A plunge in China’s rare earth exports last month has fanned speculation over whether Beijing has been curbing overseas shipments of the raw materials to inflict pain on its trade partners, but an industry association official says the decline in such exports is more of a result of coronavirus shock than a deliberate effort to cut off supplies. Chen Zhanheng, a deputy general secretary at the China Rare Earth Industry Association, an industry group of domestic rare earth companies, said the drop in July’s rare earth exports has led to rumours about whether China is weaponising rare earths in trade. “Some people attributed it to geopolitical factors. That is actually not the case,” Chen said. “The foremost factor should be the pandemic, which led to weak external demand [for rare earth minerals].” China exported 1,620 tonnes of rare earth elements last month, a drop of 69.1 per cent from a year earlier and down 44 per cent from June, according to Chinese customs data. Digging in on rare earth, the next front in the US supply chain war with China China’s rare earth exports to the United States dropped 35.2 per cent from a year earlier to 5,184 tonnes in the first half of the year, according to data from the China Rare Earth Industry Association. Rare earth metals , a suite of 17 elements, are crucial to important technological applications ranging from electric cars and smartphones to satellites, lasers, fighter jet engines and missiles. China owns 36.7 per cent of global reserves and is the world’s largest producer and exporter. The country’s output last year accounted for 62.8 per cent of the world’s total, according to the US Geological Survey. The United States imported about 80 per cent of its rare earths from China from 2015-2018. But after seeing the risks of relying on China for supplies, the US last year restarted operations at the Mountain Pass mine in California, with output lifted to 26,000 metric tonnes in 2019. Japan moves to secure rare earths to reduce dependence on China The rising calls on rare earth trade came as the escalating rivalry between the world’s two largest economies has fuelled concerns over economic decoupling and a new cold war. As the US is launching sanctions against Chinese technology companies and threatening to punish Chinese financial institutions, there are voices in China saying the country can take countermeasures by restricting rare earth exports to the US. Beijing briefly used rare earths as a geopolitical weapon against Tokyo in 2010, in a territorial dispute over the Diaoyu Islands in the East China Sea, but it was a misfire. The Japanese responded by building a rare earth supply chain outside China, and the Chinese share of rare earth production dropped from more than 95 per cent of the world’s supply in 2010 to around 70 per cent in 2018. China also enhanced its control over rare earth exports in the early 2010s in name of environmental protection. China’s policies on rare earth export control were challenged by its trade partners at the World Trade Organisation, and the Geneva-based body ruled in 2014 that China’s policies of collecting export duties and imposing quotas on rare earths violated trade rules. Mei Xinyu, a senior fellow with the Ministry of Commerce’s research institute, also pointed to weak demand overseas for the materials. “China should maintain its status as a reliable supplier unless it is engaged in a war,” he said. “Unlike the US, which often threatens sanctions or supply cuts, China should be a responsible country to maintain order in global trade in such an uncertain time.” The vast majority of China’s mining and production capacity is controlled by six state-owned enterprises, including Northern Rare Earth Group, China Minmetals and Aluminum Corporation of China .