My Take | Asia EV and green sectors need to navigate around US-China rare earth row by focusing on technology
- China’s move to curb rare earth exports could affect Asian economies’ plans to develop their clean energy sectors such as EV
- These economies need to focus on technology and other supportive measures in these sectors to increase their self-reliance
China said last week it will curb the export of technologies including the processing of rare earths and magnets, which are key to the manufacture of green products such as EVs and wind turbines. Beijing’s move comes as the White House is reportedly weighing imposing higher tariffs on EVs to curb China’s dominance in the EV sector - China is the world’s largest EV manufacturer as well as the sales market for the vehicles.
The trade row between the world’s two largest economies spells bad news for Asia’s fledgling clean energy industries.
While the new rules imposed by China - the world’s most dominant rare earth supplier - will not affect shipments, the restrictions could create hurdles for other countries by adding to the costs of developing technology to grow their green industries.
If the US were to impose EV-related tariff hikes against China and in turn worsen their trade row, Asian firms would be adversely affected as many of them are dependent on Chinese technology and parts for EVs, and this could also lead to a reduction in sales in the crucial American market.