policy weapon against the US."
"The US would be in trouble over a short period of time. But it is unlikely that they (China) want to pour oil on the flames."