Description: The Chinese Ministry of Commerce has tightened regulations regarding the production and processing of various groups of rare earth elements, ahead of a potential bilateral meeting between President Xi Jinping and US President Donald Trump this month. The new wave of restrictions prohibits companies from extracting, processing and manufacturing products from rare earth minerals without a license or specific governmental approval from China. The measure would enable the Chinese government to have a larger oversight of the usage of rare earth minerals and the products being exported to foreign markets. China is considered to hold over 61% of the global rare earth mineral extraction industry and approximately 92% of the global processing power of rare earth minerals.
Impact: China’s renewed restrictions of processing and manufacturing rare earth mineral products should be perceived as a power and show of force move ahead of the speculated bilateral meeting between Trump and Xi this month. Trade negotiations have been ongoing while the sale of TikTok on the American market was considered as a major breakthrough in surpassing trade differences between the global powers. China’s domination on the critical resource market is the tip of the country’s trade arguments with the US while the latest restrictions are aimed at bolstering the country’s position in both the trade talks and global markets and position China favorably in face of a potential leaders meeting. China would eventually use the new restrictions as a bargaining chip in the negotiations and loosen the regulations once the trade talks are concluded and a potential trade deal is signed.