Taipei [Taiwan], October 12 (ANI): Taiwan’s technology and manufacturing sectors could face major disruptions following China’s latest restrictions on rare earth exports, warned Kristy Hsu, director of the Taiwan ASEAN Studies Centre at the Chung-Hua Institution for Economic Research.
Hsu said the new restrictions are not only aimed at the United States but are intended to exert pressure on any country dependent on Chinese rare earth elements or related technology. Taiwan, she noted, is particularly vulnerable because a significant portion of its imported semi-finished goods and electronic components from Japan rely on materials or refining processes originating in China.
China’s Ministry of Commerce introduced export licensing rules requiring global companies to obtain approval if their products contain more than 0.1 per cent Chinese-origin rare earth materials by value. The regulation specifically targets industries linked to semiconductors, artificial intelligence, and defence systems, which will now face case-by-case evaluations.
Hsu compared Beijing’s policy to the US “Foreign Direct Product Rule” (FDPR), which governs the international use of American technology, but said China’s approach is broader in scope and global reach, representing a “strategic escalation” in economic coercion.
Experts warn that if fully enforced, the regulations could trigger a spike in rare earth prices and prompt major economies to stockpile materials to avoid shortages. Hsu added that the overall impact would likely be severe unless China eases its stance, though the extent of enforcement remains uncertain.
According to the US Geological Survey, China produced around 270,000 tons of rare earths in 2024, accounting for nearly 70 per cent of global output. Beijing also controls about 90 per cent of the world’s refining capacity, giving it overwhelming leverage over global supply chains and technological production. (ANI)
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