China Limits Rare Earth Exports to Prevent US F-35 Fighter Jet Production?

[Asia Economy Reporter Park Byung-hee] According to a study by the U.S. Congressional Research Service (CRS), producing one F-35 fighter jet requires 417 kg of rare earth elements. China holds an overwhelming 80% share of the global rare earth supply market. This means China can significantly trouble the U.S. by leveraging rare earth elements.

Major foreign media reported on the 16th (local time) that China is considering restricting rare earth exports to deal a blow to U.S. companies, including defense contractors.

According to sources, the Ministry of Industry and Information Technology (MIIT), which is equivalent to China’s Ministry of Industry, drafted a plan last month to control the production and export of 17 types of rare earth elements. According to the draft, Chinese rare earth producers are required to comply with export restrictions for the sake of China’s national security. Last year, China’s Ministry of Foreign Affairs stated that it could impose sanctions on companies selling weapons to Taiwan, such as Lockheed Martin, Boeing, and Raytheon. After review by the State Council and the Central Military Commission, a final decision will be made on whether to include rare earths in the export control list based on MIIT’s proposal.

US F-35 Fighter Jet [Image Source= AFP Yonhap News]

Rare earth elements are not only used in F-35 production. The U.S. Department of Defense has already expressed concerns about increasing dependence on Chinese rare earths for producing guided missiles, drones, and other military equipment.

Ellen Lord, former U.S. Department of Defense Undersecretary for Acquisition and Sustainment, testified before the U.S. Congress in October last year, arguing that stockpiles of specific rare earths should be secured and that the military production process should be reviewed to reduce dependence on China. Lord pointed out that as China’s influence grows, the U.S. has become too vulnerable.

A Chinese government official is reported to have already investigated, through local rare earth industry contacts, how much damage restricting rare earth exports could inflict on the U.S. An anonymous source said, "The Chinese government wanted to know if restricting rare earth exports would cause problems for the U.S. in manufacturing the F-35 fighter jet."

However, some express concerns that if China restricts rare earth exports, the already deteriorating relationship with the U.S. could worsen further and backfire. For example, the U.S. might expand its own rare earth production capacity as an alternative, which could weaken China’s influence in the rare earth market. Regarding this, a Chinese rare earth industry insider said the Chinese government wanted to know how quickly the U.S. could develop alternatives and expand its own production capacity if exports were restricted.

Jiang Rui, an analyst at Antaike, a consulting firm advising the Chinese government, said, "Restricting rare earth exports is a double-edged sword and must be decided very carefully."

Rare Earth Elements [Image Source= Reuters Yonhap News]

There may also be controversy within China regarding rare earth production and exports. Chinese rare earth producers have expressed concerns about the government strengthening production controls.

China began restricting rare earth production in 2007 to control prices and reduce environmental pollution. However, since these measures lacked legal binding force, rare earth producers often produced beyond the government-set quotas. Recently, the Chinese government has strengthened regulations to impose substantial fines on companies that produce and sell beyond their quotas.

China’s high demand for rare earths is also a concern for the government. Over the past five years, China’s demand for rare earths has exceeded supply. This is because rare earths are key materials used in smartphones, electric vehicles, and wind power turbines. Their use is increasing in industries gaining attention recently. As a result, imports of Chinese rare earths from the U.S. and Myanmar have also significantly increased.

Raw material information service provider Subprime China Information stated, "China’s security based on rare earths cannot be guaranteed," adding, "If relations with the U.S. deteriorate or if the Myanmar military decides to close the border, it will disappear."

This content was produced with the assistance of AI translation services.