How China wants to use rare earths to weaken the United States

The warning is the last chapter of a conflict that has escalated since the president Donald Trump announced new tariffs and decided to place the Chinese telecommunications giant Huawei on its blacklist.

On Wednesday, Huawei announced an action in US courts against a law banning federal agencies from using their products in the name of security.

Last week, pictures of the president were published Xi Jinping visit of a rare earth plant in Ganzhou, central China, a sign of its threat to stop exports.

Shares of rare earth companies rose Wednesday on the Shanghai and Shenzhen stock exchanges.

An official of the National Commission for Development and Reform, which plans the Chinese economy, also discussed the issue Tuesday without clarifying the government's position, thus ensuring that priority is given to China. "serve our domestic needs first".

On the other hand, the official media were more aggressive this Wednesday.

"By waging a trade war against China, the United States risks losing the supply of vital materials to retain their technological power", the Xinhua official news agency said in a comment.

The state-run Global Times warned in an editorial that "the United States will regret having forced China's hand in the rare earths".

"We think that if the United States represses more and more the development of China, China will sooner or later use rare earth as a weapon"says the nationalist newspaper.

China produces more than 95% of the world's rare earths and the United States relies on China for 80% of its imports.

Rare earths are a set of 17 chemical elements essential to making smart phones for TVs, through cameras and light bulbs.

China could harm American companies in a broader battle to dominate the future of high technology.

Huawei has brought the United States to court through a defense law pbaded by Congress last year that prohibits government agencies from using their equipment.

The company is also facing a Trump administration order that prevents it from accessing essential US electronic components for its products.

"The US government has not provided evidence to prove that Huawei is a security threat", the legal guardian of Huawei told the press, Liuping song, rejecting the argument that his equipment can serve China to spy on other countries.

This is not the first time that they accuse China of using rare earths as a political weapon. Sources from the Japanese industry have explained that in 2010, China had temporarily cut exports due to a territorial dispute, which Beijing refuses.

But according to the experts, the case of Japan shows that China does not have as much influence as it seems on this issue.

"Even in apparently favorable circumstances, market power and political influence have been short-lived and difficult to exploit", says a report from the 2014 teacher Eugene Gholz from the University of Texas, published by the Council on Foreign Relations.

The report points out that China's benefits in the sector were not as significant in 2010 due to market behavior and increased production of rare earths outside of China.

At the same time, badysts believe that China is reluctant to use rare earths as a commercial weapon, lest its customers look for other sources of supply.

In this sense, the Global Times acknowledged that its use as a commercial weapon was risky. "If China decides to ban the export of rare earths to the United States, it will produce complex effects, even causing losses for China itself"badures the newspaper.

"However, China also knows that the United States would clearly suffer greater losses in this situation", he added.