China raises rare earth quotas in ‘goodwill trade signal’ to US
- Chinese companies allowed to increase output by more than a quarter amid reports that Beijing could aim export restrictions at US
- Biden administration should take message seriously, analyst says
The Ministry of Industry and Information Technology and the Ministry of Natural Resources announced on Friday that first-half output for the minerals could increase by more than a quarter to 84,000 tonnes, up from 66,000 tonnes at the same time last year.
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Amid US-China trade war, China aims to elevate its domestic rare earth industry
China is the top rare earth producer, accounting for over 60 per cent of the world’s output.
It strictly controls mining and refining, with the two ministries setting quotas twice a year for the six main state-owned producers. Production without a quota is banned.
The substantial increase in the quota is a gesture of Beijing’s willingness to work with the West, particularly the US, on trade, according to Wang Yong, director of Peking University’s Centre for International Political Economy.
“The Biden administration should take the message seriously, that China hopes to maintain a stable and mutually beneficial trade relationship and repair ties,” Wang said.
“But if the US side continues its economic sanctions and blocks on technology, rare earth supply will still be in the toolbox.”