China pledges to crack down on illicit exports of rare earths, urges US to lift more trade controls

BANGKOK AP China s state safety agency says it is cracking down on alleged smuggling of rare earths minerals that it says threaten national protection just weeks after Beijing and Washington agreed to make it easier for American firms to obtain from China those materials which are critical for manufacturing and computer chip production In a review published Friday in the state-run newspaper Global Times the Ministry of State Assurance declared foreign espionage and intelligence agencies were colluding to steal rare earths-related goods by repackaging and relabeling rare metals to hide their Chinese origin In several cases the minerals were falsely declared as non-controlled items mislabeled as such things as solder paste mixed into other materials like ceramic tiles or hidden in plastic mannequins or bottled water it disclosed It referred only to an unnamed certain country that it stated lacked the limit to make and refine its own rare earths Investigations had located Chinese criminals were involved exploiting shipping and delivery channels to evade controls on exports of the materials used in various high-tech applications including electric bicycle batteries it stated The crackdown followed a account by Reuters earlier this month detailing how rare earths were being transshipped to the U S via Thailand and Mexico China is the main source for numerous strategically vital rare earths and it has moved to slow exports of such minerals in retaliation for steep import duties President Donald Trump has imposed on Chinese goods since he returned to the White House and launched his crusade to overturn a global trading system he says is unfair to the United States and its workers That followed an earlier series of restrictions by Beijing on exports of such materials as gallium germanium antimony and tungsten in response to bargain friction with the administration of then-President Joe Biden In April Beijing imposed permitting requirements on seven rare earth elements under a Chinese law that applies to all exports not just those bound for the U S region With the permitting process taking days the new requirement caused a pause in shipments threatening to disrupt production of cars robots wind turbines and other high-tech products in the U S and around the world The U S meanwhile added to restrictions on exports of advanced technologies to China Rare earths have remained at the center of China-U S talks aimed at staving off huge tariff increases that were postponed in May to allow time for negotiations on a broader business agreement The deadline for reaching a deal is Aug An agreement publicized in late June did not remove China s permitting requirement on rare earths but Beijing agreed to flexibility in dialing up or down the approval process as needed Computer chips are another key bone of contention The Chinese Commerce Ministry stated Friday that it had taken note of a decision by the Trump administration to lift restrictions on exports of key semiconductors used in artificial intelligence made by Nvidia and its rival Advanced Micro Devices In April the Trump administration released it would restrict sales of Nvidia s H chips to China as well as MI chips from AMD But Commerce Ministry spokesman Wang Wentao declared restoring healthy pact ties will require more action by Washington U S export controls on Ascend chips made by Chinese tech giant Huawei Technologies have hurt the interests of Chinese companies Wang reported reporters in Beijing We hope that the United States and China will meet each other halfway and correct their wrong practices through equal consultation create a good surroundings for mutually beneficial cooperation between enterprises of both sides and jointly maintain the stability of the global semiconductor production and supply chain he announced Source