Taipei [Taiwan], October 12 : Taiwan's technology and manufacturing sectors may soon experience major disruptions following China's latest move to tighten control over rare earth exports, warned Kristy Hsu, director of the Taiwan ASEAN Studies Centre at the Chung-Hua Institution for Economic Research, as reported by Focus Taiwan.
Hsu said that China's sweeping restrictions are not limited to the United States but are designed to exert pressure on any nation dependent on Chinese rare earth elements or technology.
According to the report, she cautioned that Taiwan could be hit hard as a large 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 rolled out new export licensing rules that require global companies to seek approval if their products contain more than 0.1 per cent of Chinese-origin rare earth materials by value. The regulation also targets industries related to semiconductors, artificial intelligence, and defence systems, which will now be subject to strict case-by-case evaluations.
Hsu compared Beijing's latest policy to the US "Foreign Direct Product Rule" (FDPR), which Washington uses to control the international use of American technology. She stated that China's version appears far broader in scope and global reach, representing a "strategic escalation" in its use of economic coercion.
Experts warned that if China enforces these regulations fully, the world could see a spike in rare earth prices and an increase in stockpiling by major economies seeking to avoid shortages. Hsu added that the overall fallout would likely be severe unless China later relaxes its approach, though the extent of enforcement remains uncertain, as cited by Focus Taiwan.
According to the US Geological Survey, China produced around 2,70,000 tons of rare earths in 2024, accounting for nearly 70 per cent of global output. Moreover, Beijing controls about 90 per cent of the world's refining capacity, a dominance that gives it overwhelming leverage over global supply chains and technological production, as reported by Focus Taiwan.
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