Text / Reporter Chang Heshan
U.S. President Joe Biden and former President Donald Trump hold the first televised debate of the 2024 U.S. election in Atlanta, Georgia, U.S., June 27, 2024.
In the election year, the two parties in the United States are inextricably linked, but the so-called decoupling and breaking of the chain for their respective interests is the "China card" they play together.
Typically, on June 18, Mulenard, chairman of the U.S. House of Representatives' "U.S.-China Select Committee on Strategic Competition," and Raja Krishnamosi, a senior member of the Democratic Party, jointly announced the establishment of a bipartisan "Critical Minerals Policy Working Group."
The task force aims to increase transparency on U.S. critical minerals supply chain dependencies and develop a range of investment, regulatory reforms, and tax incentives to reduce over-reliance on specific countries.
(Source: China Nonferrous Metals Official Website)
According to reports, the move by the US House of Representatives highlights the common interests and goals of the two parties in the United States in the face of China's dominance in the global critical minerals market.
In the future, the group may have two directions:
The first is to promote relevant policies or legislation in the field of critical minerals supply chain, including financial incentives, tax reduction measures or R&D support, to encourage domestic production and technological innovation, and ensure the self-sufficiency and global competitiveness of the United States in the field of critical minerals.
The second is to encourage the U.S. government to introduce more new measures in the field of China-related critical minerals, and intensify the competition between China and the United States in the field of global critical minerals.
Unlike the United States, China has always been committed to contributing to the security and stability of the global supply chain in the supply chain of critical minerals.
On June 22, Premier Li Qiang of the State Council signed Order No. 785 of the State Council, promulgating the "Regulations on the Management of Rare Earths" to be implemented from October 1, 2024, further clarifying the implementation of protective mining of rare earth resources and promoting the high-end, intelligent and green development of the rare earth industry.
Some commentators believe that China's rare earth industry has achieved healthy and sustainable development, so as to better maintain the safety and stability of the global industrial chain. However, as a major producer of rare earths, China has the responsibility of a major country, and from the needs of maintaining the national security of the mainland and world peace and stability, it must ensure the peaceful use of this resource.
Moreover, in terms of critical minerals, China has always been committed to integrating into the global supply chain and never wants to get stuck in anyone's neck. On June 18, data from the General Administration of Customs showed that China's exports of rare earths and their products in May were 11,591 tons, an increase of 14.6% year-on-year; In 1~5 months, the cumulative export of rare earth and its products was 50,543 tons, an increase of 5.6% year-on-year.
Supply chain anxiety in the United States
However, the United States, with its supply-hegemonic mentality, has always been plagued by supply anxiety.
The U.S. cross-party "Critical Minerals Policy Working Group" is essentially still focusing on "critical minerals" to get rid of high dependence on China and promote "decoupling and breaking the chain" of critical minerals to China.
The Biden administration has reported that the U.S. critical minerals supply chain is extremely dependent on several countries, especially China. For example, 14 of the 35 critical minerals listed by the United States in 2021 are 100% imported, and China is the main producer of 16 of them.
Regarding the so-called "concerns about China's critical metals", the spokesperson of the Chinese Foreign Ministry pointed out that countries with critical mineral resources should play an active role in ensuring the safety and stability of relevant industrial and supply chains, jointly assume the responsibility for the global supply of relevant minerals, and ensure the normal development of relevant economic and trade cooperation.
However, the supply chain anxiety of the US side has not been alleviated.
As early as December 2017, then-U.S. President Donald Trump signed the Federal Strategy on Ensuring the Safe and Reliable Supply of Critical Minerals, which aims to change the pattern of excessive dependence on foreign supplies of critical minerals in the United States.
On June 14, 2022, the United States, Canada and other partner countries have established the "Partnership for Mineral Security" (MSP). In addition to the U.S. and Canada, MSP's partners include Australia, Finland, France, Germany, Japan, South Korea, Sweden, the U.K. and the European Commission to strengthen the critical minerals supply chain through alliances.
In June 2021, the Biden administration released a supply chain assessment report that concluded that the United States has become overly dependent on "foreign and adversary countries" in critical minerals and raw materials, which has posed a threat to national and economic security.
As a result, there was the later "G7 Alliance" - on December 12, 2022, Canada's Minister of Natural Resources Wilkinson announced at the 15th meeting of the Conference of the Parties to the United Nations Convention on Biological Diversity that the seven countries led by the United States announced the formation of an alliance. The Sustainable Critical Minerals Alliance, which is made up of the United States, Canada, Australia, France, Germany, Japan and the United Kingdom, is trying to use "custom standards" to make a fuss about the supply of critical minerals. This move was criticized as "harming others and harming oneself".
"Survival vulnerability" distorts supply chains
As a facilitator of the Critical Minerals Policy Working Group, Mullenard said in a statement that critical minerals are the cornerstone of everything from basic consumer goods to advanced military technology. In the event of a conflict, U.S. dependence on China for control of critical minerals supply chains will quickly become an existential vulnerability.
Mullenard noted that China has imposed export restrictions on rare earth elements, including gallium, germanium and graphite, as well as mineral processing equipment, which has further exacerbated U.S. concerns.
Mulenaar made it clear that the main task of the group is to move away from China's dominance of its critical minerals supply chain and reduce U.S. dependence on China's critical minerals.
Obviously, this is the original intention of the above-mentioned "working group".
(Source: China Nonferrous Metals Official Website)
In response to the content released by the above-mentioned "Bipartisan Policy Working Group" of the United States, Reuters interpreted that since critical minerals are used in various fields, the latest move of the United States aims to weaken China's dominance in the supply of critical minerals, so as to reduce the United States' dependence on China for critical minerals used in various products such as semiconductors, wind turbines and electric vehicles.
To achieve this goal, the U.S. government has taken a series of measures, including imposing export controls on certain minerals and reducing subsidies for Chinese electric vehicles, to accelerate the "decoupling" from China. However, while the United States is trying to reduce its dependence on China's critical minerals, it is also bound to face the challenges of rising costs and supply chain restructuring.
Mullenard's "decoupling of China's supply chain" is extremely persistent.
On June 7, Mulenard and a number of U.S. lawmakers co-sponsored a bill called "Decoupling Foreign Hostile Battery Dependence Act", requiring the U.S. Department of Homeland Security to prohibit the procurement of batteries from six Chinese companies: CATL, BYD, Envision Energy, Guoxuan Hi-Tech, EVE Lithium Energy, and Haichen Energy Storage, while hoping to promote "decoupling" from U.S. geopolitical rivals in the supply chain.
In addition, the Biden administration announced in May that it would impose new tariffs on $18 billion worth of Chinese goods, including electric vehicles, batteries, semiconductors, aluminum, critical minerals, solar cells, ship-to-shore cranes, and medical products. Later this year, tariffs on certain critical minerals will be raised from zero to 25 percent.
Chinese Foreign Ministry spokesperson Mao Ning pointed out that decoupling and breaking the chain is a double-edged sword, harming others and harming one's own interests.
Build a diversified international supply
From the U.S.-led Mineral Security Partnership, to the G7 Alliance for Sustainable Critical Minerals, to the unexpected bipartisan cooperation between the U.S. and the establishment of the bipartisan Critical Minerals Policy Working Group, and the formal establishment of the White House Supply Chain Resilience Committee by U.S. President Joe Biden, it has gradually demonstrated that the U.S.-European critical minerals industry policy encirclement based on alliances and committed to excluding China's supply chain is taking shape.
What about China?
Zhou Yamin, an associate researcher at the Institute of Asia-Pacific and Global Strategy of the Chinese Academy of Social Sciences, believes that China, as a major manufacturer and supplier of clean energy-related products in the world, should focus on continuously improving the resilience of the overall supply chain of key mineral products and ensuring the security and stability of their supply.
At the same time, the state should introduce policies to strengthen the recovery and recycling of critical minerals, strengthen the research and development of core technologies at key points, and actively respond to the "manufacturing reshoring" and "decoupling and chain breaking" strategies of developed countries.
Qi Kai, an associate professor at the Institute of Globalization and Global Issues at China University of Political Science and Law, said that in an era of high global interdependence, if the United States always holds the concept of "absolute security", "absolute leadership" and "absolute hegemony" for the so-called supply chain, then there may be endless "new hidden dangers" to be discovered.
Chinese Foreign Ministry spokesperson Mao Ning once pointed out that scientific and technological innovation is the fruit of human development and progress, and no country can enjoy it alone, let alone use scientific and technological advantages to suppress and curb the development of other countries. China does not favor decoupling and chain breaking, and decoupling and chain breaking cannot stop China's development.