China plays rare earths card, hard
New rare earth export restrictions, Golden Week spending numbers, pig-to-human liver transplant, direct flights to India resume, Premier Li Qiang visits North Korea.
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Xi’s trade war recipe: rare earths, TikTok, soybeans
China plays rare earths card, hard
Today, October 9, Beijing announced new export controls on rare earth elements and equipment used to refine them.
The list of restricted items has been expanded since the last round of controls announced in April. More importantly, the new rules require companies in other countries to obtain approval from Beijing before shipping products that contain more than 0.1% Chinese-sourced rare earths or are produced using Chinese-made rare earth refining equipment or technologies. It’s the same concept as the global U.S. restrictions on advanced chips and equipment that allows Washington to cut China off from the latest semiconductors, even if they are made outside the U.S.
Beijing’s official justification, as summarized by a Ministry of Commerce spokesperson is that because rare earths can be used in military hardware, controls are necessary for China to “better safeguard national security and interests and better fulfill its international obligations, including non-proliferation.”
But the move is clearly a message ahead of an expected meeting between Donald Trump and Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in South Korea on October 31 and November 1.
Rare earth restrictions enacted in April this year showed Beijing that the U.S. and Europe were vulnerable; the new rules give China a powerful new card to play.
This comes after Washington gave away exactly what it wants out of a TikTok deal (while Beijing has been silent), and as U.S. soybean farmers face the reality that their biggest customer, China, is not buying this year. Donald Trump likes to talk about “cards” that countries hold: China’s coming to trade negotiations with the U.S. with a very strong hand.
Sources and related links:
New rare earths rules: Ministry of Commerce documents 56, 57, 61, and 62
English translations of new rules / Fred Gao
China-U.S. trade talks: Which country has the upper hand in negotiations? / ChinaFile Conversation
U.S. details steep port fees on China-linked vessels starting October 14 / Caixin
Economic signals
Travel boom, spending gloom
Chinese travelers made a total of 888 million domestic trips during the eight-day National Day and Mid-Autumn Festival holiday, up 16% from last year, and they spent 809.1 billion yuan ($113.6 billion), up 15.4% from 2024.
But they only spent an average of 113.90 yuan ($15.98) per day of travel, down from 130.90 yuan ($18.36) recorded last year, and lower than the pre-pandemic level of 118.70 yuan ($16.65) in 2019.
Other economic and business news this week:
The World Bank raised its 2025 growth forecast for China to 4.8%, compared with 4% predicted in April.
New measure to curb price wars: The National Development and Reform Commission and the State Administration for Market Regulation issued an announcement “on governing disorderly price competition” warning that “operators who fail to regulate their pricing practices after warnings and reminders will receive special attention.”
Medical advances
First pig-to-human liver transplant
Surgeons in China transplanted a section of liver extracted from a genetically modified pig into a human cancer patient, a procedure they described in a paper in The Journal of Hepatology.
The transplanted portion of pig liver was removed after 38 days because of complications. The patient, who had liver cancer and cirrhosis, died several months later, but The Journal called the procedure a “breakthrough” and a “historical clinical milestone.”
Himalayan thaw
Direct flights to India resume
“China’s Guangzhou Baiyun International Airport confirmed on [October 3] that direct flights between India and China will resume later this month, ending a halt of more than five years and signaling a cautious easing of bilateral tensions,” reported Reuters.
Other recent signs of a thaw:
Indian Prime Minister Narendra Modi in China for SCO Summit on September 1
Chinese Foreign Minister Wáng Yì 王毅 in New Delhi on August 18
Lips and teeth are back together
Premier Li Qiang visits North Korea
Premier Lǐ Qiáng 李强 led a Chinese party and government delegation to Pyongyang on October 9 to attend the 80th anniversary celebration of the founding of the Workers’ Party of Korea.
Vietnamese Communist Party chief To Lam and former Russian President Dmitry Medvedev also attended.