China's leverage: access to its factories
Export controls on rare earths and batteries—what's next? Plus plan to double EV charging capacity and more.
Controlling the means of production
Rare leverage
This week has been full of bluster coming from Washington, D.C., and justified concern around the world about China’s new export control rules on rare earths, which are key to global manufacturing of cars, electronics, and military hardware.
China’s rare earths leverage appears to be driving the Trump administration to distraction. U.S. Treasury Secretary Scott Bessent called China’s senior negotiator Lǐ Chénggāng 李成钢 “unhinged,” and suggested without evidence that he may have “gone rogue.” Trump threatened a bajillion percent tariffs (OK, the number was 100%) but then softened—again—and talked—again—about meeting Xi Jinping and making a deal.
Which the U.S. is going to have to do: There is no short-term alternative supplier for rare earths. Other countries such as Australia could make up some of the shortfall, and the U.S. will now re-start its dormant rare earths mining and refining industry, but “it could take about two years for a new critical mineral operation to open,” according to Ian Lange, an associate professor of economics and business at the Colorado School of Mines, cited by Wired.
Not coincidentally, China’s Ministry of Commerce and the General Administration of Customs announced export controls on lithium batteries and related materials set to take effect on November 8. One can imagine a team at the Ministry of Commerce looking around for other industries where China has a near monopoly—certain active pharmaceutical ingredients (APIs) for example—whose control could be justified in the name of anti-narcotics trafficking.
In the past, China’s leverage was access to its markets. Perhaps in the future it will be access to its factories.
—Jeremy Goldkorn
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Plan to double EV charging capacity
The Chinese government has released a plan to build 28 million EV charging facilities nationwide by the end of 2027, which would double current capacity.
Five Year Plan meeting
From October 20 to October 23, the Chinese Communist Party will discuss a draft of the 15th Five-Year Plan, which will set goals and policy directions for China’s economic and industrial development from 2026 to 2030.
What’s under discussion: Security and self-reliance are likely to be important themes, and we probably can’t expect any new economic policies.
Netherlands takes over Chinese-owned chip factory
“The Dutch government has taken control of Chinese-owned computer chipmaker Nexperia […citing…] worries about the possible transfer of technology to Nexperia’s Chinese parent company, Wingtech,” per Reuters.
Women’s conference
The Global Leaders’ Meeting on Women was held in Beijing on October 13. Xi Jinping gave a speech. The event marked the 30th anniversary of the United Nations conference on women’s rights in 1995, attended by Hillary Clinton.
A nationalist’s plea for more voices on the internet
Hú Xījìn 胡锡进, the former editor-in-chief of nationalist rag Global Times, is a firebrand who is given to bouts of thoughtfulness. He recently called for “tolerance and freedom within the constitutional order” as he bemoaned the fact that censorship has dumbed down the Chinese internet.
Third-tier cities
“The GDP of emerging-tier cities is projected to reach 110 trillion yuan ($15.43 trillion) by 2025, with rural disposable income growth outpacing urban areas,” according to Daxue Consulting, which has published a report on lower-tier city consumption habits.