China Gears Up to Weaponize Rare Earths in Trade War

(Bloomberg) -- Beijing is gearing up to use its dominance of rare earths as a counter in its trade battle with Washington, according to a salvo of media reports in China that included hints from the state planning agency. Stocks of producers surged.

[OCS: To be valuable, rare earth minerals must be mined, refined, and then used in products that someone wants to purchase. Even if the United States is in a so-called “trade war,” most of the fabrication facilities are in Asia and no subject to Chinese tariffs.

Additionally, China is close to a recession, an event the Chinese people have not had to face for at least 40 years and when the stability of the nation is threatened, so will be the leadership of President Xi Jinping who would like to remain in a leadership role until he voluntarily retires or dies in office.]

The U.S. shouldn’t underestimate China’s ability to fight the trade war, the People’s Daily, a flagship newspaper of the ruling Communist Party, said in an editorial Wednesday that used some historically significant language on the weight of China’s intent.

[OCS: I hate it when the media refers to the ongoing negotiation as a “trade war.” Yes, it is about opening up Chinese markets to American goods – but it is more about curtailing the rampant theft of U.S. military and commercial intellectual property. Both sides of the negotiation have their self-serving drama queens and routinely talk tough for domestic consumption.]

The newspaper’s commentary included a rare Chinese phrase that means “don’t say I didn’t warn you.” The specific wording was used by the paper in 1962 before China went to war with India, and “those familiar with Chinese diplomatic language know the weight of this phrase,” the Global Times, a newspaper affiliated with the Communist Party, said in an article last April. It was also used before conflict broke out between China and Vietnam in 1979.

[OCS: I can just imagine Donald Trump asking the Chinese what they might do if their access to U.S. financial markets was slowed down or impeded? There are any number of diplomatic, military, and commercial tools in Trump’s basket. Unfortunately, there are those in Congress like Nancy Pelosi and others who have strong commercial relationships with China and who might seriously collude with our enemies to disadvantage Donald Trump prior to the 2020 election.]

On rare earths specifically, the People’s Daily said it isn’t hard to answer the question whether China will use the elements as retaliation in the trade war.

China is “seriously” considering restricting rare earth exports to the U.S. and may also implement other countermeasures, the editor-in-chief of the Global Times, said in a tweet. An official at the National Development & Reform Commission told CCTV that people in the country won’t be happy to see products made with exported rare earths being used to suppress China’s development.

Editorials in the Global Times and Shanghai Securities News took similar tacks in their Wednesday editions.

[OCS: These are not independent news sources and are every bit as much the propaganda arm of the Red Chinese as Pravda is of Russia, and the New York Times is of the Democrat Party.]

The nation’s producers have rallied hard in recent weeks on the view that rare earths could be an ace in the trade war. President Xi Jinping visited a plant earlier this month, accompanied by his chief trade negotiator with the U.S., fueling speculation that the strategic materials could be weaponized in China’s tit-for-tat with the U.S.

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