China’s recent decision to impose export restrictions on two minerals used in semiconductors, solar panels, and missile systems goes beyond a mere trade maneuver.

It serves as a stark reminder of China’s significant control over global mineral resources and signifies its readiness to employ them in the escalating rivalry with the United States.

Approximately two-thirds of the world’s lithium and cobalt, crucial for electric cars, undergo processing in China, the Wall Street Journal has reported.

The country is responsible for nearly 60% of aluminum production, which is also utilized in electric vehicle (EV) batteries, as well as 80% of polysilicon, a key component in solar panels.

Moreover, China exercises an even tighter grip on rare-earth minerals that are essential for vital technologies such as smartphone touch screens and missile-defense systems, accounting for 90% of their refining, as reported by the International Energy Agency.

Chinese companies often control the processing of these minerals even when it occurs outside China.

While a significant portion of the world’s nickel supply originates directly from China, Chinese firms also possess substantial refining capacity in other locations like Indonesia and Papua New Guinea.

On Friday, U.S. Treasury Secretary Janet Yellen informed American businesses operating in China that the Biden administration was still evaluating China’s announcement on Monday to restrict the export of gallium and germanium.

Yellen emphasized that this move underscores the criticality of diversified supply chains.

Written by staff