Chips are the “heart” of the semiconductor industry, and chips are a part of the high-tech industry, and we happen to grasp the core of this part, which is the supply of rare earth elements. Therefore, when the United States sets up layer after layer of technological barriers, we can fully utilize our advantages in rare earths to counter the United States’ technological barriers. However, from a market perspective, this form of confrontation has its pros and cons, as many things can be replaced, which means that the era of “cabbage prices” is coming soon.
However, despite this, the restrictions on rare earths are still effective. According to reports, after China proposed technical restrictions on the supply of rare earth resources, the United States has started to unite and form a supply chain alliance of the Group of Seven. And they also announced a new regulation that will jointly create a strategic chip raw material industry chain, including the supply of important raw materials such as rare earths, in order to maintain the stability of chips and rare earths in this industry chain.
That is to say, under our counterattack, they can only obtain rare earths from other channels. In a sense, our restrictions have already worked. If they don’t, they will talk about breaking away from their dependence on rare earths like before, but in reality, they won’t want to win us over like they do now
Economists from Tsinghua University have also taken note of this move by the United States and called for the lifting of countermeasures against the United States. Although this statement may sound absurd, it is out of fear of the international market, and from an economic perspective, it is still very reasonable. However, foreign media say that it is difficult for the West to get rid of rare earths.
In fact, from the beginning, the Americans proposed the idea of ‘no longer relying on China’. Because we are not the only country with rare earth resources, they are not unable to get rid of their dependence on us.
In fact, the United States has been trying to win over Australia and prevent them from providing us with rare earths in order to break free from our control. This is good news for the United States, as Australia’s Lynas is the largest rare earth producer outside of China, accounting for approximately 12% of the world’s total. However, this is not well regarded in the industry due to the low content of rare earth elements in the minerals controlled by this company and the high mining costs. Moreover, China’s technological leadership in rare earth smelting is also an issue that the United States must consider, as they used to rely on our company’s products for completion.
Now, it is inevitable that the United States wants to use the same means to attract more allies and get them out of our rare earth supply. Firstly, except for the United States, rare earth ores from other countries will be sent to us for processing because we have a complete industrial chain with approximately 87% of production capacity. This is the past, let alone the future.
Secondly, it would be unimaginable to create an “independent” industrial chain, which would require financial resources and time. Moreover, unlike us, most Western countries do not pay too much attention to cyclical profits, which is why they gave up the opportunity to produce chips from the beginning. And now, even though they have spent so much money, they may not be able to afford short-term losses. In this way, it is unlikely to break away from the rare earth industry chain
However, we still have to oppose this unfair competition, and we also need to maintain and strengthen our position in the rare earth industry. As long as we can become stronger, we can use facts to shatter their illusions.
Post time: May-15-2023