China’s competitiveness in the global marketplace, especially when it comes to rare-earth minerals and making magnets with them, is a growing concern. These materials are essential inputs for many other advanced manufacturing industries, including defense and renewable energy. As tensions with the United States exacerbate, China seems to be timing their incredibly bold move. Simultaneously, they are determining the development, deployment, supply and use of critical resources and extending their global reach and influence.
For the last few months, China’s exports to the U.S. have been crashing, with a 27% YoY drop last month. Even with this downturn, China’s total exports jumped by 8.3%. This indicates that despite extreme friction in relations between the U.S. and China, demand for Chinese goods is still strong in other markets. This rarity further highlights China’s longview, shrewd strategic policy to diversify its trade partners and improve their global profile.
China has recently widened its export controls on rare-earth minerals and permanent magnets, which are critical inputs to many advanced technologies. The country’s constitution explicitly forbids their use for military purposes. This action is a big step toward its wider campaign to maintain and exercise monopoly power in determining how the world uses these increasingly vital assets. Through harsher and stricter regulations on these manufacturers and supply chain networks overseas, China wants to keep the leverage in global markets.
Additionally, China’s leader Xi Jinping has been promoting a global development initiative that seeks to bolster economic ties with various countries, particularly in Africa. As part of this new foreign policy, in a major shift, China has announced removing tariffs for imports from African countries. This step significantly improves its trade position while further tightening its ties with developing nations. Xi Jinping’s bigger picture vision is to establish China as the unrivaled linchpin power in a restructured multipolar world. This BUILD initiative is a key component of that strategy.
Under President Xi Jinping’s leadership, China has become increasingly internally focused. His ambition is for unquestioned supremacy over the Chinese Communist Party (CCP). Having been in power for over a decade, he has cultivated relationships with several autocratic leaders from countries such as Russia, India, North Korea, and Iran through high-profile summits hosted in China. These events are indicative of Xi’s focus on spreading China’s influence abroad.
“The president of the United States has far more cards than the People’s Republic of China,” remarked JD Vance regarding the ongoing geopolitical tensions between the two superpowers. This declaration underscores the opportunity that the U.S. believes it has, given its economic might and military capabilities.
In addition to expanding its influence through diplomatic channels, China is leveraging its control over rare-earth minerals to potentially compromise Western arms supplies to Ukraine and enhance defenses against Russia. The new rules surrounding these materials could have significant implications for countries reliant on Chinese exports for their military technologies.
China’s advance on claiming the same kind of extraterritorial jurisdiction as the US represents a watershed moment in the evolving dynamics of international power. The country’s efforts to control the use of specific materials by foreign entities reflect a growing assertiveness in global governance. This new development poses rising fears among western nations regarding their reliance on Chinese resources, especially in critical sectors.
As China seeks to manage a rapid economic shift, it is isolating itself from the U.S. Simultaneously, it’s buttressing its growing influence in global counter institutions such as the BRICS bloc of developing countries and the United Nations. These initiatives, though laudable in their own right, reveal the backdrop of China’s broader strategic ambition to be a dominant power in a multipolar world order.