Highlights

• China is implementing export restrictions on rare earth metals and related technologies, giving it significant control over the global supply chain for electronic components.
• This move is part of China’s phased plan to accumulate wealth across key sectors, ultimately aiming for digital currency domination by 2049.
• The transition from Phase 1 (supply chain domination) to Phase 2 (leveraging for advantage) is occurring on schedule, impacting various industries reliant on rare earth components.

The New York Times (opens in a new tab) reported on Saturday October 26 that China has been utilizing export restrictions on rare earth metals, which are crucial components in many electronic devices including computers, via the limiting of exports of both the raw materials and the technology needed to process them, effectively giving them significant control over the global supply chain and potentially influencing international markets with this strategy; this is often seen as a tactic to protect their domestic industry and exert leverage in geopolitical situations.  As Rare Earth Exchanges has explained in an article yesterday, this move is measured, part of an integrated, well planned and phased program to ultimately accumulate vast wealth across relevant sectors ultimately leading in 2049 to China’s domination over digital currency.

As we explained in the previous article Phase 1 involved domination of the rare earth material supply chain, while Phase 2 would involve utilization of that system-wide leverage as a tool, a lever to drive advantage, including the accumulation of vast amounts of capital in key sectors from electric vehicles and green energy to computers.

Today we are transitioning from Phase 1 to Phase 2, given China produces a large majority of the world's rare earth metals, giving them significant power over the market.   And per their 2049 mission, they appear on time.

Besides limiting raw material exports, China has also banned the export of technology needed to extract, separate, and process rare earth metals, including technology for manufacturing rare earth magnets. 

This restriction significantly impacts the production of various electronic devices like computers, smartphones, electric vehicles, and wind turbines, which rely heavily on rare earth components. 

China often cites national security concerns as a reason for these restrictions, particularly when tensions rise with other countries.  As we discussed yesterday, unless some severe disruption occurs, a series of wildcard events that changes the underlying assumptions about development trajectories for example, the Chinese trajectory to digital currency dominance appears within reach.

See the NY Times (opens in a new tab) piece from Keith Bradsher.