People’s Republic of China President Xi Jinping’s moves to further restrict access to and shipments of rare earths, processed rare earths, and components that use rare earths, an access restriction amounting to virtual cutoff aimed specifically against us, is just one more reason for American businesses to stop doing business with PRC-domiciled companies or inside the PRC. The lede:
With rare-earths export restrictions and a string of actions targeting the US chip industry, Beijing is mounting a full-scale offensive on Washington ahead of an expected meeting between President Trump and Chinese leader Xi Jinping.
This, too:
On Thursday, China announced new restrictions on rare-earth materials, specifically noting that licenses related to certain types of chips will be granted on a case-by-case basis. Also Thursday, Beijing added roughly a dozen organizations to its “unreliable entity list,” including TechInsights, a Canada-based semiconductor technology research firm that had released reports on chip-development efforts by China’s Huawei Technologies.
China went beyond semiconductors. On Thursday, Beijing also said it would require licenses for exports of certain lithium batteries and some equipment and materials used to make them.
Included in those restrictions are limits on exporting any goods that include as few rare earths as 0.1% of the product’s value in their makeup. That amounts to an outright block on anything that even touches rare earths. It’s a direct attack on our economy and our defense industries, and so on our sovereignty.
It’s long past time for American businesses to shift their business arrangements and their supply chains completely away from the PRC. The patriotic nature of the move as well as the move’s economic optimization, along with the urgency of making it, should be obvious even to the most remote, ivory tower cloistered American business manager.
That shift must include stopping all technology transfers to the PRC, whether the transfer is in the form of goods (viz., chips, chip fabrication equipment, computer equipment, technologically oriented consumer goods, software, and so on) or in intellectual property agreements.
For example:
China’s top market regulator said Friday that it had launched an investigation into Qualcomm for suspected violation of the country’s antimonopoly law. The probe is tied to Qualcomm’s acquisition of Autotalks, an Israeli startup, the regulator said.
If Qualcomm were not operating inside the PRC, the PRC’s regulators would have nothing to say regarding the acquisition.
More broadly, if we as a nation did no business in or with the PRC, Xi would have no levers to swing against us. The changeover will be disruptive and expensive, but only in the short term, if American businesses get off the dime (including literally) and make the shifts. After all, how disruptive is it already to not be making the shifts apace? It’ll also be far more expensive for far longer, if not permanently, for American businesses to remain dependent on an enemy nation for critical items.
That dependency, too, is a direct threat to our independence of action as a sovereign nation, ceding as it does critical parts of our national economy and of our defense establishment to that enemy nation.