Author: Prof. Engr. Zamir Ahmed Awan, Founding Chair GSRRA, Sinologist, Diplomat, Editor, Analyst, Advisor, Consultant, Researcher at Global South Economic and Trade Cooperation Research Center, and Non-Resident Fellow of CCG. (E-mail: awanzamir@yahoo.com).

In recent years, the global economic landscape has witnessed a steady escalation of tensions driven by unilateralism, protectionism, and the weaponization of trade policies—chiefly emanating from Washington. The United States, under President Donald Trump’s administration, initiated a broad-ranging trade war by imposing extraordinarily high tariffs on imports from China and several other countries. What began as a claim to protect “American jobs” soon evolved into a policy of containment—designed to slow China’s technological and industrial rise.

Yet, amid this turbulent environment, China’s response has remained measured, rational, and deeply rooted in its civilizational wisdom. China has not reacted impulsively or emotionally. Instead, it has exercised restraint, patiently urging the United States to return to dialogue and adopt mutually beneficial cooperation. However, when U.S. measures consistently crossed the thresholds of fairness and respect for sovereignty, China was compelled—rightfully—to introduce countermeasures aimed at defending its national interests, technological security, and developmental rights.

On October 9, 2025, China’s Ministry of Commerce (MOFCOM) announced a new series of export control measures targeting rare earth elements, superhard materials, lithium battery technologies, and related processing technologies. These measures are not retaliatory acts in the narrow sense; rather, they are strategic, forward-looking steps intended to safeguard national security, optimize resource governance, and promote a more balanced global supply chain.

The Context: U.S. Tariffs and Economic Coercion

President Trump’s “America First” policy fundamentally disrupted decades of stable global trade. Since 2018, his administration imposed punitive tariffs on hundreds of billions of dollars’ worth of Chinese goods—covering everything from electronics to steel, solar panels, and consumer goods. At its peak, the average tariff rate on Chinese imports into the U.S. reached 21%, compared to 3% before 2018.

Simultaneously, the U.S. launched export bans and sanctions on Chinese technology firms, targeting giants such as Huawei, ZTE, Hikvision, and dozens of semiconductors and AI-related companies. Restrictions extended beyond trade—into financial services, investment reviews under CFIUS, and even academic collaborations. Washington justified these moves under vague notions of “national security,” but the underlying intent was unmistakable: to impede China’s progress toward high-tech self-sufficiency.

China, for years, responded with moderation. Despite facing aggressive tariff hikes and industrial sanctions, Beijing repeatedly emphasized dialogue, negotiation, and mutual respect. As an ancient civilization that has endured cycles of adversity and revival, China understands that impulsive reactions lead to instability. But restraint must never be mistaken for weakness.

China’s New Export Controls: A Responsible and Strategic Move

The October 2025 decisions—outlined in MOFCOM’s announcements (Nos. 57, 58, 61, and 62)—mark an important refinement of China’s export governance framework. These include:

Export Control on Rare Earth Items and Technologies: Covering mining, smelting, refining, and magnet-making processes for medium and heavy rare earth elements, including holmium, dysprosium, terbium, yttrium, and gadolinium.

Control on Dual-Use Technologies: Exports involving rare earth production line services and technology transfers will require dual-use export licenses.

Control on Superhard Materials and Synthetic Graphite: Including artificial diamond materials, lithium battery-related items, and synthetic graphite anodes—critical for the global electric vehicle (EV) industry.

Unreliable Entity List Update: Addition of 14 foreign entities (including firms such as Dedrone by Axon, BAE Systems Inc., Tech Insights, and Elbit Systems of America) for engaging in activities that undermine China’s national security and economic interests.

These steps are consistent with China’s Export Control Law of 2020 and international practices established under the Wassenaar Arrangement and UN frameworks. They neither target specific countries nor disrupt global trade arbitrarily. Instead, they ensure that technologies of strategic value are exported responsibly and with full regard to China’s national interests.

Rare Earths: A Critical Resource for the Future

China holds a commanding position in the global rare earth supply chain. It accounts for over 60% of global production, 85% of rare earth refining capacity, and 90% of advanced magnet production. These materials—though often overlooked—are indispensable in producing high-performance electric motors, smartphones, wind turbines, fighter jets, and precision-guided missiles.

Historically, China has been a responsible supplier, ensuring stability in the global market. However, the misuse of Chinese-origin materials and technologies to constrain or sanction Chinese companies contradicts the very principles of fair trade. When Western defense contractors and research firms use rare earth-derived technologies to develop systems that target China’s sovereignty or contribute to suppression of Chinese enterprises, it becomes necessary to enforce stricter governance.

The Global Times rightly observed that China’s move represents “an improvement in rare earth governance that safeguards the stability of global supply chains.” In fact, by tightening supervision, China is helping prevent illegal exports, resource smuggling, and overexploitation that could harm the environment and long-term industrial sustainability.

Environmental and Developmental Rationale

Rare earth mining is an environmentally sensitive process. Decades of overextraction—especially during the 1980s and 1990s—led to ecological degradation in several provinces, notably Inner Mongolia and Jiangxi. Since 2010, China has implemented strict environmental and production quotas to balance industrial demand with ecological recovery.

The new export controls reinforce this approach. By regulating both the quantity and quality of exports, China seeks to align resource utilization with its Green Development Goals under the 14th Five-Year Plan. This approach harmonizes industrial progress with environmental protection—demonstrating that China’s actions are rooted not merely in geopolitics but in sustainability and responsible governance.

Countering Unilateralism with Strategic Restraint

The decision to add 14 foreign entities to the Unreliable Entity List underscores China’s commitment to defending its companies from unjust treatment abroad. Entities such as Tech-Insights Inc. and its subsidiaries have, under the guise of “research,” provided foreign governments with data used to sanction or restrict Chinese firms. Similarly, defense technology firms like Elbit Systems, BAE Systems, and AeroVironment have participated in projects designed to contain China militarily.

China’s message is clear: cooperation is welcome, but interference is unacceptable. These measures are defensive, not aggressive. They are transparent, rule-based, and targeted only at entities that have violated the norms of fair competition and international law.

Balancing Global Supply Chains: No Winners in Trade Wars

Global supply chains are intricately interdependent. Rare earths extracted and refined in China are essential for industries in Japan, South Korea, Europe, and the United States. Similarly, China imports advanced machinery, precision equipment, and materials from its trading partners. Disrupting this ecosystem through unilateral tariffs or sanctions benefits no one.

A 2024 report by the OECD estimated that the U.S.–China trade war reduced global GDP growth by 0.3% annually, costing nearly $1 trillion in lost output over five years. American consumers paid higher prices for goods, while manufacturers faced input shortages. Meanwhile, China accelerated its self-reliance strategy, investing heavily in semiconductors, green technologies, and rare earth recycling.

This outcome illustrates a fundamental truth: coercion only strengthens the resolve of the targeted nation. China’s approach—of patience, dialogue, and strategic adjustment—has proven more effective than confrontation.

China’s Broader Vision: Shared Prosperity and Global Stability

China’s philosophy of governance and diplomacy emphasizes harmony, mutual benefit, and win-win cooperation. Even as it strengthens export controls, Beijing continues to champion globalization, technological openness, and multilateralism through initiatives like the Belt and Road Initiative (BRI), the Global Development Initiative (GDI), and the Global Security Initiative (GSI).

By refining its export control system, China contributes to a more rules-based and transparent trade environment. Unlike arbitrary U.S. sanctions, China’s measures are guided by law, implemented with clarity, and open to consultation through diplomatic channels.

In the long term, such policies will encourage other nations to adopt sovereign, fair, and responsible resource governance. Already, China is partnering with countries in Africa, Latin America, and Central Asia to develop joint rare earth projects under sustainable frameworks. These partnerships not only diversify supply but also promote equitable development—a key tenet of China’s global vision.

Rationality in an Irrational Era

The trade war unleashed by Washington was not simply an economic dispute—it was a reflection of fear, protectionism, and declining confidence in the post-Cold War order. China, in contrast, has demonstrated calm, rationality, and strategic foresight.

The new export control measures do not seek confrontation. They are an assertion of China’s legitimate right to safeguard its national interests, promote environmental sustainability, and ensure that its resources and technologies are not used against its own development.

In today’s interconnected world, stability arises not from dominance but from balance. China’s actions—anchored in prudence, legality, and responsibility—represent an effort to restore that balance. As the South China Morning Post noted, these controls mark a “major upgrade” to China’s resource governance, signaling not isolation but maturation.

If the United States and its allies choose dialogue over coercion, partnership over prejudice, and reason over rivalry, the global economy can yet rediscover its path toward shared prosperity. Until then, China will continue to act with patience and principle—guided by the enduring wisdom of a civilization that has weathered countless storms, always emerging stronger, wiser, and more united.

(ASIA PACIFIC DAILY)