ZGXT(SZ:000831) Sou Hu Cai Jing·2025-10-29 18:13Core Viewpoint - The recent U.S.-China rare earth dispute highlights strategic considerations beyond mere verbal exchanges, as rare earths are crucial for modern industry and the geopolitical landscape [1][5]. Group 1: U.S. Position and Actions - U.S. Treasury Secretary Besant claimed that China has not effectively implemented rare earth export controls, attributing this to U.S. threats of a 100% tariff, which was celebrated by some U.S. political figures as a significant victory for the Trump administration [3][8]. - The timing of Besant's statements, immediately following the U.S.-China trade talks, suggests a strategic maneuver to assert narrative control and leverage public opinion [3][11]. - The U.S. has been increasingly using tariffs as a tool against China, but the actual impact has been limited, indicating a disconnect between rhetoric and tangible outcomes [3][6]. Group 2: China's Response and Strategy - China's response to U.S. claims was deliberately ambiguous, reflecting a strategic choice to maintain control over the narrative and avoid being pressured into hasty declarations [5][15]. - China has established a comprehensive rare earth management system over the past decade, with clear regulations governing extraction and export, indicating a commitment to maintaining regulatory authority [6][9]. - The Chinese government emphasizes that its export control measures are in line with international norms and aimed at ensuring regional stability and fulfilling non-proliferation obligations [3][6]. Group 3: Industry Implications - Rare earths are essential for high-tech industries, with the U.S. military's dependence on Chinese rare earths exceeding 80%, particularly for advanced weaponry like the F-35 fighter jet [5][9]. - The U.S. is attempting to rebuild its domestic rare earth supply chain, but progress is slow due to high costs and technological challenges, with estimates suggesting it could take at least five years to achieve partial self-sufficiency [5][6]. - The ongoing rare earth dispute is prompting multinational companies to reassess supply chain risks, with some European and Asian firms increasing their reserves to mitigate potential disruptions [8][11]. Group 4: Global Context and Future Outlook - The rare earth conflict is part of a broader struggle for rule-making authority in global supply chains, with the U.S. forming alliances with the EU and Japan to reduce reliance on China [11][15]. - Despite efforts to diversify supply chains, the concentration of rare earth refining capacity in China presents a significant challenge for other nations [11][13]. - The market's reaction to the rare earth dispute has been mixed, with limited price volatility indicating that investors are becoming accustomed to the ongoing U.S.-China trade tensions [13][15].