Assassin's Mace Diplomacy at Work

How Beijing Turned Rare Earth Controls into Negotiating Power

China introduced additional rare earth export controls on October 9, 2025. However, in a significant turn of events, Beijing has now agreed to suspend the implementation of those rare earth export controls following a meeting between Xi Jinping and Donald Trump at the Asia-Pacific Economic Cooperation summit in Busan on October 30, 2025.

There are a total of seventeen rare earth elements (REEs), whose chemical compositions are quite similar, and that fall under the critical mineral umbrella. These minerals are used in everyday life, found in devices such as phones, laptops, medical technologies like CT and MRI scanners, electric vehicles, wind farms, and even defense and aerospace systems.

The two leaders announced a one-year trade truce that temporarily pauses a series of escalating measures, including China’s restrictions on rare earths and the United States’ latest semiconductor-related export bans, not including the most advanced chips. Both sides framed this move as a means of stabilising the bilateral relationship after months of back-and-forth tariffs and retaliatory controls.

These new rare earth restrictions were announced by the Ministry of Commerce of China, establishing a system that requires magnets and certain semiconductor-related products whose value includes more than 0.1% Chinese-sourced heavy rare earths to obtain a license. Five more critical minerals have been added to the list of controlled REEs, meaning China now has restrictions on a total of twelve REEs.

The equipment required for processing these REEs is also being regulated, as refining, milling, and separation technology will be limited. Moreover, a ban has been placed on any REEs intended for defence applications. These controls are scheduled to take effect in early November and December, with many believing that their timing might be a tactical move by Xi ahead of his meeting with Trump, and it appears to have paid off.

Irene Zhang, a reporter for the ChinaTalk Podcast and Newsletter, a program covering Chinese and US policy as well as technology, highlighted that the “Chinese state media is trying not to frame this policy as a retaliation towards American chip export controls. Now, whether they intended to is, of course, a different story, and the US certainly perceives it as that.”

She added that “none of them mention the US by name,” and “that they're trying to make it look, at least to a Chinese-speaking audience, that it's not a tit-for-tat response, but rather a form of global diplomacy.”

Two well-known Chinese newspapers did exactly that. Zhang noted that The People’s Daily praised these restrictions as a peaceful policy that prevents any military application of REEs, while Beijing News emphasised their ecological importance. This coordinated messaging reflects Beijing’s attempt to portray the controls as independent policy decisions rather than retaliatory measures.

Beyond the media’s careful framing, Xi Jinping’s earlier statements suggest the policy also serves a broader strategic move. Bill Bishop’s article on the recent rare earth controls recalls a speech made by Xi on April 10, 2020, during a meeting of the Central Financial and Economic Affairs Commission at the onset of the Covid-19 pandemic. Xi stated that “we must… consolidate and enhance the international leading positions of our advantageous industries, forge some game-changing ‘assassin’s mace’ technologies, continuously strengthen whole-of-chain advantages in areas such as… new energy…, improve industrial quality, tighten the international industrial chain’s dependence on China, and form a strong capacity to counter and deter deliberate supply cutoffs by external parties.”

In the same speech, however, Xi also emphasised the need to “resolutely oppose the politicisation and weaponisation of industrial and supply chains” and “through international cooperation… prevent and curb egregious actions that undermine global industrial and supply chains.”

At first glance, these two ideas appear contradictory: Xi simultaneously calls for strengthening China’s dominance in global supply chains while rejecting their politicisation. Yet this tension highlights China’s broader strategic narrative, promoting worldwide stability and open supply chains, but strictly on its own terms. The reference to an ‘assassin's mace', alludes to a subversive weapon, one that achieves its goal through deception and disruption rather than a straightforward attack.

The new trade détente underscores this duality. Beijing’s willingness to postpone export restrictions suggests an understanding that weaponising supply chains carries real economic costs, but the capacity to threaten such measures remains a powerful form of leverage. These tactical deals are less about resolution than about managing escalation. The one-year suspension effectively resets the clock on the next phase of the US-China trade rivalry, with rare earths once again positioned at the centre of a broader strategic balance.

“It has been part of a long-term strategy to gain political leverage…Today, the rare earth supply restrictions is a much more strategic ploy that is part of the wider trade tensions with the US and the West.” says Philip Andrews-Speed, a Senior Research Fellow at the Oxford Institute for Energy Studies’ within the China Energy Programme.

China largely controls the global supply chain of REEs. Its early dominance arose from scaling up production under low environmental and safety standards, including illegal mining, which led to a government clampdown on many mines in 2010 and 2011. These lax standards allowed for lower prices. According to the IEA, in 2024, China accounted for 60% of the world's rare earth extraction, primarily mined in Bayan Obo mine in Inner Mongolia.

However, where they truly dominate is in the mid-stream processing, accounting for 91% of separation and refining, an expensive step required to produce high-purity rare earth metals. They also lead the manufacturing of neodymium-iron-boron (NdFeB) magnets, the most powerful and popular rare-earth magnets, accounting for 92% of the global output in 2022. Rare earths are divided into two categories based on their atomic weight: light rare earth (LREs) and heavy rare earths (HRE), and China is the primary supplier of HREs, which are more difficult to extract than their LRE counterparts, making them more valuable.

According to Anders Hove, a colleague of Andrews-Speed and a Senior Research Fellow at the Oxford Institute for Energy Studies’ China Energy Programme, the cheap costs of REEs coming out of China is because “China is able to have the China price and maintain a vertically integrated supply chain… because everybody is in the same area sharing some of this know-how,...which is not intellectual property per se. It might be secret, but it is not intellectual property that could be protected.”

The ‘China price’ is not just about cheap labor or lack of environmental protections; it also stems from clustering, knowledge, and integrated production. These advantages enable China to control critical stages of the market, affording it economic leverage and the ability to utilize rare earth export restrictions as a strategic tool in international trade.

As Gavin Harper, a critical materials research fellow at the University of Birmingham, notes, “The economies of China and the West work in very different ways…in the West we have left the market to deliver solutions and ultimately it has failed. China…has [had a] more strategic… industrial policy to acquire all of the resources that are needed in the 21st century.”

China now dominates batteries, magnets, rare earths, heavy metals, and the construction of wind turbines and EVs. With the West divided, as the US has withdrawn from climate agreements and collaboration has stalled, geopolitical leverage is increasingly shaping the future of the green transition, rather than climate cooperation. This pause is significant; it represents a tactical intermission rather than a strategic resolution, an acknowledgment of mutual dependency that leaves the underlying rivalry intact.