There's speculation that rare earth elements will act as the next bargaining chip for China in the ongoing trade war with the U.S., after President Xi Jinping visited a local company specializing in the sector earlier this week.
Rare earths refers to some 17 chemically similar metallic elements,
known for their unique characteristics, especially their outstanding chemical, magnetic and fluorescent properties.
They're found in most every day electronics, such as displays, fluorescent substances, and even electronic vehicles.
China is the largest source of the minerals, producing more than 90 percent of the world's supply making its dominance clear-cut.
Though Washington also is capable of producing a relatively small amount, it relies on China for 80 percent of its rare earths imports, making this sector an obvious source of leverage for Beijing.
In 2010, China banned all of its rare earths exports to Japan, following a territorial dispute, during which a Chinese fishing boat captain was detained by Tokyo.
Japan quickly released the captain.
But the case was later brought to the World Trade Organization resulting in a torrent of Chinese rare earth exports into the market and an inevitable collapse in prices.
On Beijing's trade dispute with the U.S., pundits say Xi Jinping's visit to the local rare earths factory could be a strategic warning that it's considering playing the rare earths card, once again.
However, a trade expert says the possibility of this actually happening is quite low.
"Definitely, Xi Jinping's visit was a deliberate act to show such possibility.
Since the U.S. pulled strings through tariffs, this could be China's way of reacting. But I think chances are slim because China is well aware that if they ban rare earths exports, it would only worsen the situation for both sides."
[STANDUP] ed: Steve
Though it’s yet to be seen whether China will use rare earths as leverage in the trade dispute with the U.S., concerns have been raised over the costs of a prolonged trade war between the two countries.
Kim Mok-yeon, Arirang News.