ZGXT(SZ:000831) Sou Hu Cai Jing·2025-09-25 11:58Core Viewpoint - The article discusses China's response to the trade war initiated by the U.S. under President Trump, specifically through the implementation of rare earth export controls, highlighting the challenges faced by Western nations in attempting to reduce their reliance on Chinese rare earth resources [1][5]. Group 1: China's Dominance in Rare Earths - China holds a significant position in the global rare earth supply chain, with a mining volume of 69%, refining capacity of 90%, and complete monopoly on heavy rare earth processing [7]. - The average export price of Chinese rare earths has increased from $46.59 per kilogram in 2019 to $82 per kilogram by 2025, indicating a strong market position bolstered by technological barriers and environmental standards [9]. - China's management of rare earth elements includes strict regulations, requiring detailed documentation for each export, which complicates procurement for Western military enterprises [11]. Group 2: G7's Strategies and Challenges - The G7 has proposed setting a price floor for rare earths to force China to lower prices, but this strategy is seen as ineffective against market dynamics [9][12]. - Internal conflicts within the G7 regarding the imposition of tariffs on Chinese rare earths have emerged, with differing interests among member countries, such as Japan's reliance on Chinese rare earths for hybrid vehicle motors [16]. - The G7's consideration of carbon taxes on Chinese rare earths is criticized, as China's carbon emissions per unit of output have decreased significantly, while G7 countries struggle with higher emissions from their own operations [19][21]. Group 3: China's Strategic Response - In July 2025, China introduced the "Rare Earth Management Regulations," establishing a traceability system for rare earth products, countering G7's carbon tax proposals [23]. - China's rare earth exports increased by 21.4% year-on-year in July 2025, demonstrating robust international demand despite G7 pressures [24]. - China's comprehensive rare earth industry chain, from mining to high-performance magnet manufacturing, provides a competitive edge that is difficult for the G7 to disrupt [26]. Group 4: International Cooperation and Future Outlook - China has engaged in international cooperation, exemplified by a joint exploration agreement with Kazakhstan for a major uranium mine, showcasing its commitment to global resource development [28]. - The article emphasizes China's open yet principled approach to rare earth exports, which has garnered international recognition and support [28]. - The ongoing competition in the rare earth sector is framed as a test of endurance and intelligence, with China prepared for a long-term strategic engagement [30].