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China Weaponizes Supply Chain with Strategic Export Controls, Mirroring US Sanctions
China’s export license system targets rare earths & tech components, giving Beijing new power in trade disputes with the US. The move echoes American sanctions but with sharper precision.
ND
by News Desk
2025-06-06
China Weaponizes Supply Chain with Strategic Export Controls, Mirroring US Sanctions

China has been quietly developing a sophisticated export control system modeled closely on American sanctions, aiming to weaponize key segments of the global supply chain. The system allows Beijing to exercise unprecedented control and insight into critical materials and technology exports, including rare earth magnets vital to industries like electric vehicles and advanced weaponry.

This strategy gained renewed attention recently amid a scramble by global industries for export licenses on rare earth elements following escalating US-China trade tensions. A high-profile phone call between US President Donald Trump and Chinese leader Xi Jinping underscored the importance of these controls, although it remains unclear whether China committed to speeding up export approvals.

China dominates global rare earth production—mining around 70% of the world’s supply and refining nearly all of it. Its April 2024 decision to place sophisticated rare earth magnets on a new export control list forced all exporters to apply for licenses, centralizing power in a small department within China’s commerce ministry. This move created a chokepoint in global manufacturing, affecting European automakers and Japanese suppliers who rely on China’s controlled exports to maintain production.

Industry analysts note that while China is showing signs of approving more export licenses, it is unlikely to dismantle or loosen the system, which grants Beijing unprecedented insight into how rare earths and related technologies flow through supply chains worldwide—a capability other governments lack.

Experts see China’s approach as a “scalpel” designed to exert influence and gain leverage over the United States and other trade partners without overtly provoking accusations of deliberate trade manipulation.

The roots of this tactic date back decades, notably China's temporary 2010 rare earth export ban on Japan during a territorial dispute and former leader Deng Xiaoping’s 1992 acknowledgment of China’s strategic position as the “Middle East of rare earths.” The 2020 Export Control Law broadened Beijing’s ability to control exports on grounds of national security, encompassing critical goods, technologies, and data.

In retaliation for US restrictions on semiconductor sales to China, Beijing expanded controls on critical minerals like gallium, germanium, and graphite—banning some exports to the US altogether. Further restrictions on metals essential to defense and clean energy industries followed in early 2024.

Tracking China’s export approval pace remains difficult, as approval data is not public and companies avoid confirming details due to sensitivity. Nonetheless, analysts view China’s export control regime as a long-term strategic weapon shaping the global tech and manufacturing landscape amid escalating US-China rivalry.

 
Tagged:

ExportControls

ChinaTradeWar

SupplyChainControl

RareEarthElements
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