The writer is the author of ‘Chip War’ and adviser to Vulcan Elements
Shortly after Beijing announced new restrictions on exporting rare earth minerals and the specialised magnets they make, the world’s auto industry warned of shortages that could force factory closures. China’s skilful deployment of rare earth sanctions this spring was probably the key factor in forcing Washington to reverse its tariff rises on the country. They represent a new era of Chinese economic statecraft — evidence of a sanctions policy capable of pressuring not only small neighbours but also the world’s largest economy.
China has been a prolific user of economic sanctions in recent years, but many of its efforts have been blunt and only partially effective. Punitive measures have often been hidden and even officially denied. Chinese tour groups lost interest in visiting the Philippines, we were told; while Taiwanese pineapples couldn’t meet health standards and Chinese consumers simply didn’t want to buy Korean products.