Core Viewpoint - The Chinese government has implemented export controls on rare earth materials to maintain national security and international stability, emphasizing that these measures are not a ban on exports but a regulated process to ensure compliance with legal frameworks [1][2]. Group 1: Export Control Measures - The export control measures on rare earth materials are a legitimate action by the Chinese government to enhance its export control system amid global instability and military conflicts [1]. - China will conduct licensing reviews based on legal regulations, ensuring that compliant applications for civilian use will be approved, thus promoting legitimate trade [2]. Group 2: Response to U.S. Actions - The U.S. has announced a 100% tariff on Chinese rare earth exports and export controls on key software, which China views as a double standard and an abuse of export control measures [3]. - China has expressed strong opposition to the U.S. imposing high tariffs and has reiterated its unwillingness to engage in a trade war, while also stating it will take necessary measures to protect its legitimate rights [3][4]. Group 3: Bilateral Relations and Negotiations - Following the recent U.S. measures, China has attempted to engage in dialogue and negotiations but has faced a dismissive attitude from the U.S., which has led to the implementation of countermeasures by China [4]. - China aims to maintain a stable and healthy development of Sino-U.S. economic relations through mutual respect and dialogue, urging the U.S. to correct its course [3][4].

Core Points - The U.S. Department of Commerce announced a new regulation that extends restrictions to subsidiaries of companies listed on the "Entity List" if they hold 50% or more ownership, potentially affecting over 3,000 Chinese subsidiaries [1][3] - This "penetrating" rule aims to close loopholes that allowed companies to evade restrictions by restructuring ownership through subsidiaries [3][17] - The Entity List has evolved from a local marking system for export control to a global tool for imposing restrictions, particularly targeting Chinese companies in the semiconductor sector during the Biden administration [5][7] Group 1: Regulatory Changes - The new rule signifies a shift towards a more comprehensive approach to enforcement, ensuring that not only parent companies but also their subsidiaries are subject to the same restrictions [3][10] - The introduction of this rule complicates compliance for companies, as cross-border transactions involving sanctioned subsidiaries will require U.S. government authorization, increasing time and compliance costs [10][12] - The regulation reflects a broader strategy by the U.S. to maintain technological dominance amid concerns over China's advancements in sectors like semiconductors and artificial intelligence [14][22] Group 2: Industry Impact - The tightening of regulations is expected to lead to a loss of international clients for affected companies, as many customers may choose to terminate partnerships due to compliance uncertainties [12][22] - Chinese companies are responding to these pressures by accelerating their efforts to achieve self-sufficiency in semiconductor technology, with significant investments reported [16][19] - The new rules may inadvertently stimulate innovation within China as companies seek alternative paths to technological advancement in response to external pressures [21][22] Group 3: Future Outlook - The long-term effects of these regulations may lead to a reconfiguration of supply chains and a reevaluation of cooperation boundaries between U.S. and Chinese firms [22] - The evolving landscape suggests that while immediate compliance challenges may arise, the drive for technological self-reliance in China could lead to accelerated advancements in domestic capabilities [22]