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China urges global cooperation on rare earths in jab at US

Shoring up independence in key industries is focus of next five-year plan

Crushed rare-earth ore from a California mine. China accounts for 60% or so of the world's production of rare-earth minerals.   © Reuters

BEIJING -- Countries should work together to address the demand for rare-earth minerals and products, the Chinese industry and information technology minister said Monday, in an apparent swipe at U.S. President Joe Biden's effort to create supply chains less reliant on China.

Xiao Yaqing defended Beijing's draft regulations to strengthen oversight of rare earths, released earlier this year. They take aim at "the waste of resources from price competition, environmental problems and low technological levels," Xiao told a press briefing. China could learn lessons from Japanese companies that turn out high-value-added products, he said.

Xiao's comments came as the Biden administration has sought to reduce American reliance on China for strategic products, including semiconductors, electric-vehicle batteries, rare-earth metals and medical products. 

China accounts for about 60% of global rare-earth production. The new regulations strengthen China's control cover the entire supply chain, from domestic production to exports, raising concerns that Japanese companies with American clients would be subject to restrictions.

Xiao also outlined plans to bolster the nation's semiconductor supply chain, targeted by the U.S. as a weak point of China. Main policy initiatives in the five-year plan from 2021 include strengthening the country by becoming more self-reliant in science and technology while stepping up innovation in the supply chain, according to Xiao, who highlighted semiconductors as an example of such new fields.

China aims to become more self-reliant in science and technology fields as part of its next five-year plan, according to Xiao Yaqing, minister of industry and information technology. (Photo by Shunsuke Tabeta)

On the specifics of semiconductor policy, Tian Yulong, chief engineer at the Ministry of Industry and Information Technology, identified such basics as materials and production equipment as areas that will be strengthened. Companies in these sectors will receive tax breaks and help with cultivating talent.

Although China has focused on raising its self-sufficiency with semiconductors, Xiao and others see the need to improve the competitiveness of supply chains overall. Semiconductors are a crucial part of cars, the manufacturing sector, the medical field and online businesses. In addition to bolstering technological innovation of companies, attention will be paid to increasing scale, according to the ministry.

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